Value for money is the breakfast of champions!

vfm

Value for money. That’s what.

The public sector and Council’s in particular are obsessed with “value for money”. Or rather obsessed with the phrase, and where they are on associated league tables that purport to answer the foolish question they ask themselves, “But are we Value For Money?”

It’s all Total Cock, and science will now show us why this is all Total Cock.

The Menu Test

You are in a fancy restaurant looking at a menu. You see the following items.

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You see the priciest item and think “Well, that’s a bit pricey, I’ll go for the seafood platter that looks good Value For Money at £20“.

But imagine the menu is arranged another way…

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Suddenly the price of £20 seems a bit steep, and the true value for money is at £7.  But hang on, what happens when there is all 3 items?

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Now £20 for the Seafood Platter looks entirely reasonable and certainly the best option.

This is not your fault. This is your brains fault. It has built in patterns of thinking, one of which is to find out the value of something by comparing it to like items around it. In the case of the fish, you compare what is there, with what is around it. You evaluate the £85 cost of the Oysters de la Fancy Dan against the other fish dishes, if they are cheaper, it seems expensive. You don’t compare the £85 against the cost of a nice new shirt, or a bottle of fine wine that is actually in the same restaurant, listed in the drinks menu on the table you seated at. Is £20 good value for a 10-15 minute bit of eating compared with £20 for a bottle of Jack Daniels whiskey that could last you months? If you weren’t me.

There isn’t an objective sense of value for money that these little tricks will influence you away from your true path. Your sense of value for money is MADE OF these tricks and influences, otherwise known as the context you are in.

So that’s you seated at a table with 3 similar items to choose from, with the prices next to them, being swayed to and fro unconsciously by things around you.

The Survey Test

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Now imagine you are asked by a Local Authority survey the degree to which you agree or disagree that the Council provides “good value for money“. This is a real question that Local Authorities ask residents. You can imagine what a seafood platter looks like, it will be a plate of seafood. You know it costs £20. Yet your judgement of whether it is “value for money” will be affected by what is next to it on a menu. How much does a Local Authority cost to run, and what does it do? You can’t possibly imagine. You may know roughly how much you individually pay in Council Tax per month, but this is only about a quarter of the cost of running a Local Authority. There is all the money given by grants, by central government, income from sales and services etc

If you don’t know this, you don’t know the cost, if you don’t know the cost, you don’t know one half of the stuff that value for money is comprised of, the money part.

It gets worse.

The Managers Test

About once a year I am involved in a frantic scramble within a Local Authority for it to come to a conclusion about the value for money of its services.  Tables are drawn up, comparator groups established, scores established. All bollocks. In conversations with managers I have never heard them say that any of it was ever of any use. That whenever they have compared their costs and the service they provide with other Local Authority services, they always find that they can’t compare as the costs are calculated differently or they offer different services or both. This is not comparing fish dishes on a menu with clear pricing. This is comparing measures that don’t measure a service, using budgets that don’t measure the cost of a service. Neither value, nor money, are objectively identifiable particularly when the workflow crosses services and budgets, for example through a customer service centre that handles multiple service contacts.

A judgement of “good” or “bad” value for money is not useful. You can’t use a conclusion, it is sealed and final. You can only use knowledge of what is happening and why and this come from questions, useful questions not judgements. Value for money is so subjective it is not useful as a measure.  It is an unanswerable question. If you truly understand continuous improvement the question “do we provide value for money?” can only ever be answered with “not enough, not yet“.

My conclusion

  • Context shapes judgements.
  • Value is not price, it is a feeling about price shaped by the context you are in.
  • Nobody knows the true price of Council services or the value of them.
  • Value for money judgements, conclusions, scores or ratings are not useful in any way under any circumstances, they are symptoms of a management model that is broken and they can’t help heal it.

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