Value for Money: Narrative vs. Number

We in the development community have likely all wrestled with the concept of “value for money.” While it sounds straightforward, the concept can be difficult to pin down. This is because value for money is not only what is cheapest or most evidence-based or even what responds most immediately to an identified bottle-neck. The final decision hinges on a narrative rather than a number, and human judgment rather than money and formulas.

Demonstrating good value for money requires making the case that in a particular context, using available resources in the proposed way will deliver the best outcome and impact. At DFID, we have circled round the issue a number of times looking for ways to improve and strengthen our focus on value for money without losing vision or cutting edge thinking. In the end, a case for investment, centered on a compelling value for money narrative, has several key ingredients:

➤ ACCURATE STATEMENT OF THE PROBLEM: Defining with precision the problem that a program aims to address is the essential starting point and can often be overlooked in favor of a broader analysis.

➤ EVIDENCE REVIEW: Evidence may include more than just proof that an intervention delivers a specific outcome and could also include cost-effectiveness data and efficiency data. If evidence is in short supply or inconclusive, the value for money narrative should explain how an approach will build or strengthen evidence.

➤ OPTIONS APPRAISAL: How could evidence be applied to address the identified problem? What is the cost? Which option is the best and why? Short-term and long-term costs and impacts should be considered. Deciphering what are and aren’t good options can build confidence in those selected.

➤ EXPLICIT THEORY OF CHANGE: This step links the program to the problem identified above: How will the chosen
option work? What explicitly is meant to happen to ensure results that address the problem are identified? How will we know if it is successful?

➤ TRANSPARENT MONITORING AND EVALUATION strategy to demonstrate results and contribute to building the evidence base whether this is successful or not (failure is equally important to record). There are several excellent articles in this edition of Impact that talk about measurement and results. Taken together, this line of sight from well-articulated problem through evidence for action, theory of change and scrutiny of results leads to a more transparent and accountable use of funds, promoting better understanding about underlying assumptions and making explicit anticipated transformations at individual, community and national levels.

Over time, it may also broaden and strengthen public understanding about development decisions within and between donor and host countries, making the link between problems and programs more transparent and comprehensible. U.K. Secretary of State for International Development Justine Greening has repeatedly said she considers the value for money agenda to be an essential part of building transparency and accountability both in the U.K. and in development practice.

There’s a snag though. With such an explicit concern for evidence and transparent monitoring and accountability, some fear (not without justification) that only programs based on existing strong evidence are funded. Where does new learning come from? How can we remain ready to take risks, and what about experimentation and testing new ideas opportunistically? While this is a risk, its mitigation lies exactly in the strength of the narrative itself. If there is no evidence, we need to be upfront about that and demonstrate how the proposed intervention will contribute evidence to address a crucial problem; if it’s not clear whether the theory of change is sound, build that uncertainty into the program and design a program that can test
alternative approaches.

Good program design, incorporating flexibility and innovation while still based on solid value for money narratives, will walk the line between reassuring cautious decisions-makers that funds are being soundly used and yet strengthening evidence, taking risks and pushing the boundaries of development. The value for money narrative can thus be a handy tool rather than a straight jacket.

ALLISON BEATTIE, Ph.D., is a health and development practitioner. At DFID, she has served as Global Health Services Team       Leader, acting Director of the Human Development Department and Head of Programmes in Zimbabwe. Allison lived and worked in    Africa for more than 20 years as a policy adviser, researcher and program manager in Mozambique, Zimbabwe and South Africa. Shehas a Ph.D. from the University of London. Allison is currently on leave from DFID.