VFM: it’s about the value, not the money

Value for money image
Simon Perks: universities need hard data on their targets and achievements.
With higher education institutions in England being required to report annually on value for money, Simon Perks argues that universities need to raise their game when talking about what they do and how well they do it.

As funding gets tighter and competition for students becomes more intense, our higher education institutions are coming under increasing pressure to justify the public investment that they receive. So it is now more important than ever that we are able to explain clearly and effectively what we do and how we use the funding entrusted to us to create lasting value.

In the past, when institutions have talked about value for money, they have tended to focus on how they have cut costs, for example by re-tendering contracts, or secured marginal efficiency gains, such as through using automated processes. That is all good, but it cannot work forever. Even the worst-run institution will eventually reach the point where no further cuts can be made and no further efficiencies can be found.

It is also only part of the issue. You can be as lean and efficient as you like, but if you are not doing something worthwhile, you are still wasting money.

‘We need to show people what we achieve’

Which is why we need to think differently about value for money. We need to focus less on the money and more on the value that we create. We need to think less about inputs and processes and more about outputs and outcomes. We need to show people what we achieve, why it is important and how it benefits our students, our communities and society at large.

The best place to start, I would argue, is your institution’s strategic plan. What is it that you are trying to achieve? What makes you different from the rest of the sector? Whatever your goal, think about what you are doing to achieve it. Because it is these activities that should drive your value for money reporting.

A simple list of activities is clearly not going to cut the mustard, though. We need hard data on our targets and our achievements.

So if we are focusing on teaching, for example, we may wish to refer to our performance in respect of student retention and attainment, as well as in the National Student Survey (NSS), the Teaching Excellence Framework (TEF) or the Destination of Leavers in Higher Education (DLHE) survey.

Focus on how you create value

If it is research that we are interested in, then our performance in the Research Excellence Framework (REF) will be important, as will our track record in securing research funding and the publication record of our academics. Case studies of successful research projects could also add ‘colour’ to our reporting.

While reliable internally-generated data is important, the advantage of national datasets such as the NSS, REF and DLHE is that institutions can show how they perform in comparison with their peers. Critically, however, both internal and sector data allow institutions to demonstrate how they have improved their performance over time.

The key to success here is to focus unrelentingly on how your institution creates value. On how what you do matters. On how you help to make the world a better place.

And we need to be honest. Do not just pick and choose random things that you have done well. Take a holistic approach to your goals, your activities and your achievements. Own up to the challenges. And explain how you are working to address them.

Sure, it is much easier to simply put together a list of procurement savings and come up with some examples of how things have been done marginally more efficiently than before. But that’s not what value for money is about. Value for money is about how the institution sees itself and its place in academia and society. It is about why we do what we do, not just how.

Do you really want someone judging the value of your institution on the basis of how much you saved on your printing contract? I hope not.

Simon Perks is the founder and director of Sockmonkey Consulting and an advisor to organisations across the higher education sector. This blog post sets out his personal views and not necessarily those of any of the organisations with which he works.

Simon Perks
Founder and director of Sockmonkey Consulting