SINGAPORE: A government-wide push to get civil servants to be more revenue and cost conscious has fizzled out after about a decade.
Today has learnt that the Net Economic Value (NEV) framework, which was gradually implemented among ministries and statutory boards since 2000, has been scrapped.
Under the framework,
which is equivalent to the private sector's Economic Value Added
accounting, the public agencies were encouraged to raise annually their
NEV, which is defined as the revenue minus the operating and capital
costs.
Senior civil servants told Today that while the framework
discourages overspending, there was concern that the emphasis on
revenue and cost would compromise the delivery of public services.
One
of them, who works in a statutory board, noted that the NEV framework
may skew spending on public infrastructure, for instance, to become
"overly conservative", even if it tends to help control costs and
discourage overspending on items such as office equipment and manpower.
"Watching
financials is a good thing, but if it is overzealous, it can swing the
other way - causing under-spending which in turn may lead to the public
good not being achieved," the civil servant said.
Another civil
servant noted that the NEV framework may have been unsuitable for
certain ministries, such as the Ministry of Community Development, Youth
and Sports (MCYS). He said: "Say, you hire another 10 probation
officers and you rehabilitate the delinquents, how do you measure the
value to that?"
According to the Ministry of Finance (MOF), the
head agency which implemented the NEV framework, it was dropped in the
2011 Financial Year.
An MOF spokesman said: "We have since
evolved our approach in recognising that the effectiveness of the public
sector is not just about financial/economic value but the
whole-of-government outcomes that it delivers to the public."
Nevertheless,
the spokesman noted that the use of NEV accounting incentivised public
agencies to improve on how well they utilise their available resources
or assets, and has resulted in "several improvements", for instance the
better utilisation of land leading to parcels freed up for other uses.
MOF
said that public agencies are now instead asked to monitor outcomes
from services that are delivered to the public, and adopt various
initiatives that enhance efficiency and optimise resources, such as the
Manpower Management and Office Space Management frameworks.
Looking long term
Pointing
out that a weakness of the NEV framework is its narrow and short-term
focus, Chua Chu Kang GRC Member of Parliament Zaqy Mohamad, who sits on
the Government Parliamentary Committee for Finance and Trade and
Industry, felt that scrapping the NEV framework sends a signal to the
civil service to be "more holistic in the way they work … (and) gives
the government the flexibility to do longer range projects", such as
growing Singapore's native population.
Singapore Management
University finance professor Annie Koh pointed out the difficulty in
measuring outcomes using the NEV approach, especially in today's "highly
uncertain climate".
The NEV framework might also lead to silos and non-collaboration between different agencies, she said.
Citing
how civil servants worked across ministries and agencies to craft the
Jobs Credit scheme during the financial crisis between 2008 and 2009,
Prof Koh added: "If everything has to be justified by NEV measures, we
will not have been able to ride out that stormy period quite so
successfully."
National University of Singapore corporate
governance expert Mak Yuen Teen pointed out that an improved NEV for an
agency does not necessarily lead to higher efficiency.
"If there
are no checks and balances, it is very easy for the public sector to
increase revenue even if costs increase, whereas in the private sector,
that would not be so easy because of competition," said the associate
professor.
Nevertheless, the experts noted that the NEV concept could still serve a purpose in some areas.
For
instance, Prof Mak agreed that NEV incentivised more efficient use of
land. "If you don't have NEV - you have land and you are not charged for
it, you can just sit on it and nobody uses it. But on the other hand,
you also worry that they will just increase revenue by charging people
even more," he said.
Prof Koh cited the determining of investment
proposals: "If a hospital is trying to decide whether to invest in a
specific new equipment - then measuring if economic value will be
created in buying such a piece of equipment is fairly defined."
NEV or not, a senior civil servant working in a ministry reiterated that he and his colleagues "think beyond monetary value".
He
said: "Sometimes returns are not immediate, it may be about long-term
change in behaviour ... sometimes you have to pump in a lot of resources
for a little bit of gain, but the gain means a lot to the people you
are serving, I would like to think that all civil servants behave that
way."
- TODAY