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Value for Money: Easier or Harder than it looks? Andrew Rowell, CARE Australia DevPol Conference Feb 2014

Value for Money: Easier or Harder than it looks? Andrew Rowell, CARE Australia DevPol Conference Feb 2014. VFM – not exactly a new idea…. Donor context – results and VFM. UK and then Australia - expanding aid budgets, amid broader fiscal restraint

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Value for Money: Easier or Harder than it looks? Andrew Rowell, CARE Australia DevPol Conference Feb 2014

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  1. Value for Money: Easier or Harder than it looks? Andrew Rowell, CARE Australia DevPol ConferenceFeb 2014

  2. VFM – not exactly a new idea…

  3. Donor context – results and VFM • UK and then Australia - expanding aid budgets, amid broader fiscal restraint  greater emphasis on cost-benefit type approaches to justify aid investments • Australian policy expressed as “VFM and results” or “VFM and effectiveness” – BUT the second half can get a bit lost...

  4. Policy vs achievements? • “A ‘value for money’ perspective – one that balances effectiveness, efficiency and economy in decision-making – will drive improvements across the aid program. This focuses on results and returns for poor people, rather than just input costs.” (Effective Aid 2012, emphasis added) • But, claimed achievements in securing VFM? • Advisor Review – fewer expensive advisors • Remuneration review – cheaper advisors • Lack of consistent understanding across programs of what is being sought...

  5. So, VFM is clearly a Very Important Thing, but beware… • Overemphasis on inputs, not results? • Inefficient both for aid staff and NGO staff? • Doesn’t take account of issues of timeframe, pilots, scaling up to achieve impact? • Simplistic measures risk distorting focus: “Those development projects that are most precisely and easily measured are the least transformational, and those projects that are the most transformational are the least measurable” – ex USAID Head, Natsios 2010

  6. Meanwhile, in the UK… • Independent Commission for Aid Impact says: “...effectiveness and value for money are inextricably linked: how can a programme be value for money if it is not effective; and if there is poor value for money, is the programme being as effective as it could be?” • … and assesses “VFM and effectiveness” based on four criteria around Objectives, Delivery, Impact and Learning

  7. Some good VFM practice in Australian aid • Australia Africa Community Engagement Scheme (AACES) – large, well-resourced program involving 10 NGOs, developing its own VFM framework and encouraging piloting of different approaches • Engaging with ACFID research on VFM • Principles-based approach emerging through development of possible Effectiveness Assessment Methodology – thinking about strategy, results, cost and value consciousness

  8. Australian NGOs – confident in our fundamentals around VFM! After all: • We’re non-profit! • We make dollars stretch! • We use volunteers! • We don’t fly business class! BUT: How can we actually demonstrate that we provide good VFM??

  9. Some thoughts from CARE Australia: • Regional impact reports to get better handle on results • Examining existing processes to see where we already address aspects of VFM, and where we can strengthen • Using mechanisms to consider value placed on our interventions by beneficiaries and participants • Trial of modified Social Return on Investment (SROI) approach – indicated significant positive returns

  10. (But beware of trying to quantify everything?)

  11. And learning from others: • VFM evaluation of CARE UK’s partnership program with DFID, based on analysis around results from innovation/ scale-up, levels of resourcing, risk mitigation mechanisms (not just input costs) • Sharing information and approaches with other NGOs and DFAT engaged in AACES • Ten peer agencies (ANCP partners) planning a learning event on VFM in mid 2014

  12. Emerging principles around VFM (and results)? • Integrate closely with M&E processes – don’t overlay as a new, separate layer • VFM is multifaceted, not a simple equation • Incorporate value placed on interventions by beneficiaries and participants (not only the donor or agency view)

  13. Emerging principles around VFM? • Our approach to addressing VFM should itself be efficient and cost-effective, and deliver useful, “good enough” info without being unduly resource intensive: “On balance, VfM adds little to good practice program evaluation when it takes a ‘results-based’ approach, and a full economic analysis approach is expensive to carry out and difficult to justify given that evidence for economic benefit of WASH outcomes already exists.” (AusAID WASH Fund Evaluation 2012)

  14. AND NOW, ONTO BENCHMARKING THE AID PROGRAM? WATCH THIS SPACE…

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