“Delivering good value for money in a challenging economic environment” 

 

Michael Hearty

Director General, Welsh Government

Wales Third Sector Funding Conference 2012Venue Cymru, Llandudno

Tuesday 9th October

1. The financial context.

2. Value for money – what does this mean in practice?

3. Good corporate governance.

Summary

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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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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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.

Source: Welsh Government Accounts 3

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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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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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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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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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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Step 2: Providing clear evidence to show how you’re initiatives will deliver results

How much did we do? How well did we do it?

Is anyone better off?

Quantity Quality

Eff

ect

E

ffo

rt

# of students

# completing the course

# passing the course

% of students gaining a

qualification

Average grade

achieved

% who found a job in the following 6 months

% 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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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. 11

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.12

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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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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