Value for Money
Value for Money (VfM) is about maximising the impact of each taxpayers pound spent to improve the lives and livelihoods of the world’s poorest people. The purpose is to develop a better understanding of costs and results so that more informed, evidence-based choices can be made. This is a process of continuous improvement. To maximise the impact of UK aid, there is a need to be very clear about the results expected as well as the costs. We also must be confident in the strength of the evidence base and explicit in stating the underlying assumptions we are relying on to achieve those results.
DFID’s approach requires that we look at VfM in terms of ‘the 3Es’: economy, efficiency, and effectiveness:
- Economy: are project inputs of the appropriate quality being bought at the right price?
- Efficiency: how are inputs being converted into outputs?
- Effectiveness: are outputs achieving the desired outcome on poverty reduction? Cost-effectiveness must also be explored
Additionally, when we look at the effectiveness of an intervention, we need to consider issues of equity. This includes making sure our development results are targeted at the poorest and include sufficient targeting of women and girls (see gender guidance).
- Download A guide to value for money Understand the terms that relate to VfM in UK Aid Direct guidance and templates. Understand VfM and why it is a useful tool for project management and learn how to use VfM during project implementation.
- Link Webinar on value for money A UK Aid Direct webinar on Value for Money, covering why understanding VfM is important to measuring the impact of your project, how to use it as part of your reporting and what are the 4 E’s.
- Download Case study – from Women for Women International on Value for Money Women for Women International’s (WfWI) project ‘Improving livelihoods and rights awareness for socially-excluded Nigerian women through vocational training and men’s engagement’ ran for three years from January 2014 to December 2016. This case study looks at how they used Value for Money to help improve the overall impact of their project.