VFM Toolkit

For more information and enquiries please contact mehdi.shiva@bsg.ox.ac.uk or golab@bsg.ox.ac.uk Beta Version - July 2021

This VFM toolkit provides public managers with a summary of the economic validity of a project at the planning stage. The toolkit introduces a step-by-step and structured framework for
assessing the Value for Money using the 4Es criteria: Economy, Efficiency, Effectiveness and Equity. This toolkit, at the current version, is intended for learning and self-assessment and should
not be taken as the sole source for decision making.

Worksheet Description
Intro This worksheet gives an introduction and overview of the VfM process
Start here to fill out the basic details and make a check of the data you have on hand. This sheet presents an overview of the various data points in the
Data checklist VfM analysis, which you should attempt to gather in order to complete the assessment.
Quantitative Calculator A tool to assist with a high-level quantitative assessment of your inputs, outputs, outcomes, and equity metrics.
Qualitative Assessment A self-assessment instrument to assure the quality of project. This will output an aggregated set of qualitative metrics.
SIB specific estimates Further analytical tools to assist with evaluating Social Impact Bonds.
Summary This printable worksheet gives a summary of your VfM metrics, along with an optional benchmark summary.

For citation, please use: GO Lab (2021). GO Lab-CIPFA Value for Money toolkit [beta]. Government Outcomes Lab, University of Oxford, Blavatnik School of Government.
 Description Examples Tips
Z. MISC
Z1 Project objectives Lay out the main objectives your project will try to Let's use a possible example project aiming to
attain. improve mental health amongst the
vulnerable, through counseling and psychiatric
referrals.
Z2 Time discount factor Time-varying projects may require the use of time How much do you value costs or benefits
discounting, if you are using past data or future realized this year versus next year versus in five
projections. It is important to determine the years?
structure of your discounting over time. The standard discount rate is 3.5 per cent per
annum in real terms. This means that a gain Use Bank of England's inflation calculator.
worth £1 today is worth £.965 next year.

Z2 Programme timeline You will need to know the rough project timeline for List the start date, commissioning deadline,
these projections. Define the project timeline, reporting periods, etc.
general deadlines, and any contingencies associated
Z3 Total target users with this.
How many total users could benefit from this In our example, perhaps 1,000 people in the
programme? local area suffer from poor mental health and
qualify for the programme.

Z4 Expected referred users Estimate the number of target users likely to be Our example programme may be able to get
referred. 800 referrals.

Z5 Expected engaged users Using priors, estimate the amount of referrals which Perhaps 300 out of 800 referrals decide to
turn into real programme engagement. engage with the scheme.

Z6 Commissioning method Determine the structure of this programme's Social impact bond, payment-by-results, fee-
payments. for-service, etc. The ideal choice may vary
depending on provider options, data
availability, etc.
Z7 Comparator project If possible, find a comparable project to use as a A comparable programme could be one with a
benchmark, and gather data to compare with your similar mandate in a different locale, or a
proposed project. previous project from your local area. Try to come up with at
least one comparator
project to use as a
benchmark. If you can,
collect the below data for
each field. Use historic
data or refer to unit cost
databases.

A. ECONOMY
A1 Key cost drivers Compile a list of all likely cost drivers for this Different cost drivers include staff,
programme, as well as a basic procurement plan for procurement, management and evaluation,
all necessary resources. outcome payment, etc.
See Table 2.2. of the 'pricing outcomes' on G

A2 Per-unit basis of your key cost Define what a "unit" is for each cost, and predict the Staff unit might be annual salary for the
drivers amount of units your project will use. average team member. Outcome payment
might be per-outcome.

A3 Total cost for each cost driver Set out your budget for each cost driver. How much do you plan to spend total on
salaries, overhead, procurement, etc?
See GMA unit cost database or CIPFA's VfM Toolkit f

A4 Monitoring and budget Formulate a plan to collect cost-related data, Think about how you will collect data, the time
assessment plan monitor inputs, and alter the budget if necessary. frame for making budgetary changes, etc.

