Quantitative VfM assessment will be different in detail for different sectors (See Section 4). As set out in the Guidance, quantitative evaluation should be undertaken in accordance with the HM Treasury "Green Book"3. It will generally include:
a) quantitative assessment of the relative life cycle costs and benefits of different options under consideration to meet the needs identified;
b) quantitative analysis of different procurement options within the overall programme level decision of revenue funding may also be required - if there are significant phasing, bundling, packaging etc. options then a quantitative evaluation of the likely differential costs and benefits of each should be considered;
c) quantitative analysis to demonstrate a "needs not wants" approach to developing the design and specification of the preferred option to include:
i) challenge and benchmarking of space allocations against recent relevant comparators;
ii) challenge and benchmarking of unit costs against recent relevant comparators;
d) at the procurement level, quantitative analysis will focus on the evaluation of competitive tenders from the marketplace to deliver the preferred option. SFT will have a particular role in evaluating the value for money of financing costs, as this element of the cost is particularly important to the programme level selection of revenue funding, and impacts on the centrally held revenue budgets.
SFT will generally have an external challenge role in relation to the quantitative demonstration of value through adoptions of a "needs not wants" approach, with operability and sustainability of the asset taken fully into consideration. This analysis should not be based on a "lowest possible cost" approach, and should incorporate life-cycle costs. Further detail on SFT's role is set out in Section 4 below.
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3 http://www.hm-treasury.gov.uk/data_greenbook_index.htm