Value for Money Strategy
of the
Housing and Planning Directorate
2008-2011
Supporting the Council’s
Think Efficiency
Agenda
1
Foreword
We are pleased to introduce the Salford Housing and Planning Value for
Money Strategy, which sets out our vision, intentions, plans and actions for
the further development of a value for money culture across all our functions
and services over the next 3 years.
Achieving value for money for our customers has long been a central concern
of our organisation, through Salford City Council’s Think Efficiency agenda.
However in recent years it has become subject to a special focus.
Value for money is defined as a balance of economy, efficiency and
effectiveness. Essentially it is about the economic and efficient use of
resources to deliver better outcomes for customers.
In a period of sustained investment in public services, reflected locally in
Housing programmes like Housing Market Renewal, reviews such as Sir
Peter Gershon’s report on public sector efficiency in 2004 have sought to
maximize the impact of every pound spent so that the benefit could be felt
where it matters most: at the point of service delivery.
Since then there has been an ever increasing emphasis on value for money
that is reflected in the Housing Corporation’s regulatory approach and the
Audit Commission’s inspection framework.
Our next challenge is to build on the progress to date by ensuring that we fully
embrace all opportunities to deliver value for money. We need to demonstrate
to our funders and our customers that money invested in Salford’s Housing
and Planning Directorate is money well spent. Now, more than ever, it is
imperative that we continue to strive to provide VFM.
2
Strategic Context
Salford Housing and Planning services are driven by the aims of the wider
City Council to continue to develop Salford as a city of national significance
where people choose to live and in which companies want to invest; a City
where all citizens benefit from regeneration and have equal access to the
wealth, employment and other opportunities it brings.
Salford Housing and Planning Directorate aims to help create a future where
people see Salford as a great place to live and the Housing Strategy sets
out 5 key objectives which are:

People living independently in all our communities

Quality homes for all our residents

A greater choice of homes

Deliver excellent housing services

Working together to improve the housing offer
By taking a coordinated approach to value for money we will maximise
the impact of the resources we have to achieve our objectives.
A key feature of our approach to procurement in recent years has been to
continuously seek to work in partnership with others to deliver value for
money for the people of Salford. Responding to Sir John Egan’s report
Rethinking Construction, we have developed long term relationships with
construction partners. This has resulted in reduced tendering costs for major
capital projects, and improved quality of construction work benefiting Salford
residents. Productive partnerships have brought opportunities to secure
added value from contracts including employment opportunities for Salford
residents.
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We have embraced new methods of procurement such as jointly
commissioning services with the aim of achieving economies of scale and
of sharing costs with similar organisations.
Through our spend to save initiative focussing on preventative services, we
are reducing homelessness and therefore the personal cost to people who
experience it as well as the broader social and economic costs to the
community.
Customer consultation and satisfaction is used to inform all our decisions.
In many areas of our business, customer involvement is well advanced with
service users and other stakeholders fully involved in the procurement
process and enabled to make informed decisions throughout.
In the future our role as a commissioner and procurer of goods, works and
services will increase in importance. Procurement is a key lever for delivering
value for money. We will need to drive our value for money principles through
the supply chain into the core service aims of our partners and other
businesses and organisations that we contract with. This strategy is intended
to complement the housing and planning procurement strategy. The
relationship of both strategies within our overall strategic approach is
illustrated below.
This strategy should be read in conjunction with Salford’s Corporate
and Directorate Procurement Strategies
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Elected members
and senior
managers
Governance
Strategy
Customer
involvement
and feedback
VFM strategy
Procurement
Strategy
Strategy
Annual Directorate Service Improvement Plan
Service reviews
Improvement Action Plans
Delivery
Team Service Improvement Plans
Individual Work Plans
Adapted from: Embedding Value for Money in Housing Association Services, Chartered
Institute of Housing.
The responsibility for value for money lies with all employees and elected
members. It is not restricted to those with resource, financial, performance or
managerial responsibilities.
 The Lead Members for Housing and Planning and the Directorate
Management Team have the executive responsibility to put in place
arrangements that will ensure value for money.
 Employees have the responsibility embrace these arrangements taking
forward key VFM actions allocated to them and to work efficiently and
effectively, to minimise waste and to seek out opportunities to create
added value in their day to day work.
5
Introduction
VFM is not a discrete attribute or function that can be grafted on to an
organisation. Instead, it is an array of characteristics, behaviours and
processes that need to permeate the length and breadth of organisational
activity. In other words it has to become part of the day job for all of us.
In this strategy, our commitment to VFM is being made explicit by setting out
the value for money principles that we work to.
 We will promote shared understanding and commitment to value for money
among Members of the council, employees, partners, stakeholders and
customers.
 We will apply our approach to Value for Money fully and consistently
throughout Salford Housing and Planning Directorate as an integral part of
staffing, business planning, service development and delivery.
The aim is to achieve a more systematic application of these
principles, throughout all our services, leading to increased value
for money over a sustained period of time.
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Value for Money Fundamental Objectives
To achieve our Value for Money aims Salford Housing and Planning
Directorate will adopt and adhere to three fundamental objectives. We will use
these as a frame of reference for all our Value for Money activities. The
bespoke actions that we will take to deliver our value for money aims will
reflect these core objectives which set out how we will operate as a value for
money focused organization.
Fundamental Objective 1
Integrate VFM in everything we do
1. Mainstream VFM principles into current and future management, strategy,
business planning, performance monitoring and review processes.
2. Create VFM reporting structures through the performance management
system based on the Golden Thread with clear lines of responsibility and
accountability.
Evidence;

