1. Overview
      1. The 10 best practices are:
    1. Meritocracy
      1. This is perhaps the single most important practice that resulted in a clean and efficient civil service. When Mr Lee Kuan Yew retired as Prime Minister to become Senior Minister, senior civil servants attended a farewell dinner in his honour. His opening remarks were that all the guests there that day were there because of who they were and NOT because of who their fathers were, and that was something Mr Lee said he was going to leave behind for the nation.
      2. The principle of meritocracy has meant that scholarships were given to the ablest and brightest 18 year-olds to attend the best universities in the world and thereafter to be bonded to work for the government for 8 years. Promotion is not based on seniority alone and performance and potential would be more important. Postgraduate scholarships were given to those identified for higher appointments.
    3. Early 1970s- Efficiency and Effectiveness Reviews and the Setting up of the Management Services Department (MSD)
      1. MSD was established by the then Deputy Prime Minister, Dr Goh Keng Swee, to be responsible for the efficiency and effectiveness of the public sector. It served as the in-house consultants, think-tank and trouble-shooting arm of the government and carried out organisational reviews and strategic planning exercises. In the mid-70s, a study was done as to whether the Department would be better placed under the Prime Minister's Office but the conclusion was that it should be placed under the Ministry of Finance as its Minister was responsible for the efficiency and effectiveness of the public sector.
      2. In 1985/86, during the recession, it was also the Secretariat of the Business Enterprise Committee, reviewing rules and regulations affecting businesses. Of the rules reviewed, including suggestions from the public, 50% were changed for the better. Singapore pulled out of the recession within 1 year.
      3. The Department was staffed by returned scholars, who were sent on postgraduate scholarships in the best universities in UK and USA, reading various management and public administration courses.
      4. It was responsible for introducing the following to the Civil Service:
      1. MSD also provided lecturers to lecture part-time on management topics at the then Civil Service Institute (now Institute of Public Administration).
      2. MSD was corporatised in July 1995 into a company, MSD Consultants Pte Ltd, 100% owned by Temasek Holdings Pte Ltd, the Singapore Government Holding company under the Ministry of Finance. Thereafter it had to compete for jobs on an equal footing with private consulting firms.


    1. Mid 1970s-Planned Reviews of Ministries by MSD
      1. This covered:
      1. Each ministry and its departments would be reviewed once every 5 years and the results presented to its Permanent Secretary and Minister.
      2. When MSD was corporatised in 1995, this task was passed onto the Auditor General's Department (AGD). The AGD either undertake the reviews itself or farm it out to external consultants on a tender basis.
    1. Late 1970s-Computerisation and Setting up of the National Computer Board
      1. In the late 1970s, MSD undertook a horizontal study across all ministries to determine the areas for computerisation/mechanisation. In the past, computerisation was the responsibility of the Computer Services department of the Ministry of Finance and the computerisation effort was rather slow.
      2. MSD identified many areas for computerisation and as a result of the study, it was decided to decentralise the computerisation effort to the respective ministries and the National Computer Board (NCB) was established to co-ordinate this task. The establishment of NCB was also to facilitate the recruitment of computer professionals who could not fit into the civil service pay scales then.
    3. Mid 1980s-Performance Budgeting
      1. This was introduced and implemented in mid-1980s. Subsequently, in 1986, MSD introduced management accounting systems (activity-based costing) (MAS), which cost each financial performance indicator. The first MAS was introduced in the Navy and the second the Air Force. Now every department and ministry is funded on the basis of performance budgets.
      2. Examples of funding are:
      1. Increases are pegged to the RPI minus X formula, where RPI is the retail price index and X is the efficiency expected out of the ministry/department. In the case of health, they are allowed an increase of Y for technology improvements.
      2. This obviated the need for line-item budgeting which in the past meant that the Ministry of Finance played the role of watchdog for each line item. That was a tedious and non-productive process often resulting in one not seeing the woods for the trees, without any performance indicators.
    1. Late 1980s-Performance Indicators Published in the Budget Book
      1. This formalised the process and allowed the public to keep track of the performance of the ministries/departments. It also ensures that the ministries take their performance seriously.
      2. Some of the indicators are:
    1. Mid 1980s-Management Accounting and Activity-based Costing
      1. Performance budgeting cannot take place without a corresponding introduction of an effective management accounting system (MAS) to measure the cost of each financial indicator so that it could be capped using the RPI minus X formula. MSD introduced such a system in the Navy, using the Activity-based Costing (ABC) method. ABC is especially useful as a basis for measuring support services e.g. training, human resource, stores, computer services, accounting and finance, and planning to see if they are too fat and to set performance measures. Line departments could then question the fees that they are being charged for the use of such services. Some leeway for out-sourcing should be allowed under such a system. A transfer-pricing system was introduced.
      2. MAS and performance budgeting enables the delegation of authority to use block votes because there is now a performance measure and an accountability system.
      3. After the Navy, the Air Force was next and then MSD suggested that this function be passed to the Accountant-General's Department for implementation in all ministries and departments in the early 1990s.
    2. Early to Mid 1990s-Salaries of Civil Servants Were Pegged To The Private Sector And At The Same Time Doing Away With The Iron Rice Bowl Concept
      1. In the past, once you are appointed and placed on the pension scheme, you would not be asked to leave unless it was for gross misconduct, e.g. corruption. This concept of a job for life is often called the iron rice bowl. However, with the advent of high civil service salaries, the Government could no longer afford to keep marginal performers and pay them high salaries. Hence several senior administrative officers were told that they no longer have a career path and encouraged to retire early.
      2. This move is important to obviate complacency that could follow once a civil servant reaches a comfortable grade. Because salary revisions are given to all in the same grade, this person would benefit even if he were a marginal performer.
    3. 1990s-Corporatisation/privatisation and Establishment of Statutory Boards
    4. Core Government Functions

      1. Even the core government ministries have corporatised some of its departments or converted them into statutory boards. E.g. the Ministry of Defence recently announced the setting up of a statutory board for its defence technology arm. The Inland Revenue Department of the MOF has been converted into a statutory board, the Inland Revenue Authority of Singapore, IRAS, in 1991 and funded on a % of tax collected basis. MOF corporatised its Management Services Department in 1990, as MSD Consultants Pte Ltd.

        Service Delivery Activities

      3. These organisations rely on a mixture of privatisation, corporatisation, formation of statutory boards, executive agencies, management accounting systems and performance budgeting with performance indicators to keep themselves efficient. E.g. MOH has corporatised most of its hospitals with subsidies for each class of ward on a per patient basis. The MOH HQ is now a policy-making and watchdog organisation. The Public Works department has recently been corporatised.
      4. The ENV has corporatised its refuse-collection arm and it has to compete with private-sector companies for government contracts.
      5. As for the Ministry of Communications, the Land Transport Authority was set up a few years ago to take over the functions of the Registry of Vehicles, Mass Rapid Transit Corporation and the Roads Branch of the Public Works Department. It is funded on a per vehicle population basis. Singapore Telecoms was corporatised in 1993 and is now being supervised by the Telecoms Authority of Singapore (TAS), which also supervises other telecoms operators such as M1.
      6. The Port of Singapore Authority was corporatised on 1st October 1997 into the PSA Corporation Ltd. under Temasek Holdings. Its subsidiaries include MAP Services Pte. Ltd.; Singapore Enterprises Pte. Ltd.; SPECS Consultants Pte. Ltd.; Bohai Rim Investment Pte. Ltd.; Changi International Airport Services Pte. Ltd. and; Suzue-PSA Cold Storage Pte. Ltd.
      7. On 1st October, 1995, the Public Utilities Board's electricity and gas undertakings were corporatised into 5 subsidiaries - a gas subsidiary (PowerGas), an electricity supply subsidiary (Power Supply), an electricity transmission and distribution subsidiary (T&D Company), 2 generator subsidiaries under Singapore Power Pte. Ltd. as holding company. The water department remains under PUB.
      8. Public housing is under the Housing and Development Board, a statutory board.
      9. Some independent schools have been established under the Ministry of Education e.g. Raffles Institution and the Anglo Chinese School.
      10. The Ministry of Information and the Arts has a Singapore Broadcasting Authority, which is a statutory board with regulatory and promotional functions, but the actual delivery of the services is under a corporatised entity, the Singapore International Media. This, in turn, has subsidiaries such as Television Corporation of Singapore, TV 12, and Radio Corporation of Singapore, which actually deliver the broadcasting services.


    5. Running State-Owned Enterprises Purely on a Commercial Basis
      1. Singapore is one of the few countries which run their state-owned enterprises (SOEs) purely on a commercial basis. The government-owned companies are held under a holding company, Temasek Holdings Pte Ltd, registered under the Companies Act. It is under the Ministry of Finance. The companies are run entirely on a profit basis and are managed by professional managers, rewarded in the same way as private-sector employees. These managers are not civil servants.
      2. Unlike many other countries, Singapore has no hesitation to close down loss-making SOEs. Also the CEOs of these SOEs are hired on a merit basis.
      3. Some of the larger SOEs are listed on the Singapore Stock Exchange, e.g. Telecoms, Singapore International Airlines, DBS Bank, Keppel, National Iron and Steel, and Singapore Technologies Engineering. But the appointment of the Chairman, board of directors and CEO still rests with Temasek Holdings.
    6. Mid 1990s-PS 21 (Public Service for the 21st Century)
      1. In May 1995, the Permanent Secretaries decided to mount a deliberate exercise called "Public Service for the 21st Century" or PS21 for short.
      2. The PS21 has two basic objectives:
      1. The first objective is more tangible but the second is far more fundamental. It involves transforming mindsets and creating a different organisational culture and norms. PS21 is a change about change- not change to a specific final stage but an acceptance of the need for change as a permanent state.
      2. To ensure interest in PS21, several Committees were established - The Central Steering Committee, the PS21 Functional Committees, The Organisations’ PS21 Committees, PS21 Office.

      4. The Central Steering Committee – This is the Committee of Permanent Secretaries that is chaired by the Head of Civil Service. The Committee oversees the progress of PS21 with the following commitment:
      1. The PS21 Functional Committees – These four committees each address one of the elements of PS21. The four elements being Staff well being, Excel, Organisational Review and Quality Service. The four committees are chaired by Permanent Secretaries with representatives from all ministries, they are committed to share information, develop ideas and spearhead inter-ministry organisation.
      2. The Organisations’ PS21 Committees – Working the proposals and managing the process are the responsibility of ministries, statutory boards and organs of state. This work is overseen by PS21 Committee, headed by the Chief Executive Officer at each organisation.
      3. PS21 Office – Making known the efforts of Ministries, Organs of State and Statutory Boards is the task of the PS21 Office (PSO) at Public Service Division.
      4. PSO works with organisations and the four functional committees to promote PS21 through projects, events and publications such as the monthly PS21 newsletter "Challenge" and the PS21 Intranet Website.