What is Value for Money (VfM)?

Value for money is an important consideration to most of us whether we are aware of it or not. For example, when we do our weekly shopping we have a wide range of products to choose from offering different levels of quality and varying prices. We have to decide whether to buy economy products, which may cost less or perhaps a branded product, which may cost more but may have a better taste. This is the basic principal of value for money; it is the balance between COST and QUALITY.

At A1 Housing we always try to apply this basic principal to the things that we buy, this may be when we buy new boilers for our customers or when we acquire the services of outside companies. The process is very similar to when you do your shopping, except perhaps on a larger scale. 

The Key Elements of Value for Money

There are three key elements to consider when assessing value for money:

ECONOMY:            How much we pay for our goods and services;

EFFICIENCY:           How well we use the goods and services we buy;

EFFECTIVENESS:    Measures the outcome for our customers.

A Government study performed in 2004 by Sir Peter Gershon, said that all public sector organisations (this includes A1 Housing), had the ability to make significant savings while providing the same level of service by:

'Doing the same for less, or more for the same'.

The main point to remember is that any savings we make cannot be at the expense of the services we provide to our customers, so we cannot simply stop providing a service to meet our savings targets.

Types of Savings

There are two types of efficiency savings, cashable and non-cashable:

Cashable savings result in actual 'spare' money that we can use to fund other services or activities. The windows we now fit are an example of this sort of saving as they are cheaper and according to our tenant focus group, are better quality than before.

Non-cashable savings don't provide any extra money but they do help us to provide a better service to our customers. An example of this is our level of sickness. We have managed to reduce our average sickness from 17.5 days per employee to 8.5 days, which has enabled us to get more productivity from our employees resulting in improved services.

Remember, we cannot claim savings made at the expense of any of the services we provide so they will only ever help to improve our services.

How have we delivered and continue to deliver, Value for Money?

Key actions:

• We have developed a Value for Money culture, all employees have been made aware of the importance of spending money as if it were their own.
• We have monitored and regularly publicised our efficiency savings.
• We compare ourselves to similar organisations to make sure that we are competitive.
• We have recognised that quality is important not just the lowest price.
• We have taken advantage of the benefits offered by long-term arrangements, such as our partnership deals with Connaught, Bullocks and Lindums.
• We regularly use buying organisations to increase our buying power and access cheaper prices.

Examples of efficiency savings made to date

			Window Factory. We market tested our internal Window Factory and identified that it was not offering the best combination of cost and quality. By moving to an external supplier we were able to obtain better quality windows at nearly half the previous cost!

			Gas Servicing. We market tested our gas servicing contract. We found that we could get an improved service at a cheaper price by using an external contractor.

			Voids. We re-tendered the voids contract resulting in a cashable saving during 2007/ 08.

			Repairs Service. We market tested the service and identified that our own in-house service was very competitive. We also amended our repairs policy in 2006/ 07 which provided more savings.

			Service Level Agreements (SLA). Bassetlaw District Council provides some of our support services. In 2007/08 we successfully negotiated savings for these services.

			Reduced Sickness. Increased training and awareness has helped us to reduce the average days lost to sickness (from 17.5 days per employee in 2005/06 to 8.5 days in 2007/08), resulting in increased productivity.

Below is an illustration of how we have performed in our efficiency savings over the last three years:

Our future plans to continue our efficiency savings during 2008/09.

				We will review our stores provision to ensure that the things we buy are the best quality at the best price available.
				We will review the grounds maintenance and building cleaning contracts again to make sure that the service we pay for is the best available at the right price.

			We have a programme in place to review all other services and contracts to improve Value for Money across the organisation.

How do we involve our customers?

We try to keep our customers informed of the process of identifying efficiency savings including our performance year to year. We also encourage your suggestions no matter how small you may feel they are, as every penny saved adds to a better service.

Sources of information include:

•  Consultation days with our tenants;

•  Roadshows;

• Newsletters;

• Tenant Committees.

How can you help?

We always welcome your feedback and suggestions for any Value for Money savings you feel A1 can make. We also invite you to comment on any of our strategy documents.

Please forward any suggestions or comments to:

A1 Housing Bassetlaw Ltd

Corporate Services,

Carlton Forest House,

Hundred Acre Lane,

Carlton In Lindrick,

Worksop,

Notts.

S81 0TS.

Or e-mail your suggestion to: valueformoney@a1housing.co.uk