Evidence that VFM is considered in all projects, strategies and reviews.

Evidence that value for money considerations are consistently raised at
key meetings at all levels in the organization and with key partners.

External recognition of the organization delivering value for money
Fundamental Objective 2
Implement good practice
1. Learn from others in the sector and tailor the successful practices of other
organizations to fit the Salford Housing and Planning context, our priorities
and values.
2. Build and share a toolkit to evidence VFM.
3. Use performance information and learning provided by performance
management consistently to shape and improve services and VFM.
Evidence

Evidence that ideas are being put forward by staff as they engage with the
value for money agenda

Use of value for money targets and objectives as a tool for improving team
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and individual performance

Benchmarking services and using information to improve services.
Fundamental Objective 3
Understand and communicate VFM outcomes
1. Understand the relationship between service performance (including user
outcomes) and associated costs.
2. Evidence direct correlations between selected priorities and their
associated costs
3. Clearly communicate with customers, staff and stakeholders how VFM
activities including reviews have resulted in better outcomes for service
users and the community.
Evidence;

Evidence of increasing quality of services

Evidence of reduced costs without loss of service.

Build robust evidence base of how the achievement of VFM is sought in all
our activities.

Customers believe they are receiving good Value For Money.
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What is Value for Money?
Value for money is defined as the relationship between economy, efficiency
and effectiveness. It is a term used to assess whether or not an organisation
has obtained the maximum benefit from the goods it acquires and services it
provides, within the resources available to it. It not only measures the cost of
goods and services, but also takes account of the mix of quality, cost,
resource use, fitness for purpose, timeliness and convenience to judge
whether or not, together they constitute good value.
The factors influencing value for money are illustrated by the following
diagram:
Value for Money
Economy
Efficiency
Effectiveness
Qualitative
Costs (£)
Inputs
Outputs
Outcomes
Quantitative
Source: Value for Money in Housing – Supplementary Guidance, Audit Commission 2005
Economy is the price paid for what goes into providing a service, for
example, the cost per hour of employees; the price paid per printing cartridge.
Efficiency is a measure of productivity – how much you get out in relation to
what is put in. For example, the efficiency of services such as strategy
development may be measured by the cost of the service compared to the
number of strategies produced. Similarly, resident consultation costs may be
expressed as an annual sum per resident. Efficiency is primarily concerned
with how productively we use our resources.
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Effectiveness is a measure of the impact achieved and can be quantitative or
qualitative. For example, how many people were prevented by Home
Improvement Agency services from needing residential care (quantitative);
satisfaction levels among different sections of the community with consultation
arrangements (qualitative), and so on. Outcomes should be equitable across
communities, so effectiveness measures should include aspects of equity.
Effectiveness is primarily associated with the outcomes for customers.
Value for Money is high when there is an optimum balance between
these three – relatively low costs, high productivity and successful
outcomes.
This balance requires monitoring and maintenance throughout the whole life
of a service. Therefore, value for money has to be an integral part of our
culture with all staff continuously focused on finding ways to drive up
efficiency and effectiveness.
Value for money perspectives
Value for money is a concept which means different things from different
perspectives. We need to be conscious of what counts for service users and
communities, as distinct from what works for us as an organization against what
is expected from us by our partners and other stakeholders.
Internally
We need to embed the value for money culture. We need to focus on better
process and lower costs. We need to continually demonstrate the link between
our activities and what our customers want.
Customers
Our customers have diverse perspectives and needs. As the value for money
