Future-Proofing Skills Future – Speech by Jamus Lim on the SkillsFuture Singapore Agency and Skills Development Levy Bills

Mr Speaker, the two associated bills to amend the SkillsFuture Singapore (SSG) Agency and Skills Development Levy Acts are sensible efforts to improve regulatory oversight over SSG grantees and training providers, while simultaneously strengthening investigative powers available to the agency. As someone that had previously sought clarification on lapses identified by the Auditor-General’s Office (AGO) for SkillsFuture grants, I support the revisions embedded in these two acts that aim to plug gaps in the framework.

I support both Bills. My comments today will first focus on offering some constructive critique on the stipulations in the respective Bills, including the benefits but also what I regard as minor shortcomings that remain. I will then move on to ask a meta-question, whether the proposed regulatory enhancements alone are sufficient to ensure that SSG is able to identify and ensure that the training providers for our workers are the very best available.

Benefits of tighter regulation

The proposed measures that lend greater agency to SSG to investigate potential abuses of SSG grants, and additional authority to pursue external providers that engage in fraudulent or predatory practices. Clause 12 of the Bill embodies a type of clawback provision, beyond fines, per se. This distinction is important, because channeling recovered moneys toward funding operational costs—which I believe Clause 9 allows—may strike one as a pragmatic way to finance the agency tasked with oversight.

But there is one downside from such an approach, which I hope SSG will guard against. Tying enforcement actions to funding can give rise to perverse incentives toward zealous overregulation and possible abuse by state authorities. This has been the case with asset seizure and civil forfeiture laws in the United States, which—in the most egregious cases—have given rise to predatory police misbehavior,[1] excessive punishments,[2] and the erosion of due process.[3]

Extent of potential abuse of SkillsFuture grants

In August last year, I—along with others—had filed queries based on the AGO report about how identified overpayments would be recovered. Minister Chan’s written response at the time was that “lapses… were primarily due to wrong declarations by the grant applicants and errors in manual processing of grants”.[4] This conveys the notion that there had not been much gaming of the system, and that most disbursements were simply due to idiosyncratic human error.

In an oral response to other members of this House, including my Workers’ Party colleague Sylvia Lim, Ms Gan went on to elaborate that the bulk of these errors had occurred “prior to November 2020, when SSG’s previous IT system… had used a declaration-based approach”.[5]

To provide yet more context, the AGO report itself had estimated overpayments of around $4.2 million, over the course of 3 years.[6] This is a comparatively small fraction of the between $670 to $870 million provided for the agency in the budget.[7] This is contrasted against reported cases of attempted fraud, which in once instance amounted to $40 million over 14 years.[8]

Taken together, one is left wondering if SSG misappropriations are the result of genuine errors, are relatively small, and probably a matter of the past. While no amount of misappropriation of public monies should be deemed acceptable, one is naturally led to wonder if the Ministry currently regards the sort of abuse that the bill seeks to address as a chronic and worrisome issue, or if the safeguards introduced are more due to an abundance of caution.

Relatedly, may I ask the Ministry to elaborate on how it currently tracks such abuses? By this, I mean how SSG goes beyond internal and external audits of grant disbursements, per se,to how it goes about evaluating whether programs proposed by training providers meet not just their stated objectives but contribute toward genuine, economically-valuable skills acquisition, and how subpar performance is assessed.

For example, the new Sections 57E and F introduced by the bill allow the policing of false or misleading advertising. But what if there is collusion between a given provider and trainee(s), where the provider receives the funds, shares the proceeds with the trainee(s), and skips delivery of the training? What if the courses offered appear to be associated more with consumption—home decoration or flower arrangement or wine tasting— rather than evidently future-relevant skills, which presumably is the purpose of the agency?[9] I will return to this second concern later in my speech.

