Belinda Duff

In October 2010, ITAD was commissioned by the DFID Politics and the State team to conduct research and propose a way forward for Governance programmes in conducting value for money assessments as part of a consultancy on measuring the impact and value for money of DFID Governance programmes. The specific objective stated for our work on value for money (VFM) in the Terms of Reference was:

“To set out how value for money can best be measured in governance and conflict programming, and whether the suggested indicators have a role in this or not”.

This Report presents background on VFM from documentary research (section 2); explains the analytical framework that captures key concepts in VFM, and sets out options for improving VFM (section 3). It outlines one specific option, a “3 Es ratings and weightings approach to VFM” as presented to Governance and Conflict Advisers at a DFID Research Day on 25 November 2010, and includes their response plus some initial reactions from Finance and Corporate Performance Division (FCPD), particularly with regard to Business Case compatibility (section 4). Finally, the Report proposes ways in which initial findings can be refined and further developed to support Governance programming and build staff competence and confidence in conducting VFM assessments (section 5).

A good results framework that enables programme progress to be effectively monitored and explained has never been more important, particularly in times of financial austerity. As a public sector organisation, DFID must have the capacity to prove that its budget is spent wisely, and the ability to demonstrate the impact and value of its programmes to core constituencies.

Governance and conflict programming form an important part of DFID’s global programme portfolio and account for a significant proportion of annual resource allocation (GPR, 2010). This is likely to grow as DFID commits to expand its presence in fragile and conflict-affected environments (DFID, 2009).

It is however widely acknowledged that the effects of governance and conflict interventions on poverty reduction or enduring peace and security are seldom direct and easy to measure. International governance datasets (such as the World Governance Index), whilst comprehensive and well-resourced, seldom have relevance at actual country level as their measurements are often set at higher objective levels, yet there is a paucity of useful programme level tools available to enhance measurement in this area.

In October 2010, ITAD was commissioned by the DFID Politics and the State Team to assess the quality of a suggested list of governance and conflict indicators as part of a wider contract to support elements of the Results Action Plan.

The indicators have been tested using a set of normative criteria that collectively aims to ensure the types of measurements included in the list and the corresponding data sources are fit for intended purpose. Although the study has to some extent been constrained by lack of time and available information, attention has given to interrogating the traction of indicators with existing programme results chains and underlying theories of change, including in contexts of fragility and conflict, such as Nigeria and Afghanistan.