strategy is implemented, more work will need to be done to establish our
customers priorities and how they would like resources to be allocated.
Partners and Stakeholders
As we work towards shared objectives, we need to demonstrate to potential
partners that we are focused on value for money so that we are included in the
future initiatives that will deliver effective outcomes for our customers. We need to
effectively communicate our value for money principles and the progress we
make against our objectives to potential funders to convince them that their
investment will be maximized here in Salford.
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Annual Efficiency Statement and Methodology
Increased Value for Money from the Housing and Planning Directorate
contributes to the Council’s Think Efficiency agenda which is monitored and
measured within the City Council’s Annual Efficiency Statement.
An efficiency gain is an improvement in the productivity of resources used to
deliver services. A service cut is not an efficiency gain – the efficiency agenda
is not about cuts in budget, quality or services.
Efficiency gains can be cashable (i.e. can result in cash saving which can be
spent elsewhere) or non-cashable (i.e. no cash saving). And there are
different ways to measure them. These are sometime called the four
efficiencies or ‘the four Es’ and they are illustrated below:
Cashable Gains
Non-cashable Gains
E1
Reduced inputs for the same
outputs
“The same for less”
E3
Additional or improved outputs for
the same level of inputs.
“More for the same”
E1 Example:
The Supporting People Team
negotiates a reduced contract with a
service provider who continues to
support the same number of clients.
E2
Reduced inputs for the increased
outputs
“More for less”
E3 Example:
The Projects Team does a deal with a
developer to fit double glazing for the
same price as single.
E4
Getting more outputs or improved
quality in return for an increase in
resources that is proportionately
less than the increase in outputs
“Much more for a little more”
E2 Example:
E2 Example:
The Empty Property Team creates a
new incentive scheme which
encourages more landlords to bring
properties back into use – the result is
that more landlords are engaged and
fewer staff are required to enforce the
legislation.
The Community Housing Development
Team recruit one new officer who
works with all Older People’s services
and brings them all the new quality
standards for older people’s
accommodation.
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Value for Money Methodology
Achieving value for money and efficiency takes place within an iterative
process. The cycle of ongoing and continuous improvement is illustrated
below:
Stage 1
Understand where we are now in terms of costs and
performance. Viewed together through assessment,
evaluation, feedback and benchmarking
Inputs
 BVPI
 Local PI
 Throughputs
 Customer satisfaction measures
 Service Costs
 Staff numbers
Outputs
 Benchmarking – internal and external
 Cost-Benefit Analysis
Stage 2
Review the impact of what we do: cost, quantity, quality,
customer needs and outcomes
Inputs
 Benchmarking Results
 Customer feedback
 Market Test
Outputs
 Improvement Action Plan
Stage 3
Bring about a change in understanding and behaviour
across the organisation so VFM becomes an integral part of
how we do business
Inputs
Improvement Action Plan
Outputs
Report improved performance or reduced costs – e.g. AES
/ SIP / Annual Lead Member Report /
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Delivering the Action Plan
The Action Plan at Appendix 1 sets out the key priorities identified as part of
the value for money self assessment against the Audit Commission Key Line
of Enquiry on Value For Money (KLOE 32) that took place in 2007.
A Project Group will be formed;

to meet regularly and ensure that work takes place in a coordinated way

to create the framework to support wider improvements

to monitor the progress of the strategy

to adapt/delete/create action points within changing context

to produce annual reviews of strategy progress for Lead Member and the
wider Housing and Planning audience.

to update the strategy every 3 years.
Evidence of the impact of this strategy
We will use the Audit Commission Key Line of Enquiry on Value For Money
(KLOE 32) as a benchmark as we aim to achieve the standards of an
excellent organization. KLOE 32 is a document that is designed to provide
inspectors, inspected bodies and others with a framework through which to
view and assess value for money. The two main thematic questions within
KLOE 32 are:

How do the organisation’s costs compare to others, allowing for local
context, performance and policy choices?

