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Value for Money (VFM)

Value for Money (VFM). Based on the Audit Commission Report Valuable Lessons –July 2009. National Perspective. Value for money requires economy and efficiency as well as effectiveness (the 3 e’s) FMSiS focus on processes rather than the real achievement of economy and efficiency

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Value for Money (VFM)

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  1. Value for Money (VFM) Based on the Audit Commission Report Valuable Lessons –July 2009

  2. National Perspective • Value for money requires economy and efficiency as well as effectiveness (the 3 e’s) • FMSiS focus on processes rather than the real achievement of economy and efficiency • Councils focus on processes and helping schools in financial difficulties • OFSTED’s VFM focused more on effectiveness rather than economy and efficiency

  3. 3 components for VFM

  4. What is VFM? • Best use of available resources, including getting better outcomes for the same spend, or freeing up resources that are being used inefficiently for other purposes

  5. The Audit Commission has: Provided separate guidance to: • Councils • Governors • School staff with financial responsibilities (these have been distributed by schools finance) • Summary report • Full report

  6. Audit Commission will: • Work with Ofsted to review/improve the criteria for assessing value for money • Update their Managing School Resources tool- helps school self-assess whether they are getting the best from their budgets • Provide a new tool to help schools cost workforce expenditure and compare this with performance

  7. Procurement • Schools spent £6.8 billion in 2007/08 on goods and services • Schools could save £400 million through better procurement alone • Running costs 22% of schools expenditure, quoted nationally • In the ERYC 2008-09 schools spent £44,424,436 = 22.73% of overall spend

  8. Entering into Contracts • Photocopier contracts (e.g) • Free copiers can be costly • ‘Ever green’ contracts Be very aware before signing any contract, read the small print, terms and conditions. Get Legal services to check it out. Could be very costly !! • Check termination terms. If you forget, the contract could run for another year

  9. Workforce • Workforce cost £24.2 billion • Comparing 1997 there are • 32,000 more teachers • 100,000 more teaching assistants • 70,000 more support staff While pupil numbers have fallen by 80,000 Nationally quoted 78% of overall spend by schools In 2008-09 ERYC 77.27% = £161,132,171

  10. Statement • The deployment of classroom staff is the most important financial decision in a school

  11. School Balances • £680 million in 1999/2000 • £1.76 billion in 2007/08 • £2 billion in 2008/09 Nearly 40% of schools have excessive balances • Could release £500 million nationally from excess balances

  12. Funding • Surpluses can grow due to uncertainty about future years funding • Right response to uncertainty is good financial management, rather than retaining resources • Funding is for the pupils in school now

  13. Funding Settlements • The likelihood is that funding growth will be lower than in recent years. • Schools need to be planning now for ways of coping with a much more austere future. • Greatest challenge to public sector managers – whilst raising standards

  14. Making Efficiency Gains Without adversely affecting children’s education:- • Use national benchmarking tool to identify high cost • Improve planning to include the cost of the workforce and link financial and performance information • Collaborate with other schools • Federation • Report produced for school staff • Managing school resources toolkit- help schools review and improve these processes

  15. Governors Role • FMSiS has improved Governors ability to challenge • Governors should not think that by challenging a headteachers authority is undermined – it is part of their role • Governors should be involved in decisions regarding VFM

  16. Councils should: • Challenge schools to produce well costed development plans • Provide VFM training • Align the finance and service improvement support • Encourage schools to use the national benchmarking website • Encourage collaboration working arrangements

  17. Question • If we spend this amount of money on this item / person, what is the desired outcome? • If you had an extra £10,000 in your budget, what would you spend it on?

  18. Practical ways – to start you off • Set printer to print double sided and black and white file, print, then click on ‘properties’ • Switch off computer screen when not in use

  19. Questions • How have you achieved / demonstrated VFM in your school? • What constraints do schools feel there are to achieving best value for money? • What can the Authority do to help? • What can schools do ?

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