Delivering good value for money in a challenging economic environment
1. Wales Third Sector Funding Conference 2012
Venue Cymru, Llandudno
Tuesday 9th October
“Delivering good value for money in a challenging
economic environment”
Michael Hearty
Director General, Welsh Government
2. Summary
1. The financial context.
2. Value for money – what does this mean in practice?
3. Good corporate governance.
3. The third sector is important to Wales…
• An important provider of people facing services.
• £1.6bn income (2008-09) – 3.5% of Wales’ GVA.
• Employs 34,000 people – 2.6% of employed people in Wales.
• 33,000 voluntary, community & not for profit organisations.
• Often closer to local issues and seen as more flexible and
responsive.
• Not for profit – value driven.
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4. You help us deliver many services across Wales…
A quick selection includes:
• Supporting service design - disability sports, community arts etc.
• Advice and advocacy services - Citizen’s Advice Bureau, Shelter
& Victim Support etc.
• Fulfilling contracts for statutory services - domiciliary care,
residential provision for adults with learning disabilities, alcohol
and substance misuse services etc.
• Other services delivered against grants or
contracts - Carer support, Womens’ Aid, Care
and Repair, Communities First Partnerships etc.
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5. Which is why our contribution to the third sector has
been increasing…
• Between 2001-02 and 2009-10 our spending on the third sector
has increased year on year.
3 Source: Welsh Government Accounts
6. But these are hard times!
We are currently managing the worst budget settlement since
devolution.
No one has been left unaffected by recent financial conditions:
• The financial crisis of 2008 and UK recession.
• The resulting increase in public sector borrowing
and debt.
• The global downturn’s impact on international
public finances.
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7. Our budgets are falling…
By 2014-15 the Welsh budget will be nearly £1.8 billion lower in real
terms than it was in 2010-11.
Overall, this represents a real terms budget reduction of 12%.
And there remains a lot of (downward) uncertainty about even these
figures, due to:
• The nature of the current recession;
• Risks around the cost of UK borrowing; and
• Future UK Government decisions.
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8. Which has meant that we’ve all got ask ‘how can
we achieve better value for money’?
• With less money to hand - and increasing service demands in
the face of UK Government cuts - we need to get ‘more bang
for our buck’.
• This will not be easy.
• It will involve a little more work from yourselves.
• And we will be asking for more information
on your programmes and initiatives.
• But the people of Wales deserve it.
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9. So, what does this actually mean in practice?
Well, when looking at bids for Welsh Government funding, we
are placing greater emphasis on ensuring:
1. That the services you propose clearly match the outcomes
we are trying to achieve.
2. That the services you offer are the best way of delivering
results.
3. That there’s a clear and effective way of
evaluating the success of these services.
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10. Step 1: Aligning grant or procurement bids to
outcomes
When making bids for public funds it helps if you make it explicit
how your initiatives relate to WG outcomes…
Outcomes are conditions of wellbeing for the defined population
…so think “Population” – “Place” – “Condition of wellbeing”.
We want elderly people in Torfaen to live in a safe community.
We want children in Cardiff to reach their full potential.
We want families in Wales to be prosperous.
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11. Step 2: Providing clear evidence to show how you’re
initiatives will deliver results
Quantity Quality
How much did we do? How well did we do it?
# of students % of students gaining a
# completing the course qualification
Effort
# passing the course Average grade
achieved
Is anyone better off?
% who found a job in the following 6 months
Effect
% who found a job after 6 months where they used
their new qualification/skills
% in long-term employment after 1 year
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12. Step 3: Demonstrate how your programmes can be
evaluated…
Customers: Long term, unemployed adults in Treforest.
How well did we do it?
• 100 adults attended the course, with a 70% pass rate.
• The average grade was a C.
Is anyone better off?
• Of those who passed the course, 50% found employment after 6
months.
• Of those 50%, 12 of the students said that
they were using their new skills in their job.
• Overall, 30 adults were in long-term
employment after 1 year.
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13. To support you in this, we are improving the
way we issue grant funds…
• A single Centre of Excellence providing advice, expert
support and guidance to Welsh Government staff .
• Ensuring funding programmes are delivered in a more
consistent manner (based upon outcomes).
• Developing our workforce to offer an effective and
efficient service for non-procured funding.
• Increasing the level of financial and
management information available to inform
effective decision making.
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14. And part of value for money is getting the
governance right…
• We recognise that it is not our job to do your corporate
governance – you are independent organisations.
• But we need to have confidence in the health of your
corporate governance so we can protect taxpayer’s
money.
• And this is what our due diligence work is all about.
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15. So, to summarise…
• With less money in our pockets, we need to redouble our
efforts to achieve value for money.
• Value for money - is all about:
• matching your activities to the outcomes you are trying to
deliver.
• making sure you collect the right information to demonstrate
delivery.
• and making evaluation a core part of the work you do.
• And, lastly, developing our corporate relationship to help us
both demonstrate how we’re achieving value for money.
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