How is value for money managed, including through partnership and
procurement and taking a long-term view?
Individual service areas will also use the VFM elements in their respective
KLOEs as part of their ongoing self-assessment.
This strategy should be read in conjunction with Audit Commission
Value for Money Key Line of Enquiry (KLOE 32) and related service
area KLOEs.
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Appendix 1
Summary Action Plan
The Action Plan is outlined against the 3 Fundamental Objectives;
Fundamental Objective 1
Integrate VFM in everything we do
Fundamental Objective 2
Implement good practice
Fundamental Objective 3
Understand and communicate VFM outcomes
Each action is identified against one of the following domains;
governance – the role of elected members, senior managers and managers
financial stewardship – setting budgets, understanding and controlling costs
performance management and procedures – ensuring the organisation attains its objectives
procurement – buying goods and services with the optimum price/quality mix
customer focus – ensuring services are shaped around customers and that customers are fully involved in service decisions
people – ensuring that managers and staff understand and are committed and empowered to deliver VFM .
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Action
Domain
Lead/Team
Date
Fundamental Objective 1
Integrate VFM into everything we do
1. Mainstream VFM principles into current and future management, strategy, business planning, performance
monitoring and review processes.
Establish VFM project group with senior level individuals from finance and performance to
Governance
coordinate the approach to securing VFM.
RP – Performance
07-08
Team / Finance Team /
TBC
Develop robust VFM cultural change champions, including a high level champion and
People
RP – Project Group
08-09
People
RP – Project Group
07-08
resource effectively.
Develop VFM initiatives e.g. For a period any good news relating to VFM/added value
gets double points.
Cascade the recognisable corporate brand of Think Efficiency for VFM based initiatives
On-going
People
emphasising that VFM is not about cutting costs.
RP – Project
07-08
Group/Business
On-going
Development Team
Celebrate achievements/keep records of achievements.
Clearly communicate the case for change/improvement and progress using emails from
People
People
senior managers or articles in HPB.
Staff suggestion scheme for VFM which is taken seriously and, if acted upon, rewarded.
People
Team Meetings / HMT /
07-08
SHMT / DMT
On-going
Team Meetings / HMT /
07-08
SHMT / DMT
On-going
RP – Project Group
08-09
On-going
Incorporate accessible information about VFM into all customer consultation and service
Customer Focus
All Managers / Teams
user involvement.
All new projects, strategies and reviews to set VFM parameters at initiation of
08-09
On-going
Performance
management and
All Managers / Teams
08-09
15
development.

Identify the resources

Identify how the outcome will be measured

Identify customer expectation of service quality vs. cost

Benchmark against previous service or market test against alternatives

Embed VFM targets into SIP monitoring
Set challenging SMART targets across all current service areas to improve VFM.
Undertake consistent, systematic analysis of costs and benefits to the customer in all
procedures
Performance
management and
procedures
Customer Focus
On-going
All / Performance Team
08-09
All Managers / Teams
08-09
VFM considerations. This should include actual evidence of what the customer values
On-going
locally. For instance, this may include details of where customers have agreed a higher
cost in return for higher quality or reduced costs for services that are less important to
them.
2. Create VFM reporting structures through the performance management system based on the Golden Thread
with clear lines of responsibility and accountability.
Senior managers to hold team leaders etc to account for VFM performance against
Team Meetings / HMT /
07-08
SHMT / DMT
On-going
Team Meetings / HMT /
07-08
SHMT / DMT
On-going
RP – Project Group /
08-09
programme.
Business Development
On-going

Team
objectives targets and action plans.
Managers to support staff to develop their understanding of VFM within the context of
Performance
management and
procedures
People
their roles.

Include VFM as a standard item on team meetings
Incorporate training on VFM and procurement into the workforce development
Develop simple guides for staff to

VFM

Benchmarking
People
16

Negotiating Contracts

Added value
Include knowledge or ability to develop knowledge of VFM on person specifications and
People
contribution to VFM to be included on job descriptions.
RP – Project Group /
09-10
Business Development
Team
When working with partners, terms of reference should always include specifically how
Procurement
All Managers / Teams
VFM will be achieved including outcomes for users/the community.
08-09
On-going
Fundamental Objective 2
Implement Good Practice
1. Learn from others in the sector and tailor the successful practices of other organizations to fit the Salford
Housing and Planning context, our priorities and values.
Identify good practice in the sector that the organisation can learn from and share it.
RP – Project Group /
07-08
TBC
On-going
RP – Project Group /
08-09
Internal and comparative data, i.e. activity based cost and performance data
Performance Team /
On-going
complemented by
Finance Team /
Develop capacity of managers to evaluate organisational VFM through provision of:

People

Qualitative information e.g. self-assessment, peer review and customer feedback.

