- TEN BEST PRACTICES IN THE SINGAPORE CIVIL SERVICE
- The 10 best practices are:
- Early 1970s-Efficiency and Effectiveness Reviews and the Setting up of
the Management Services Department (MSD);
- Mid 1970s-Planned Reviews of Ministries by MSD;
- Late 1970s-Computerisation and Setting up of the National Computer
- Mid 1980s-Performance Budgeting; and Late 1980s-Performance Indicators
Published in the Budget Book;
- Mid 1980s-Management Accounting and Activity-based Costing;
- 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;
- 1990s-Corporatisation/privatisation and Establishment of Statutory
- Running state-owned enterprises purely on a commercial basis; and
- Mid 1990s-PS 21 (Public Service for the 21st Century).
- 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.
- 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.
- Early 1970s- Efficiency and Effectiveness Reviews and the Setting up of
the Management Services Department (MSD)
- 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.
- 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.
- 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.
- It was responsible for introducing the following to the Civil Service:
- WITS (Work Improvement Teams);
- Performance Budgeting;
- Management Accounting Systems (activity based costing);
- Corporatisation/privatisation and Establishment of Statutory Boards; and
- Planned Reviews; and
- Computerisation/mechanisation, including recommending the establishment
of the National Computer Board.
- MSD also provided lecturers to lecture part-time on management topics
at the then Civil Service Institute (now Institute of Public
- 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.
- Mid 1970s-Planned Reviews of Ministries by MSD
- This covered:
- Review of mission objectives, functions and performance indicators;
- Review of development plans, including the implementation of those
- Determination of the organisational structure and manpower requirements
to support the achievement of the objectives and functions;
- Identification of areas for privatisation, corporatisation and
contracting out; and
- Review of systems and procedures and recommending areas for
- Each ministry and its departments would be reviewed once every 5 years
and the results presented to its Permanent Secretary and Minister.
- 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.
- Late 1970s-Computerisation and Setting up of the National Computer Board
- 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
- 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.
- Mid 1980s-Performance Budgeting
- 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.
- Examples of funding are:
- Education-cost per student trained;
- Tax-cost per $ tax collected; and
- Health-cost per patient day in hospital.
- 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.
- 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
- Late 1980s-Performance Indicators Published in the Budget Book
- 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.
- Some of the indicators are:
- Cost per km of road swept per year;
- Cost of incineration per tonne;
- Management cost per hawker stall managed per month;
- Cost per cubic metre of sewage treated; and
- Cost per $1000 of revenue collected.
1990s-Corporatisation/privatisation and Establishment of Statutory
- Mid 1980s-Management Accounting and Activity-based Costing
- 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.
- MAS and performance budgeting enables the delegation of authority to use
block votes because there is now a performance measure and an
- 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.
- 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
- 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.
- 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.
Core Government Functions
- 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
- 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.
- The ENV has corporatised its refuse-collection arm and it has to compete
with private-sector companies for government contracts.
- 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.
- 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.
- 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.
- Public housing is under the Housing and Development Board, a statutory
- Some independent schools have been established under the Ministry of
Education e.g. Raffles Institution and the Anglo Chinese School.
- 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.
Running State-Owned Enterprises Purely on a Commercial Basis
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.
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.
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
Mid 1990s-PS 21 (Public Service for the 21st Century)
In May 1995, the Permanent Secretaries decided to mount a deliberate
exercise called "Public Service for the 21st Century"
or PS21 for short.
The PS21 has two basic objectives:
- To nurture an attitude of service excellence in meeting the needs of the
public with high standards of quality, courtesy and responsiveness.
- To foster an environment which induces and welcomes continuous change
for greater efficiency and effectiveness by employing modern management
tools and techniques while paying attention to morale and welfare of
- 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.
- To ensure interest in PS21, several Committees were established - The
Central Steering Committee, the PS21 Functional Committees, The
Organisations’ PS21 Committees, PS21 Office.
- 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:
- At the individual level, a personal commitment to excellence in public
service and teamwork; and
- At the organisation level, a willingness to reform and make fundamental
changes in order to anticipate developments in the domestic and
- 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.
- 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.
- PS21 Office – Making known the efforts of Ministries, Organs of
State and Statutory Boards is the task of the PS21 Office (PSO) at Public
- 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