Autumn Budget: how can the Government deliver on the “value for money” promise?

Since 2010 there has been a heavy emphasis placed on the first of the value for money principles—economy, or reducing expenditure—at the expense of other essential tenets. Too often there is a fixation on minimising input costs, neglecting efficiency and the actual attainment of results (effectiveness) crucial for public service delivery, as well as equity in how that value is distributed. As the press, the public and policymakers alike assess the autumn budget, it will be ensuring value for money that drives its success or failure. But how can we ensure that the Chancellor’s new announcements deliver genuine value for money while maximising social impact?

The latest report from the Government Outcomes Lab (GO Lab) reflects on the last 15 years of social outcomes partnerships (also known as impact bonds) in the UK. Drawing on this analysis, as well as the insights of the Chartered Institute of Public Finance and Accountancy’s Chief Economist Jeffrey Matsu, here we explore some of the ways government might achieve a more holistic approach to value for money.

Measuring outcomes – the goals that we want to achieve – enhances our understanding of value for money by shining a light on the value being delivered. By tracking outcomes, government can clearly see what is being accomplished through public spending, ensuring that interventions and policies are effective. This transparency in both outcomes achievement and expenditure allows for better insight into which services are the most impactful, enabling government to demonstrate concrete achievements rather than simply assuming they are making a difference.

One example of this is the UK Department for Culture, Media and Sport’s Life Chances Fund, an outcomes fund that invested £70bn to improve life opportunities through a series of projects focused on issues such as tackling homelessness, helping children on the edge of care, and supporting individuals struggling with mental health back into employment. Under this fund, 29 projects across the country were delivered as social outcomes partnerships, where payment was conditional on the outcomes they delivered. Our analysis shows that this approach can enable the government to clearly see what was being accomplished with public spending.

Transparency in both outcomes achievement and expenditure allows for better insight into which services are the most impactful, enabling government to demonstrate concrete achievements, contrasting sharply with services that assume they are making a difference without reporting robust evidence of impact.

This is emblematic of a wider issue, the significant lack of consistency in the monitoring and evaluation of our public services, both in whether policies and projects are evaluated at all and the methodologies and frameworks applied. Innovative dashboards like the one we developed for spatial inequalities and mission-led growth help synthesise seemingly disparate data and allow for benchmarking across places. These should be introduced early in the design stage of an intervention and then maintained regularly throughout its lifecycle.

Outcomes-based approaches further clarify and assess the purpose and impact of policies. Good public financial management requires evidence-based decisions on allocating public funds, alongside mechanisms to track progress and ensure value for money is achieved. Governments should invest in training practitioners across the public sector to understand value for money (VfM) concepts and toolkits, strengthening the capacity to evaluate and enhance public spending.

As government seeks to reform its public service delivery, across homelessness, child welfare, the NHS and more, it is vital to ensure that the services being delivered are efficient.  One enabler of increased efficiency, which we have seen across the Life Chances Fund projects, is the continued improvement of services as they are being delivered. Transparency is ensured through comprehensive data programmes, where projects regularly report on what outcomes were achieved, facilitated the iterative learning and adaptation. This real-time approach enables resources to be focused on the most efficient strategies, optimising impact for a given level of spending and avoiding inefficiencies that may otherwise only be identified in end-of-project evaluations, if at all

The Kirklees Better Outcome Partnership is an example of how this has worked to support adults with housing-related support needs. To date, 5,514 people have achieved at least one positive outcome through KBOP. Of these 3,675 people have achieved suitable, safe accommodation and 2,727 people have achieved an employment or training outcome (Hanley, 2024 p. 32).

In addition to transparency ensuring efficiency, proper checks and balances are also required to ensure public sector organisations are spending money responsibly, proportionately, and managing risk adequately. Internal and external controls, including a robust local public audit system, are essential to ensure decisions taken are the right ones and help course correct if they are not. According to the National Audit Office (NAO), only 8% of major government programmes have a robust evaluation framework. This gap highlights the urgent need for a cultural shift toward more open and comprehensive reporting, paired with learning and evaluation partners, as highlighted by the Life Chances Fund's collaboration with the GO Lab at the University of Oxford. 

The experience over the past 15 years of Social Outcomes Partnerships also points to the value of working in partnership between commissioners, service providers and other socially motivated actors, which can be a way of ensuring better equity on programmes.

This partnership working looks and feels different from traditional monitoring and evaluation techniques. The focus on outcomes (instead of activities being delivered) allows for fundamental flexibility on the ground. Besides for efficiency, measurement of performance is used to learn and improve services continuously through partnerships, to course correct, to listen to the perspectives, experiences and ideas of those using services to ensure their needs are being met. For example, the Future Impact social impact bond in Nottinghamshire, UK uses a person-led approach to support young people with special educational needs through tailored education and training programmes, adjusting interventions based on regular re-assessments.

The upcoming multi-year Spending Review and the creation of the Office of Value for Money should encourage a national conversation on the future of public services and the shift to a whole system approach in value creation. Managing public money should not just be the narrow concern of accountants; it is integral to the country’s financial and social health. This is especially so with the added £70bn per year to public spending over the coming parliament. It is crucial that we know that this expenditure is getting to the right places, at the right time, and in the right way.

The government has an opportunity to apply the lessons learned from past interventions on how to achieve value for money. For too long, the focus has been on cost-cutting at the expense of value. Our research has shown that that Social Outcomes Partnerships, if well designed, can be key to unlock support services that are efficient, effective, and equitable.