B. EFFICIENCY
B1 Key outputs Compile a list of all likely outputs for this programme. A mental health programme might measure
the total hours of counseling given as one
output.
B2 Per-unit basis of your key Define what a "unit" is for each output. In the above example, one hour of counseling
outputs might be a unit.

B3 Per-unit valuation per output It is expected that you pay for a number of outputs Perhaps the local authority defines an hour of
apart from the final outcomes. How much do you counseling provided as worth £5. Another
value a unit of each output? Define this clearly. possible output for this scheme, one person
enrolled, is valued at £14 per month.

B4 Chances of successful output per This is the predicted or expected rate of success in For instance, if a previous programme acheived
engaged user terms of output per engaged user. the desired outputs for 5 participants out of
10, the success rate is (5÷10)×100 = 50%

B5 Output monitoring and payment Formulate a plan to monitor project outputs, and If the local authority defines an hour of
plan define how you will pay for them. counseling as worth £5, they might require a
provider to submit monthly totals of counseling
provided, and pay on that basis. They may also
have random auditing to ensure correct
reporting.

C. EFFECTIVENESS
C1 Key outcomes Compile a list of all likely outcomes for this A mental health programme might track
programme. improvements in subjective well-being scores
as outcomes.

C2 Per-unit basis of your key Define what a "unit" is for each outcome. In the above example, on a 10-point well-being
outcomes scale, an outcome unit might be a 1-point
improvement over the pre-treatment level,
sustained for one month.

C3 Per-unit valuation per outcome It is expected that you pay for outomes. How much Perhaps the local authority defines a 1-point
do you value each outcome? Define this clearly. improvement as worth £8.
C4 Output-to-outcome conversion In OBCs, it is expeced that outcomes are the focus In our example, perhaps 10 hours of counseling
rate and outputs play an intermediary role. For each would on average lead to a 1 point
pairing of outputs and outcomes, estimate the extent improvement. This is a 10% conversion rate for
to which they are related. this pairing. Meanwhile, our other output of
one person enrolled might be different:
perhaps 50% of people see a 1-point
improvement on average. This would be a 50%
conversation rate for that pairing.

C5 Consider possible spillovers and Your programme may produce both positive and Reducing mental health problems may result in
second-order outcomes negative effects outside of the planned outputs and fewer incidences of domestic violence, and
outcomes. Spend some time considering what these may impact family separation rates in the area.
might be.

use GO Lab's Impact Wayfinder to find guidance on

D. EQUITY
D1 Equity components for the Define the most important equity components you These include characteristics that make
programme want to track. participants on the programme vulnerable such
as living in rural area, HIV status, disability
status, income level, gender

D2 Programme level equity We will come up with an aggregate indicator of
weighting equity to track and report. This will be a weighted
average of your equity components compared to
your equity goals. Its composition depends on your
preferences as an organisation.
Consider the proportion of your equity
concerns which fall under various categories:
targeting the vulnerable, disability status,
gender, etc.
 D.i EQUITY
How well do the activities reach all people that they are intended to?

Indicator
percentage
Outcome Criterion weighting Indicator Weighting Indicator projected value Indicator goal achieved Weighted equity metric
Assign a weight to each
indicator in the category
(should subtotal to 100%,
adjust weights if not)
For an overall metric, assign a Set the goal you
weight to each criterion category. Put the projected project would ideally hit
D.i.1 Equity Criterion 1: Vulnerable targeting These should sum to 1 data point in this column. for this indicator.
D.i.1.1 0% 0%
D.i.1.2 0% 0%
D.i.1.3 0% 0%
D.i.1.4 0% 0%
D.i.1.5 0% 0%
0% 0%
D.i.2 Equity Criterion 2: Minority outreach
D.i.2.1 0% 0%
D.i.2.2 0% 0%
D.i.2.3 0% 0%
D.i.2.4 0% 0%
D.i.2.5 0% 0%
0% 0%
D.i.3 Equity Criterion 3: Disabled and other outreach
D.i.3.1 0% 0%
D.i.3.2 0% 0%
D.i.3.3 0% 0%
D.i.3.4 0% 0%
D.i.3.5 0% 0%
0% 0%
Total equity metric 0% 0.00%
 C.i EFFECTIVENESS:
How well do those outputs achieve outcomes?

