Parliamentary committee report urges Govt to rethink spending given cost of stockpiling amid supply chain disruptions

SINGAPORE — A parliamentary committee has flagged the need for the Government to "rethink baseline spending" given the financial strain of building up buffers and stockpiles of essential items as a result of supply chain disruptions brought about by Covid-19.

The report by the Public Accounts Committee, which was released Wednesday (Jan 26), also urged the Government to rethink the need, design and timing of major infrastructure projects — a point the current committee made in its first report last year.

The committee, which examines the accounts of the Government for public expenditure, is chaired by Ms Foo Mee Har, Member of Parliament (MP) for West Coast Group Representation Constituency (GRC), and includes six other members from the ruling People’s Action Party. It also includes Mr Louis Chua, who is Workers’ Party MP for Sengkang GRC.

The latest report, which is typically released yearly, is based on four committee meetings and testimonies from senior government officials from the Ministry of Finance (MOF) and the Public Service Division (PSD).

The 40-page report discusses issues that could affect spending, financial governance and controls in the public sector.

Among other issues raised, the committee called on the Government to think about how hybrid work arrangements, which is becoming a permanent feature in the public sector workforce, will affect cybersecurity.

SUPPLY CHAIN DISRUPTION

The committee noted that disruptions to global supply chains arising from Covid-19 and other risk factors would require the Government to shift from a “just in time” operating model — where products are brought in based on demand — to a “just in case” model where there are stockpiles in place to cope with sudden surges in demand.

However, a shift in the operating model will require a “rethink” of government baseline spending as it will strain government financial resources, the committee said.

It noted in its report that MOF had said that it had strengthened the resilience of Singapore’s essential goods, such as food, against future disruptions.

The ministry is also ensuring that the country's key manufacturing and trading sectors have resilient supply chains.

However, MOF informed the committee that some measures, such as stockpiling, could add to recurrent costs in the medium and longer term.

To address this, the ministry is developing policy and resourcing principles to guide its assessment of resilience-related measures such that government spending remains sustainable.

For example, MOF is encouraging public agencies to use both fiscal and non-fiscal measures such as stockpiling schemes to enhance supply chain resilience. 

In response to the committee’s view on the need to re-evaluate baseline spending, which would include increasing expenditure in some sectors and reducing spending in others, MOF said that it is working with agencies to review the impact of Covid-19 on their plans.

A number of “resets” in the allocation of resources may need to be done, such is in the area of public health, it added.

RETHINKING MAJOR INFRASTRUCTURE PROJECTS

The committee said in its report that it would be useful to “re-think the need, design and timing” of key government infrastructure projects as Singapore moves towards becoming a Covid-resilient nation.

MOF had informed the committee that it would preserve a flexible approach to infrastructure projects that are more likely to see dampened demand or would be significantly delayed.

For example, the Government announced in June 2020 that the construction of Changi Airport Terminal 5 would be paused for at least two years until there was more clarity on the future of air travel.

The ministry informed the committee that it would continue to plan ahead for infrastructure projects, even as it adjusts the timeline of such projects to accommodate the uncertainty brought about by the pandemic.

In response to the committee’s questions on how hybrid work arrangements could have an impact on government spending, MOF noted that the land and space taken up for government premises could be reduced as more services by public agencies become virtual or hybrid, and more agencies adopt hybrid working arrangements.

However, the reduction in space had to be balanced with the cost to unwind infrastructure changes and the potential impact on organisational culture, workers' morale and a sense of belonging, the ministry told the committee.

MOF said that it would continue to work with agencies to rationalise and optimise office space take-up.

HYBRID WORK ARRANGEMENTS

The committee noted that working-from-home and hybrid working arrangements are likely to become a permanent feature of the public sector workforce, and asked PSD about the potential impact that these arrangements could have on governance, controls, oversight and accountability.

On this, the PSD highlighted cybersecurity as an issue that had become more important since a significant proportion of public officers have been accessing government services via their unsecured home wireless network, increasing the risk of data leaks.

Similarly, poor security practices when using video-conferencing software while telecommuting could further increase the risk of data leaks, PSD added. 

The agency noted the efforts taken by the Government to address risks arising from workers telecommuting. 

For example, the Government Technology Agency had published a set of best practices for public officers on how to secure their home networks and how to use video-conferencing tools securely.

All agencies also have an agency chief information security officer and chief data officer to oversee and take charge of cybersecurity and data security matters.