Skills Development Levies as income

Clause 2 of the proposed amendments to the Skills Development Levy (SDL) Act will align the definition of “remuneration” in Section 2 of the Act with that of “wages” defined in Section 2(1) of the CPF Act. The Ministry assures us that, in practice, employers are likely already doing so.[10]

The concern here is that, were this realignment in place, such wages then go on to become part of the earned income for SkillsFuture recipients. More specifically, I am concerned if the changes proposed by Clause 2 will be limited to just the manner by which employers file SDL, or will the SDL amounts also be included into total compensation for employees?

If so, I can imagine how doing so may result in the unintended consequence of discouraging the usage of SkillsFuture credits. Many government subsidy programs are pegged to total compensation, and if SkillsFuture credits become recognized as another component of this mix, then workers may intentionally choose to forgo taking on training, to ensure that they fall below an income threshold that qualifies them for a higher tier of subsidy.

For example, I recently appealed for a resident who—having received IT device allowances to assist with the transition to work-from-home arrangements—found herself inadvertently (and unwillingly) bumped into a higher income threshold, and thereby qualifying for lower subsidies, as a result. The last thing we would want is for SkillsFuture—which is a valuable investment in one’s human capital—to become perceived as an undesirable component of total income.

Reshaping the landscape for SkillsFuture providers

In principle, the idea of allowing external training providers for SkillsFuture—rather than limiting it to a small set of in-house expertise—allows trainees to access a wider set of options for their SkillsFuture needs. Providers, in turn, could focus on course content and delivery, rather than be pressed with identifying and locating students. This specialization can therefore improve the overall efficiency of the SkillsFuture ecosystem.

However, for the system to operate well, it is key that courses are adapted to the needs of both the future economy, as well as those of firms seeking skilled workers. To best calibrate courses with the demand side—and hence mitigate the risk I mentioned earlier, that courses become more a form of consumption rather than investment—the Ministry has stated that it will eliminate funding for most noncertifiable courses that are less relevant to industry,[11] beginning in 2025.

Presumably, this means that SSG will have done its homework in being in conversation with employers, to ensure that certified courses and competencies do indeed match the needs of industry. Minister Chan has stated in the past that SSG will make efforts to encourage the development of skills in future-oriented sectors, such as the green, care, and digital economies. I agree with this forward-looking approach. I would only add that the agency should not apply a blanket ban, but consider the context. While my suggestion was that flower arrangement or wine tasting could be regarded as forms of consumption, they could well become spinoffs into viable businesses. We do not wish to stamp out the entrepreneurial spirits that could launch the next Edible Arrangements or Coravin.

But at the same time, we should not neglect the supply side. It is essential that the pool of external providers is kept as large as possible, even as the set of courses eligible for funding narrow. Hence, while it is crucial to ensure that trainers are indeed qualified to deliver the courses they offer, accreditation as a SkillsFuture provider should not conversely become too onerous, so as not to discourage otherwise legitimate trainers and courses from becoming part of that pool.

Unfortunately, that has not been my impression of the manner by which SkillsFuture currently recognizes training providers.

One example is how difficult it is for individual educators to qualify to become an approved training provider (as members of this House are aware, I am myself an educator, working at a private tertiary educational institution in Singapore). Training professionals are required to secure an Advanced Certificate in Learning and Performance (ACLP). The original ACLP program required almost 130 hours, while the 2.0 version still requires about 89 hours. The fee is a nontrivial $5,940, although I happily note that SSG is internally consistent, and provides Singaporeans and PR with generous subsidies, including 90 percent funding for midcareer Singaporeans.

Even so, asking experienced educators—such as university professors or tertiary education instructors—to go through additional pedagogical training is a severe impediment to their involvement, not least given the extensive demands on the time of such professionals, who already juggle a slate of existing teaching, research, and service commitments. The last thing we wish to do is to burden them with “busy work,” which would diminish their incentives to participate as a training provider. But also, for a moment, imagine asking an academic from one of our world-class universities—who may be one of a few subject-matter experts in the world—to sit through months of classes, just so that they may have the privilege of offering education to our continuing education students.