Most relevant
output or Units of outcome Predicted output:outcome
Outcome Unit of analysis Project year Per-unit valuation outcome per output conversion rate Predicted Outcome Units Per-unit valuation Total value
C.i.1 Outcome 1 (undiscounted) (if successful) (discounted, calculated)
C.i.1.1 0.00 £ - £ -
C.i.1.2 0.00 £ - £ -
C.i.1.3 0.00 £ - £ -
C.i.1.4 0.00 £ - £ -
C.i.1.5 0.00 £ - £ -
Outcome 1- sub-total £ - £ -
C.i.2 Outcome 2
C.i.2.1 0.00 £ - £ -
C.i.2.2 0.00 £ - £ -
C.i.2.3 0.00 £ - £ -
C.i.2.4 0.00 £ - £ -
C.i.2.5 0.00 £ - £ -
Outcome 2- sub-total £ - £ -
C.i.3 Outcome 3
C.i.3.1 0.00 £ - £ -
C.i.3.2 0.00 £ - £ -
C.i.3.3 0.00 £ - £ -
C.i.3.4 0.00 £ - £ -
C.i.3.5 0.00 £ - £ -
Outcome 3- sub-total £ - £ -
Total outcome value 0.00 £ -
 B.i EFFICIENCY:
How well are inputs converted into outputs?

Units output per Predicted rate of output Per-unit valuation

Output Unit of analysis Project year Predicted engaged users Per-unit valuation user, if successful delivery Predicted Output Units (discounted) Total value
B.i.1 Output 1 (undiscounted) (if successful) (discounted)
B.i.1.1 0 £ - £ -
B.i.1.2 0 £ - £ -
B.i.1.3 0 £ - £ -
B.i.1.4 0 £ - £ -
B.i.1.5 0 £ - £ -
Output 1- sub-total £ - £ -
B.i.2 Output 2
B.i.2.1 0 £ - £ -
B.i.2.2 0 £ - £ -
B.i.2.3 0 £ - £ -
B.i.2.4 0 £ - £ -
B.i.2.5 0 £ - £ -
Output 2- sub-total £ - £ -
B.i.3 Output 3
B.i.3.1 0 £ - £ -
B.i.3.2 0 £ - £ -
B.i.3.3 0 £ - £ -
B.i.3.4 0 £ - £ -
B.i.3.5 0 £ - £ -
Output 3- sub-total £ - £ -
Total output value 0% 0 £ - £ -
 A.i ECONOMY:
Are inputs of appropriate quality bought at a minimised price?
Average unit costs
(discounted to
year 1)
Cost Drivers Unit of analysis Number of Units Project year Average unit costs Total costs
A.i.1 Cost Driver 1: Ordinary costs (replace with cost driver,
e.g.for
individuals,
example outcomes Predict
management, evaluation, the amount other
procurement, of units
Which yearcosts,
transaction of theoutcome
project i(payment,
not discounted)
return to(discounted)
the investor...)
A.i.1.1 £ - £ -
A.i.1.2 £ - £ -
A.i.1.3 £ - £ -
A.i.1.4 £ - £ -
A.i.1.5 £ - £ -
Cost Driver 1 - sub-total £ -
A.i.2 Cost Driver 2: Output Payments
A.i.2.1 0 0 £ - £ -
A.i.2.2 0 0 £ - £ -
A.i.2.3 0 0 £ - £ -
A.i.2.4 0 0 £ - £ -
A.i.2.5 0 0 £ - £ -
Cost Driver 2 - sub-total £ -
A.i.3 Cost Driver 3: Outcome Payments
A.i.3.1 0 0 £ - £ -
A.i.3.2 0 0 £ - £ -
A.i.3.3 0 0 £ - £ -
A.i.3.4 0 0 £ - £ -
A.i.3.5 0 0 £ - £ -
Cost Driver 3 - sub-total £ -
Total cost £ -
 A.ii ECONOMY:
Are inputs of appropriate quality bought at a minimised price?
Assessed sub-criteria Description Source reference

A.ii.1 Is resource allocation linked to previous Assess whether the programme’s budget is justified using data from similar
performance data in a similar context? programmes.

