Value Generation

  • Value Generation

    Value Generation is a term we've developed to inform a new way of assessing the impact that services for people with additional needs have. It's not complicated. The words "Value Generation" aren't new, the 3 principles that sit behind those words aren't new either; however, what is new is the intention of Value Generation to change the values (in another seanse) that sit behind the way that services for people with additional needs are commissioned, funded and reviewed.

    For far too long services for people with additional needs have been commissioned within a system of segmented commissioning and a focus on cost control. Segmented commissioning and cost control are the prime movers in a situation where the NHS, social care & other commissioners engage in a negative competition to NOT fund peoples' additional needs in order to protect "their" budgets. If we had unified commissioning and a pooled budget, we'd have made progress but not enough progress because commissioning and funding would still be based primarily on cost control: who has the lowest unit cost, not who generates the most value.

    So we need unified commissioning, a pooled budget and a change of values. We need a move to Value Generation, which is 3 things:

    1. What are the outcomes for people?
    2. What is the cost-benefit to the public purse?
    3. What is the wider community benefit?

    The need to save money is understood. The practice of cost control in this context does the opposite. A failure to invest in preventative, enabling services such as supported housing inevitably leads to a need to fund otherwise avoidable emergency interventions as a consequence. Prevention has always been cheaper than "cure", and a lot less humanly painful. The second of the three Value Generation principles asks "what is the cost-benefit?" (of the services that are seeking to be commissioned and funded) so it's not as if money isn't an object. It's just that cost control is a crude and simplistic approach that's caused huge damage to publicly funded services.

    Any methodology that includes the three Value Generation principles should avoid the temptation to measure the first and third principles (outcomes for people and wider community benefit) in financial terms. To do so would be to give in to the cost control paradigm. These are qualitative outcomes, not quantitative outcomes. We should certainly measure the second principle (cost-benefit to the public purse) in financial terms though.

    The UK Government is currently thinking about the future shape and funding supported housing. We urge everyone involved in this to think about using Value Generation principles as a means of commissioning and funding supported housing services.

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