Assessing value for money (VfM) is increasingly important for policy makers around the world. Indeed, in 2024 the new UK government has established an Office for Value for Money.
In this new Guide, Alex Hurrell and Julian King introduce an interdisciplinary approach to VfM, 'Value for Investment', which combines economic insights and evaluation methodology.
This guide (King & Hurrell, 2024) introduces the Value for Investment approach in the UK domestic policy context to meet needs that cost-benefit analysis alone cannot fulfil. In their approach, King and Hurrell challenge the notion that Value for Money and cost-benefit analysis are interchangeable terms. They explore the idea that conflating the two impedes our ability to make good resource allocation decisions.
The guide advocates for a more inclusive approach that integrates multiple values (social, economic, environmental, and cultural) and diverse evidence sources (qualitative and quantitative) for more comprehensive VfM assessment. An evaluation guided by the VfI system can draw on the strengths of CBA without privileging economic methods and metrics over wider evidence and criteria.
The Value for Investment approach uses mixed methods (integrating quantitative and qualitative evidence), employs evaluative reasoning (interpreting evidence through the lens of explicit criteria and standards – improving transparency in the rationale for evaluative judgements), and is
participatory (involving stakeholders in co-design and analysis).
It is designed to be intuitive and practical to use by following a logical sequence of steps.
Our new Guide is designed to complement existing VfI guidance such as:
This Guide focuses on the interface between cost-benefit analysis and the broader fields of evaluation and economics, including:
In setting out these arguments, we acknowledge the UK Green Book as HM Government’s central guide for appraisal and evaluation, and the Magenta Book as its central guide for evaluation methodologies and practices across the policy cycle.
This new Guide aims to help those tasked with assessing Value for Money to design and deliver context-appropriate assessments that contribute to good resource allocation decisions and positive impacts.
The authors also offer training workshops on Value for Investment: