“Value for money” is a concept used by governments and others to evaluate programs and projects.
The evaluation takes into account the following:
- The cost of the program or project including, in the more fulsome evaluations, the life cycle costs of the program or project;
- The efficiency of the program or project, i.e., whether outputs are greater than inputs;
- The effectiveness of the program or project, i.e., whether the outputs meets program or project specifications; and
- In some programs or projects, the equitable distribution of the benefits, i.e., do they reach their intended targets in a fair manner?
In many countries, we are nearing the end of the first phase of the governmental response to Covid-19, that is to say the phase we could call: “flood the country with money to save lives.” The imperative was such that there was little appetite or time for customary analysis. When the pandemic struck, most governments were unprepared or, worse, in denial. There were some exceptions — such as Taiwan — but there was little time to learn from them or apply lessons learned in a timely fashion.
The result of the first phase is that countries have incurred extraordinary deficits and reinforced the central role of government. The first phase also debased most currencies, both economically and psychologically, so much so that an estimated 343 billion dollar federal deficit in Canada is taken in stride by the debt markets and most Canadians. It is expected that much of the deficit will be financed by debt with very long maturities, thus allowing inflation to assist.
Canada, like many jurisdictions, is now entering the second phase of its response. Governments have a better understanding of the pandemic and the strategy is to reconcile public safety with economic recovery.
As a result, programs and projects are once again being subjected to value for money analysis. But because money has been debased and is inexpensive, Canada should seize the moment and go big whilst building the nation’s balance sheet. Moreover, the pandemic has demonstrated to Canadians that governments are able to spend, if they so wish it.
One priority should be a program to bring the housing and infrastructure of all First Nation communities under Federal jurisdiction up to an acceptable national standard. In order to succeed the plan should be outsized and have ambitious timelines. It could be Canada’s equivalent of the US Marshall Plan which greatly helped in the reconstruction of Western Europe. This effort would benefit all Canadians as inputs would come from all over Canada and construction, operation and maintenance would involve local communities.