The 5e's Value of Money

392 Words2 Pages
Their aim is to be a performance led organisation that delivers excellent public services, good value for money (VFM) and effective community leadership. To achieve this, they need to be clear about their approach to VFM and improving services. VFM is about achievement of the 5Es, namely: 1. Economy - is concerned with the cost of accessing resources such as premises, supplies (inputs) of appropriate quantity and quality to achieve the required outputs. 2. Efficiency - concerns how well inputs are used to achieve outputs ie. What is the service produces. Classic efficiency indicators are cost per unit and output per person. 3. Effectiveness - is about whether the service achieves what it sets out to achieve (outputs and outcomes) and meets its objectives. 4. Equity and diversity - is about how effective the service is at achieving “equality objectives”. Service planning will have to consider the way in which services impact on all sections of the community (including minority groups) and set targets to redress disparities in the provision of services to those that are socially, economically or geographically disadvantaged. 5. Environment - is about giving effect to the principles of sustainable development. Sustainable development is often defined as “development that meets the needs of the present without compromising the ability of future generations to meet their own needs”. Achieving VFM is not simply about one-off reviews. It is a process of continuous service review and improvement. VFM is achieved when there is optimum balance between economy, efficiency and effectiveness. To achieve further value for money and service improvement they will: 1. Integrate value for money principles within existing management, planning, review and scrutiny processes. 2. Implement a comprehensive and combined Performance Management, Risk
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