Economy Drive saves the Government $602m in FY05

Public agencies have actively participated in the Economy Drive (ED) movement, achieving savings of $602 million in FY05 (i.e. from 1 April 2005 to 31 March 2006). This represents 1.94% of the agencies' total cash budget. The ED savings are on top of the 3% budget cut on all Ministries except Mindef for FY05.

2. The results are encouraging given that public agencies are already operating on a trimmer budget due to past ED efforts since the launch of ED in May 2003, and the budget cuts in FY05. The Economy Drive savings achieved in FY03 and FY04 were $687m (2.2% of the public agencies' FY03 cash budget) and $736m (2.3% of agencies' FY04 cash budget) respectively.

Economy Drive efforts

3. The central ED message for FY05 is "Simplify, Standardise, Synergise". Public officers, across agencies and at different levels, help achieve FY05's savings through mindset changes about work practices, leading to innovative and cost-saving measures such as replacing proprietary software with open-source software, co-locating offices to save space and rationalising the size of vehicle fleets.

4. Agencies also participated in service-wide demand aggregation for common goods and services, and engaged in the best sourcing of non-core functions. In FY05, agencies saved $16 million from buying off service-wide bulk contracts, and $25 million from outsourcing functions such as car park enforcement, data centre operations and transcription services. Details of some ED efforts of public officers are at Annex A.

Public Feedback to Cut Waste Panel

5. The Cut Waste Panel (CWP), which is chaired by Head (Civil Service) and has members from the private and people sectors, complements the self-initiated ED, by receiving suggestions from the public. Since the launch of the CWP in September 2003, as of 15 May 2006, the CWP has received 3,108 suggestions on cutting waste in the public sector. The public agencies agreed with the majority (i.e. 84%) of the cut-waste suggestions. The remaining 490 or 16% suggestions were found not suitable for implementation.

6. Of the 2618 suggestions that the public agencies agreed with, 2521 suggestions were already implemented by the agencies, or the concerns raised had been addressed in some other way. The remaining 97 suggestions were new suggestions that were or will be implemented by the agencies. The cumulative cost savings arising from these new implemented suggestions is about $11.4 million to date, comprising one-off savings of $8.7m and recurrent annual savings of $2.7m.

7. One such new suggestion received during the last 5 months that resulted in savings was to convert several unused motorcycle parking lots in Toa Payoh to car parking lots. This will save the Housing and Development Board (HDB) $1,975 per annum. Details of the public suggestions received by the CWP can be found at www.cutwaste.gov.sg

8. Co-Chairperson of the Economy Drive Committee, Mr Tan Tee How, Permanent Secretary for the Ministry of National Development, was heartened by the progress of the ED movement in FY05. He commented: "ED in FY05 is harder given that most of the lower-hanging fruits have been reaped in earlier years of ED. Nonetheless, public officers achieved significant savings despite having smaller budgets to begin with. The slew of bottom-up ED initiatives demonstrates an increased awareness of the need for fiscal prudence in the public sector, even at the working level. This augurs well for the continued growth of the ED movement throughout our public sector."

MINISTRY OF FINANCE