In 2006 the public sector audit agencies commissioned KPMG who worked with more than 100 public sector organisations to develop a suite of value for money indicators covering the five main areas of corporate services: estates management, finance, human resources, ICT and procurement. The audit agencies have now developed and introduced two new areas: communications and legal.

CIPFA in conjunction with KPMG have benchmarked the original five indicator sets for the last three years with more than 230 public sector organisations taking part in 2008/09.

“It has helped shape our thoughts on the structure of our chart of accounts and how we report the cost of back office services. Additionally, the focus on efficiency/effectiveness has led to us reviewing our cost base in certain areas and making savings”.

Source: Michael.Brodie, Assistant Director of Finance, NHS Business Services Authority

“CIPFA VFM indicators have become an important tool for many decisions within the ICT service, particularly costs of services to customers where our perception of service (user satisfaction) can be measured against cost (support cost per workstation etc)”.

Source: Jerry Garforth, Information Management Officer, City of Wakefield Metropolitan District Council

“We are using the data as part of our overall performance management and continuous improvement processes. In particular it has helped to identify areas for improvement including investment in professional training for staff”.

Source: Alan Ratcliffe, Assistant Director (Improvement), Cumbria County Council

“This indicator set will be genuinely valuable for managing and understanding the performance and value for money of these corporate functions”.

Source: Heads of Audit Agencies

This report was issued in May 2009 and strongly recommends the use of these indicator sets. This has led to a significant increase in interest in this benchmarking exercise.

The five audit agencies’ value for money indicators in HR, finance, procurement and estates management should be used by all public sector organisations. This should take effect by June 2009 for central departments, agencies and NDPBs and by December 2009 for the wider public sector. This will ensure that data is comparable and robust across all public sector organisations.

Source: Operational Efficiency Programme: Back Office Operations and IT Final Report

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