Singapore’s 2017 budget has set a new tone for the government. The Finance Minister last month announced a permanent 2% cut to the budget caps of all Ministries and “Organs of State”, decreasing the growth rate of budgets in the years to come.
The government faces fiscal pressures as it supports an ageing population. Spending on social care, health services and infrastructure are all expected to increase. Healthcare spending has already doubled in the last five years. “As infrastructure and healthcare needs increase, it’s more taxing on the overall national budget,” says Chia Ti Yu, Director of Finance, Systems and Projects at the Ministry of Finance.
GovInsider caught up with Chia to get advice on how to manage these limited resources as best as possible.
Track project outcomes
First, ministries should evaluate the outcomes of existing projects before they allocate further resources to them, he says. Let’s take healthcare as an example. Building more hospitals is not enough. “That may not be the way going forward because with our ageing population, this is just growing,” he says.
Instead, spending should be focused on programmes that prevent the elderly from falling ill. “That’s why nowadays there is more and more emphasis on ‘active ageing’. It’s actually to go on a preventive mode by getting them to be more active,” he says.
For public transport, travelling speeds, amount of travelling time taken and congestion levels at the Electronic Road Pricing gantries are good proxies, he suggests.
Next, officials should ensure that tenders are fair to all potential bidders. “We do not favour certain brands; we do not favour certain vendors,” Chia says. The steps for evaluating successful bids should also be made clear in the tenders.
Chia’s team ensures that all tenders meet these rules. He calls himself the “gatekeeper” for procurement in the Finance Ministry. “If the tender is going out, the specifications will be scrutinised by my team to ensure that everything is fair, open and transparent,” he says. This way, abuse of limited resources can be prevented, and overall, it leads to better accountability, he explains.
As Singapore’s fiscal landscape changes, the role of finance officials across the government is changing too.
Finance officials need to be involved when policies are being designed. Traditionally, they are brought in after programmes are drafted to calculate the cost, which is often perceived as “putting barriers” in policymakers’ way. But now “they have moved from being a bean counter or bookkeeper to partnering other stakeholders,” he says.
Finance officials have to be more “forward looking”, rather than just record what has already happened. “We can be involved from the start and actually steer what the whole programme should be; how it should be accounted; how it should be managed,” says Chia.
The impact of this change in role has been to reduce complications in projects by identifying financial issues earlier on, says Chia. “Earlier, we have seen a lot of time being wasted to unravel transactions after they have been firmed up,” he says. Whereas now “we can help to steer in the right direction from the start,” he says.
Since 2013, MOF has introduced a “finance specialist track” to prepare young finance officials in the public sector for this changing role. Officials rotate through different aspects of finance, such as taxation, budgeting, and handling corporate accounts. MOF finance officers spend a maximum of three years in each area to ensure they can pick up skills across the spectrum.
In the future, the Singapore Government will see a “leaner finance sector” with officials doing more value-adding work like partnering with policymakers, believes Chia. With the use of digital and analytics technologies in finance, “boring checks” are being eliminated. Instead, finance officials will give greater focus to analysis and targeting high risk issues.
There will be a lot more electronic financial transactions – called “straight-through processing” in finance lingo – in the government. Ministries are using analytics to pick up trends and anomalies in financial transactions. There will also be more self-service and cashless payments, he says. Civil service staff claims can now be done through an app, for instance.
Singapore also has an online procurement system GeBiz which analyses tenders, allowing the government to identify processes it can streamline and analyse purchases. The government is now in the process of upgrading this entire system, and is gradually implementing the “next gen” GeBiz.
Singapore’s healthcare and infrastructure spending will continue to grow. But by tracking project outcomes, keeping up with new skills and using analytics, officials across the government can really do more with less.
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