Value for Money Strategy


The University has had an explicit Value for Money (VFM) strategy since 2004, most recently updated by Executive Board in 2009.

Our VFM web site is available at:

The University is an educational charity that receives a substantial proportion of its funds from public sources. We seek to achieve value for money (VFM) from all our activities, however they may be funded. The University’s strategy is to embed value for money as part of our ongoing business processes and decisions.


Value for Money has three components, economy, efficiency and effectiveness. In the short term it can often be simplified as lowest price or cost but this is a mistake and it is important to try to achieve an outcome that also recognises the efficiency of any process or function and its effectiveness.


To achieve good VFM, we seek:

  • to integrate VFM principles within existing planning and review processes and embed the pursuit of economy, efficiency and effectiveness within operational management;
  • to respond to opportunities to enhance the economy, efficiency and effectiveness of activities and adopt recognised good practice where this makes sense;
  • to undertake VFM studies on areas of activity identified as worthy of review and apply the lessons learned to other areas of the University;
  • to promote a culture of continuous improvement;
  • to ensure that all staff recognise their continuing obligation to seek VFM for the institution as part of their routine activities;
  • to benchmark our activities against other similar activities and organisations where this is considered useful.

Since 2009, much of our work in this area has been under the heading of the ‘One University’ concept. Our commitments are to:

  • Simplify wherever possible;
  • Avoid duplication of effort;
  • Cut out ineffective processes where safe to do so;
  • Redefine processes and roles and, critically, commission supporting technology;
  • Aim for consistency of processes and ‘single source of truth’ for data;
  • Implement appropriate changes to processes without regard to the current organisational boundaries.

The single largest initiative under this heading has been procure to pay (P2P).

Governance, Management and Value for Money

The University’s governance structures are similar to those found in a majority of pre-1992 universities with Council as the governing body and Senate the supreme authority on academic matters. The University has adopted the CUC guidance on the operation of the governing body.
Responsibility for pursuing value for money lies with all members of staff; in a formal sense, the following roles have been agreed:

  • Council ensures that there are sound arrangements for risk management, control and governance, and for economy, efficiency and effectiveness. It keeps under review the arrangements for managing the resources under its control;
  • The Vice-Chancellor is the officer designated by Council as responsible for satisfying the governing body that the conditions of the HEFCE Financial Memorandum are being satisfied;
  • Audit Committee receives assurance during the year that satisfactory arrangements are in place to promote economy, efficiency and effectiveness. It maintains an overview and independent judgment on the effectiveness of the University's value for money arrangements. Its annual report includes its opinion of the arrangements for promoting economy, efficiency and effectiveness.
  • Executive Board is the formally constituted senior management team and is responsible to Council and Senate for the operation of the University including the use of key performance indicators, risk management and value for money activities. It submits an annual report on VFM to Audit Committee. VFM is specifically part of its terms of reference and the terms of reference for two of its key sub-committees, Budget Setting Group and Financial Monitoring and Budget Scrutiny Group;
  • Managers have the responsibility for reviewing and maintaining good practice in their own area of operation;
  • All staff should endeavour to seek and achieve VFM in all activities and to bring to management’s attention any opportunities for improvement;
  • A VFM steering group has also been formed to assist with operational matters, with membership from academic units, faculties and services and monthly scheduled meetings;
  • The Internal Audit Service considers VFM as an integral part of its work and carries out a small number of specific VFM reviews. The annual report from internal audit includes an opinion on the University’s arrangements for securing value for money.

Financial Memorandum

The HEFCE’s Financial Memorandum sets out the terms and conditions for payment of HEFCE grants to higher education institutions and imposes a formal obligation to deliver VFM. The governing body of each HEI must take reasonable steps to ensure that there are sound arrangements for risk management, control and governance, and for economy, efficiency and effectiveness (Value for Money). The Financial Memorandum requires Council to designate an accountable officer, who will normally be the head of the institution, as the person with responsibility for satisfying the governing body the conditions of the Financial Memorandum are being complied with. The Vice-Chancellor is the University's accountable officer.


Executive Board agreed the following mechanisms to help achieve our VFM objectives.

Internal Audit Service

In line with the HEFCE's code, the annual report from the Internal Audit Team must include an opinion on the adequacy and effectiveness of arrangements for:

  • Risk management, control and governance and
  • Economy, efficiency and effectiveness

Value for money considerations will form part of the agreed audit annual plan on the areas to be reviewed in the year. Value for money considerations will form an integral part of the routine work of the internal auditors. The Internal Audit Team will give an opinion on each investigation on value for money aspects. We will continue to ask the Internal Auditors to undertake specific value for money studies where appropriate. A member of the Internal Audit Team serves on the VFM Steering Group.

Procurement Office

The Procurement Office will continue to operate value for money procedures in the oversight of all the University's procurement. The Head of Procurement serves on the VFM steering group.

Financial Monitoring and Budget Scrutiny Group

Financial Monitoring and Budget Scrutiny Group specifically consider value for money issues when considering submissions and project proposals from the four budget holders (three PVCs for Faculties and the Registrar) and report on such matters to Executive Board.


The Registrar has particular responsibility for ensuring that the arrangements described above operate effectively.


Managers have the executive responsibility to maintain an awareness of good practices in their own area of operation and to ensure that these are followed appropriately.


All staff should endeavour to seek and achieve VFM in all activities and to bring to management's attention any opportunities for improvement.


We have good systems for generating management information. The way we measure and how we report will never be perfect but they are sufficient to enable good questions to be asked and further work undertaken to produce answers or solutions. For example, the Transparent Approach to Costing (TRAC) mechanism allows us to cost our research teaching activity in a way that was simply unavailable ten years ago.

Within the framework of the University’s strategy Vision 2021 we have developed a comprehensive set of KPIs. We can measure the success of our learning, teaching, research and engagement activity.

Benchmark data is weaker. It normally lags by at least 12 months and there are doubts about the consistency of measurements between HEIs. The results of the National Student Survey and Research Excellence Framework are central to any assessment of our effectiveness and hence to any assessment of VFM.

Financial Sustainability

The key objectives in our financial strategy are to:

  • Create capacity for strategic development by achieving an annual historic cost surplus of at least 2% of income, with a medium-term target of 4%;
  • Grow income faster than our peer group;
  • Identify and exploit opportunities for new areas of profitable income;
  • Maintain a robust balance sheet with sufficient cash reserves to meet our financial obligations;
  • Provide enterprise resource planning services, which are top quartile in higher education and meet our legal and ethical obligations.

John Hogan
26 April 2013