Are the costs of data

A.ii.2 collection/analysis/validation appropriate (and Data collection should not be too costly. For programmes where these costs are
in proportion) to the intervention and the unavoidably higher, they must be clearly justified.
ultimate benefits of the data?

A.ii.3 Is budget planned to be monitored regularly? Check if the budget will be monitored on at least a monthly basis. Proper budget
monitoring helps to minimise costs.

A good sourcing strategy ensures the proper identification, assessment and engagement
of suppliers for the planned activities. Sourcing strategy could be input based (grants
A.ii.4 Is the sourcing strategy justified? and in-house), activity based (fee-for services), output-based (pay for result), or
outcome-based (OBC or SIB). Consider how competitive the supplier market is and if
better prices can be leveraged. Our Sourcing Guide (Link to Sourcing Guide) outlines this
process.

A.ii.5 Are procurement guidelines for selecting A robust and competitive procurement process ensures significant cost reductions and
providers followed? management, and that risks to outputs/outcomes identified, assessed and minimised.

Have you identified a robust counterfactual to

A.ii.5 compare against yours'? Performance should be evaluated against a robust counterfactual in the form of a control group. This would strengthen an organisation’s e

Are service providers only paid for results Assess if data management systems and processes are able to capture accurate, reliable
A.ii.5 achieved? and timely information on outcomes achieved, and the number of participants attached
to the programme, to ensure providers are only paid for results achieved.

The success of an outcome-based payment scheme depends on the environment in

Are the reasons for using an outcome-based
A.ii.5 payment scheme over alternatives justified?
which the programme is operating. For instance, an outcome-based payment scheme is
most likely to succeed if outcomes can be measured and attributed to the interventions.
The economy condition of VfM may be undermined if an outcome-based payment
scheme is applied inappropriately given that there will be additional costs to monitor
the risks associated with the quality of the programme.
 Assess whether adding an investor to the model improves performance and how long it
will take to generate outcome payments. The feasibility of a SIB depends on two
A.ii.6 Are the reasons for using social impact bond conditions: delivering cashable resource savings and financing innovation. These two
(SIB) justified? conditions may be satisfied if better outcomes can be achieved at lower costs through a
new set of services funded by a SIB compared with alternative forms of commissioning.

A.ii.7
A.ii.8
A.ii.9
Average score
Overall summary: Economy

B.ii EFFICIENCY:
How well are inputs converted into outputs?
Assessed Standard Description Source reference

Are assumptions (from the activities to the Examine if sufficient activities (quality and quantity) are planned to produce the output
B.ii.1 output) consistent with the programme's and whether targets for the output are appropriate. Assess if indicators are described
theory of change? accurately and are inexpensive, reproducible and usable as a means for monitoring.

B.ii.2 Do we have clear and realistic milestones, Assess the likelihood of the programme delivery in a timely manner, in line with output
timelines and targets built on a baseline? indicators and their expected targets while responding to contextual changes.

Have different alternatives for delivering the Examine whether the programme’s objective and expected outputs justify the cost to be
B.ii.3 programme and respective benefits and costs invested compared to similar programmes. Alternatives could provide the means to
been considered? achieve the same for less cost. Moreover, performance might be greater for the same
cost.

Are there systems in place for systematically Consider if systems are in place to systematically monitor progress against set outputs
B.ii.4 monitoring, evaluating, and managing the and targets as well as the progress and quality of activities to be implemented.
programme?

Are there monitoring tools and planning in
B.ii.5 place to mitigate risks and make timely
adjustments?
Examine if the risk analysis and mitigation strategy cover the key threats and overall risk
level of the programme as well as any perverse incentives (e.g. to carry on with the
cheaper/quicker approach rather than the most suitable). For instance, if outcomes
seem harder to achieve, either because the cohort is difficult to help or because the
desired level of improvement is high, then the probability of achieving outcomes will be
lower, and the contract will be deemed riskier – and risk demands compensation.

