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Results-Based Management The Singapore MOF Perspective Ravi Menon Deputy Secretary Ministry of Finance The “animal school” Do the Right Things Do Things Right Measure the Right Things; Measure Things Right Do the Right Things The trilemma in public policy Striking a balance Do Things Right Measure the Right Things; Measure Things Right A tightening fiscal position WOG Balanced Scorecard The world is changing Thinking Blue Ocean The trilemma in public policy “The political problem of mankind is to combine three things: Economic Efficiency, Social Justice, and Individual Liberty.” John Maynard Keynes Essays in Persuasion, 1931 Striking a balance Opportunity Globalised economy Open to talent Free competition Stable environment Strong families Safe streets National Identity Social Equity Inclusive Society Security Community A tightening fiscal position 25 Total Revenue 20 15 Total Expenditure % GDP 10 Budget Balance 5 0 -5 -10 FY86 FY88 FY90 FY92 FY94 FY96 FY98 FY00 FY02 FY04 FY06 (Bud) Whole-of-Government Balanced Score-Card The world is changing Factor Driven Economy Productivity Driven Economy Knowledge Driven Economy Creativity Driven Economy (1960-1970) (1970-1990) (1990-2000) (2000 onwards) Resources Efficiency Information Innovation Thinking Blue Ocean Compete in existing market space Create new market space Compete for customers Seek “non-customers” Compete on cost Compete on value Do the Right Things Evolution of Budgeting System Budget Management Framework Do Things Right Establish limits Maximize discretion Measure the Right Things; Measure Things Right Measure costs Manage for excellence Public Service 21 Evolution of Singapore’s Budgeting System • Line-item budgeting (until 1978) • Block vote budgeting (1990 onwards) • Budget Management Framework (2000) • Programme budgeting (1978 onwards) • Budgeting for Results (1996 onwards) • Resource Management (2003) 1970s/1980s 1990s 2000 Control & Discipline Performance & Results Flexibility & Economy Budget Management Framework Desired Outcomes Secure Singapore Responsible Government •Long-term fiscal sustainability •Efficient & effective public service Principles, Policies & Processes Establish limits Block Budget Caps Reinvestment Fund Budget Utilisation Framework Maximise discretion 3-yr Development Block Vote system Net Budgeting Framework Monitoring & Evaluation Budget Flexibility Frameworks Manage for excellence Best Sourcing Resource Accounting Resource Budgeting DPC process Cost norms for government buildings Measure costs Net Economic Value Interdepartmental charging framework PPP Demand Aggregation/ Reverse Auctions Economy Drive Manpower Management Debt-equity & capital restructuring for SBs Annual Strategic Reviews Sectoral Budget Meetings Budget Review Meetings (Are we doing the right things?) (Are we collaborating across ministries?) (Are we doing things right?) Establish limits Block Budget Caps Ministry budget set as a percentage of ‘smoothened’ GDP on multi-year basis Reinvestment Fund Reinvestment ‘dividends’ extracted from Ministries and pooled, from which Ministries can bid for new, innovative, and worthy programmes Budget Utilisation Framework Budget adjusted downwards to reflect real needs if utilisation is less than 95% of allocated budget Maximize discretion Total Block System Ministries free to spend and prioritize within their pre-determined block budgets Budget Flexibilities Ministries can ●take Advances from future years’ budget ●make Rollover of savings in current year to following year ●accumulate and Carry-Forward unused funds for up to 3 years Net Budgeting Ministries given extra funding for new services if they can recover extra costs through fees and charges Measure costs Resource Accounts To assign resources based on full cost of services Resource Budget Efficient management of resources Application of accrual accounting concepts to reflect the full cost of operations Measures how well resources are utilised by the organisation NEV Manage for excellence Best-Sourcing Market-test all non-core Government functions to select the service provider who offers best value for money Public-Private Partnerships Enter long-term partnership arrangement with private sector to provide services, moving away from directly owning and operating assets Economy Drive Encourage and reward agencies to look for savings in day-to-day operations Public Service 21 Execute Change Anticipate Change Welcome Change Be in Time for the Future “Continuous Change” Do the Right Things Do Things Right Einstein on KPIs Ministry Report Cards Measure the Right Things; Measure Things Right KPIs and Benchmarks From BSC to Workplans Everything that can be counted does not count; everything that counts cannot be counted. Ministry Report Card Key Performance Indicators From BSC to Workplan Example of how strategies & targets are deployed at the Directorate level Balanced Budget Questions?