Clarity on the unit costs for services

Timely and accurate cost data on which to make decisions
As well as benchmarking, all services, use informal collaboration with similar services to
understand the baseline VFM position, assess capacity to improve, set targets, measure
People
People
All Managers / Teams
08-09
On-going
progress, inform decision making around service design, and take improvement action.
2. Build and share a toolkit to evidence VFM
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Develop programme of internal reviews targeted on services that are high cost, are most
important to service users and customers, or perform poorly with the aim of improving
Performance
management and
procedures
VFM.
RP – Project Group /
07-08
Performance Team /
Annual
Finance Team
All Teams to undertake basic assessments of cost and quality to identify the baseline data
for further analysis.
Develop and utilise benchmarking to analyse VFM performance for all services.

Mainstream HQN benchmarking tool

Develop methodology for adjusting costs to take account of local factors that affect
Performance
management and
procedures
All Managers / Teams
08-09
Performance
management and
procedures
RP – Project Group /
08-09
TBC
On-going
Customer Focus
RP – Project Group / All
08-09
Annual
costs

Benchmark adjusted costs

Service areas to take opportunities to benchmark performance in their sector.
Develop / embed across all service areas a system for enabling customers to make
informed choices between costed service options within available resources. This should
Managers / Teams
involve deliberation and mature debate about what services are developed, to what
standard and include decisions about what will not get done as a result.

Across all service areas, enable customers to shape the specification where services
are being designed or procured externally.
Develop system for involving customers in monitoring performance including
Customer Focus
benchmarking data to assist in making VFM judgements.
RP – Project Group / All
09-10
Managers / Teams
3. Use performance information and learning provided by performance management consistently to shape
and improve services and VFM.
Establish mechanisms for gains to be re-directed to improve existing services or to
develop new ones in accordance with customer priorities.

Financial
Stewardship
RP – Project Group /
08-09
HMT / SHMT / DMT
On-going
Keep records of resources being shifted from non-priority areas to support national
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and organisational priorities.
Complete annual VFM self assessment, against KLOE 32 and build evidence base
throughout the year to prove the accuracy of self assessment.
Performance
management and
procedures
RP – Project Group
Annual
Fundamental Objective 3
Understand and Communicate VFM Outcomes
1. Understand the relationship between service performance (including user outcomes) and associated costs.
Improve links between VFM and the Annual Efficiency Statement so that efficiencies are
made visible.
Develop and establish a system to show that performance has improved over time
Financial
Stewardship
RP – Project Group
Governance
RP – Project Group /
08-09
HMT / SHMT / DMT
On-going
All
08-09
through the adoption of VFM management arrangements. This should include what the
08-09
On-going
outcome is in real terms for customers/communities.
Continually review how working in partnership delivers value for money and outcomes
Procurement
that meet the needs of users and/or the community.
On-going
2. Evidence direct correlations between selected priorities and their associated costs
All managers to develop and maintain robust evidence on costs and services and use to
Governance
All Managers
inform the SIP process/decide priorities and strategically manage resources.

08-09
On-going
Keep records of policy development leading to cost and resource allocations for all
service areas.
Consistently and systematically involve customers in setting out service priorities across
Customer Focus
All Managers / Teams
all service areas.
Establish audit trails of how inward investment (public funding and private sector) is being
maximised where this is not already being done through required monitoring and
08-09
On-going
Financial
Stewardship
RP – Project Group / All
08-09
Teams
On-going
evaluation.
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Benchmark amount of investment per capita with nearest statistical neighbours.
Financial
Stewardship
RP – Project Group
07-08
Annual
3. Clearly communicate with customers, staff and stakeholders how VFM activities including reviews have
resulted in better outcomes for service users and the community.
Where efficiency gains are re-invested resulting in improved services, communicate that
Customer Focus
All Teams HMT / SHMT
08-09
/ DMT
On-going
Performance
management and
procedures
All Managers / Teams
08-09
Procurement
All Managers / Teams
success.
Develop robust evidence of how the local context drives costs (demographics,
deprivation, geography, agreed service levels) Where customers /stakeholders have
On-going
specified higher service levels resulting in higher spend this should be linked to evidence
of improved performance/satisfaction
Keep records of how working in partnership has delivered VFM including outcomes for
customers / stakeholders /community.
Maximise the opportunities to involve customers / stakeholders in procurement decisions
07-08
On-going
Customer Focus
All Managers / Teams
and provide them with the information they need to make informed decisions about VFM.
08-09
On-going
Keep records of the results of involvement /outcomes achieved by it.
Fully involve customers / stakeholders in developing performance and success measures.
Customer Focus
All Managers / Teams
08-09
On-going
Develop procedure for inviting customers/ stakeholders to propose where re-invested
efficiency gains should go.
Customer Focus
RP – Project Group
09-10
On-going
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