Our approach to assessing Value for Money

Aid budgets are under intense scrutiny; accordingly, aid agencies and development practitioners face a growing need to demonstrate Value for Money (VfM). This is appropriate and to be welcomed. However, until recently, this need had not been matched with appropriate methods to support meaningful VfM evaluation – with the prevailing tendency being to rely on readily quantifiable measures, even when those do not capture the most important aspects of the change being pursued.

In 2016, Oxford Policy Management (OPM) teamed up with Julian King, an evaluation specialist, who worked with staff from across the company to develop a robust and distinct OPM approach to assessing VfM. Combining contemporary theory and practice from evaluation and economics, our approach provides a system for aligning multiple methods and tools to support transparent, evidence-based judgements about how well resources are being used and whether enough value is derived to justify the investment. The approach was successfully piloted in two UK Aid programmes: MUVA, a women’s economic empowerment programme in Mozambique, and the Sub-National Governance (SNG) Programme in Pakistan.

We have now applied this approach to numerous development projects and programmes spanning a range of clients, countries, sectors, and budgets. It has been well received by our clients (both funding agencies and partner governments) and project teams alike, who particularly appreciate the use of explicit evaluative reasoning. This involves developing definitions of what acceptable, good, and excellent VfM looks like in the context of each project. Critically, these definitions are co-developed and endorsed upfront, in advance of implementation and before evidence is gathered, which provides an agreed, explicit, and transparent basis for making judgements.

Responding to high demand, in 2018 we published a short, practical guide on our approach to VfM, which detailed the underlying conceptual framework and set out the practical steps required to apply it, including how these can be integrated with project evaluations and routine management activities. The guide has lived up to our hope of making a valuable contribution to strengthening the accountability, learning, adaptation, and impact of development interventions. Our approach has not only been used by our clients, but also by other consulting firms, government agencies, bilateral and multilateral organisations, and non-governmental organisations worldwide.

It now gives us great pleasure to publish the Second Edition of the guide, building on our more recent experience in using the approach in an increasingly diverse range of settings.