B.ii.6 What economies of scale have you been able to Check if the cost per participant reduces if you were to increase the scale of the project.
identify in the delivery of your programme? If so, provide justifications for why a larger programme is not targeted.
B.ii.7
B.ii.8
B.ii.9
Average score
Overall summary: Efficiency

C.ii EFFECTIVENESS:
How well do those outputs achieve outcomes?
Assessed Standard Description Source reference

Checking this allows you to assess whether the programme’s objectives can be achieved
Are the programme’s objectives realistic and as the effect of the programme. Examine whether the main assumptions from the
C.ii.1 clearly defined? output to the programme’s objective are accurately perceived. Consider if the output
planned is sufficient to achieve the project objectives as well as the factors that impede
the achievement of the project objective.

C.ii.2 Is there a clear theory of change based on The theory of change should show that outputs are necessary and sufficient to deliver the desired outcomes. Identify the elements of the
evidence?

C.ii.3 Are the outcome and impact indicators Relevant indicators are clear, rule-driven, causally linked and accurately expresses the
relevant and robust? programme’s objective.
 Does the programme have leverage, replication Assess the leverage of other activities and the wider financial and non-financial benefits
C.ii.4 potential and offer wider benefits? of the programme. Is there any evidence that shows significant potential for expansion
or replication?

Is there a plan in place to measure ‘additionality’ and check ‘attribution’? Changes could
C.ii.5 Can you demonstrate the additionality of the happen over time due to external factors. Understand what would happen without the
progamme’s activities? programme and whether there are externalities that will accrue to participants as a
result of the planned activities.

Will the programme be sustainable over the Consider the factors (e.g. behavioural change approach, feasibility study, exit strategy)
C.ii.6 long-term? that ensures a better chance of outputs turning into outcomes.

Will the programme generate important Examine if the programme contributes to a knowledge gap and how important lessons
C.ii.7 learning? will be shared to stakeholders.

C.ii.8
C.ii.9
C.ii.10
Average score
Overall summary: Effectiveness

D.ii EQUITY
How well do the activities reach all people that they are intended to?
Assessed Standard Description Source reference

D.ii.1 Does the commissioning method impact equity Consider any perverse incentives that occur in an OBC design that might be avoided in a
more, relative to alternative methods? conventional contract and vice versa.

Were all relevant stakeholders involved in the Participatory planning and decision-making ensure that all stakeholders (including the
D.ii.1 programme design? most marginalised groups, target groups, providers) identify core equity challenges and
how to address them.

Was there a robust targeting criterion in the A robust targeting criterion justifies the selection of participants and enhances a
D.ii.3 programme design? programme’s reach to the most vulnerable groups (e.g., the poor, people with
disabilities, gender-sensitivities).
D.ii.4 Will there be functional complaint and Complaints and feedback mechanisms generate evidence on critical needs and provide
feedback mechanisms? opportunities for the implementation to adapt accordingly.

Are there equity considerations at economy, This may include sustainable procurement (the cheapest sustainable option rather than
D.ii.5 efficiency and effectiveness levels? the cheapest ones) or local economy enhancement (employing community members
rather than more expensive non-local options).
D.ii.6
D.ii.7
D.ii.8
Average score
Overall summary: Equity
Rating Rating justification
 0.00

Rating Rating justification

 0.00

Rating Rating justification

 0.00

Rating Rating justification

0.00
 SIB Specific Estimates
Programme: FILL IN ON DATA CHECKLIST TA
Assessment done by: Name ↓
FILL IN ON DATA CHECKLIST TAB
Timelines Assessment date ↓
FILL IN ON DATA CHECKLIST TAB
Stage of project: Project planning (proposal)
Number of target participants ↓ Projected referral rate ↓
FILL IN ON DATA CHECKLIST TAB FILL IN ON DATA CHECKLIST TAB

A Cash Flow Assessment for SIB examines how the deployment of the impact bond funding by the investor may affect the investo
with a clear view of IRR and ROI for private investor.

Cash Flow Assessment (SIBs)

Year Outflow Inflow Net cash flow

£ -
£ -
£ -
£ -
£ -
£ -
£ -
£ -
£ -
£ -
£ -
£ - £ - £ -

Committed investment
Interest guess

On invested IRR 0.00%

IRR lifetime 0.00%
MM lifetime 0
ROI 0%

Cashflows (reconstructed from chart, NOT ORIGINAL)

£1.00

£0.90
 Cashflows (reconstructed from chart, NOT ORIGINAL)
£1.00

£0.90

£0.80

£0.70

£0.60

£0.50

£0.40

£0.30

£0.20

£0.10

£-

Outflow Inflow Cumulative net cash flow

A timeline assessment indicates the share of risk involved with public money at any time. The latter the payments, the less risk sh

Outcome Payments across time

Year Outcome Payment Percent Cumulative
0.00% 0.00%
0.00% 0.00%
0.00% 0.00%
0.00% 0.00%
0.00% 0.00%
0.00% 0.00%
0.00% 0.00%
Total £ - 0.00%

Outcome Payment Timeline

100.00%

90.00%

80.00%

70.00%
 100.00%

90.00%

80.00%

70.00%

60.00%

50.00%

40.00%

30.00%

20.00%

10.00%

0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

Percent Cumulative

Overall summary: SIB Specific Estimates

ific Estimates Return to Intro

FILL IN ON DATA CHECKLIST TAB

Position ↓
FILL IN ON DATA CHECKLIST TAB
Annualised discount rate ↓
FILL IN ON DATA CHECKLIST TAB
Project planning (proposal)
Projected engagement rate ↓
FILL IN ON DATA CHECKLIST TAB

nding by the investor may affect the investor's returns. This provides public managers

ssment (SIBs)
Cumulative net cash
flow Net Present Value
£ - £ -
£ - £ -
£ - £ -
£ - £ -
£ - £ -
£ - £ -
£ - £ -
£ - £ -
£ - £ -
£ - £ -
£ - £ -

rom chart, NOT ORIGINAL)

rom chart, NOT ORIGINAL)

Cumulative net cash flow

me. The latter the payments, the less risk shouldered by the public sector.

me Payment Timeline
100.00%

90.00%

80.00%

70.00%
 100.00%

90.00%

80.00%

70.00%

60.00%

50.00%

40.00%

30.00%

20.00%

10.00%

0.00% 0.00% 0.00% 0.00% 0.00%

Percent Cumulative
 Programme: FILL IN ON DATA CHECKLIST TAB
Assessment details Name ↓ Position ↓
FILL IN ON DATA CHECKLIST TAB FILL IN ON DATA CHECKLIST TAB
Timelines Assessment date ↓ Annualised discount rate ↓
FILL IN ON DATA CHECKLIST TAB FILL IN ON DATA CHECKLIST TAB
Stage of project Project planning (proposal)
Number of target participants ↓ Projected referral rate ↓ Projected engagement rate ↓
FILL IN ON DATA CHECKLIST TAB FILL IN ON DATA CHECKLIST TAB FILL IN ON DATA CHECKLIST TAB

Summary: A. ECONOMY
Are inputs of appropriate quality bought at a minimised price?

Metric Projected value Benchmark Value

A1.1 Total cost £ -
A1.2 Average per-participant cost £ -
A1.3 Total probability adjusted cost £ -
A1.4 Probability adjusted per-participant cost £ -
A1.5 Qualitative assessment score 0.00

Summary: B. EFFICIENCY
How well are inputs converted into outputs?
Metric Projected value Benchmark value
B1.1 Total output value £ -
B1.1 Per participant output value £ -
B1.4 Cost-efficiency ratio (cost per output) £ -
B1.5 Qualitative assessment score 0.00

Summary: C. EFFECTIVENESS
How well do those outputs achieve outcomes?
Metric Projected value Benchmark value
C1.1 Total outcome value £ -
C1.1 Per participant outcome value £ -
C1.2 Cost-effectiveness ratio £ -
C1.3 Benefit-cost ratio £ -
C1.4 Qualitative assessment score 0.00

Summary: D. EQUITY
How well do the activities reach all people that they are intended to?

Metric Projected value Benchmark value

D1.1 Quantitative equity metric 0%
D1.2 Qualitative assessment score 0.00