In response to a Parliamentary Question I filed about this approach, Minister Chan indicated that “adults with prior relevant experience can seek credit exemption… if they have comparable TAE qualifications and can provide evidence of relevant practice and experience.”[12] But such exemptions tend to be based on other comparable adult education qualifications, and there is little indication on the Institute of Adult Learning site that experience alone—coupled with domain-specific expertise, which tends to be the case for many university professors—would be sufficient. Moreover, the revised ACLP 2.0 does not seem to offer any credit exemptions,[13] perhaps due to its novelty and already-truncated nature.

University educators aren’t the only ones constrained by the current setup. The scheme that allows for in-house training providers was wound down in October 2022, and in-house training will no longer be available from 2025 onward.[14] I understand that only 10 percent of SSG-funded courses were performed in-house. Was the scheme cancelled due to perceived lack of interest? If so, it would strike me strange to wind down funding for in-house training based on this statistic—rather than seeking to further promote takeup—because there is evidence that such training can be particularly effective.[15]

Finally, skilled practitioners may also receive short shrift as a SkillsFuture training providers. Member Raj Thomas had asked in this House about how apprenticeships would be accredited, and Minister Chan’s response was that the “Workforce Skills Qualification (WSQ) Framework includes an Assessment-Only Pathway (AOP)… [and] is available across more than 500 courses”.[16] This is wonderful, but it remains unclear the extent to which the WSQ AOP is being utilized. Would the Minister be willing to share with the House how many skilled practitioners have already been qualified under this pathway, and if the AOP is being envisioned as the basis for a more fully-fledged national apprenticeship program?

In addition, the assessment of the WSQ competency standards still comes across as extremely academic (I am aware of the irony of this observation, coming from an actual academic). After all, while ensuring minimum standards are surely necessary, do we want journeymen and master skillsmen to subject themselves to curriculum design and development, or painstakingly document pedagogical objectives for each lesson, rather than actually going about teaching the craft? Are we subjecting them to knowledge assessment questions that test whether they are able to recall what “three types of food contaminants” are, or if they can “list four unhygienic personal habits”,[17] to the detriment of chefs who genuinely possess the creativity and skills to helm Michelin-starred restaurants?

The entire purpose of an apprenticeship scheme is to allow those who are less likely to excel in acquiring paper qualifications to demonstrate their abilities by doing, rather than knowing. Hence, while there is certainly some value in having such pedagogical tools—continuity after staff turnover, ensuring coverage of critical concepts—but I would go so far as to argue that these should be defined only at a very high level, and not preoccupy the time of the teachers.

Concluding thoughts

While these Bills have been focused on the supply side, we do also need to pay attention to fostering demand. This is the topic of another speech, but one common feedback we often hear is how we can reduce the opportunity costs of individuals who are concurrently working—rather than those who have recently separated from a job—so that they also receive incentives to pursue such upgrading. What are the agency’s plans to strengthen incentives for existing employers to encourage SkillsFuture credit use, if it is revealed that their employees are underutilizing them?

Mr Speaker, if we truly want to build a future-proofed workforce, we need to ensure that the training we are providing them are built for purpose. These bills before the House today take important, common-sense steps to improve the functioning of the system, and for that reason, they have my support. But I am hopeful that even as we tighten the regulatory constraints to eliminate fraud and abuse of the system, we will also explore ways to reduce the hurdle rate placed on legitimate training providers, to ensure that the skills imparted on trainees are indeed the best available ones for the future.

Delivered in Parliament on 9 January 2023

[1] O’Harrow Jr., R., S. Rich & S. Tan (2014), “Asset Seizures Fuel Police Spending,” Washington Post, Oct 11.

[2] Greenhouse, L., (1996), “Justices Uphold Civil Forfeiture as Anti-Drug Tool,” New York Times, Jun 25.

[3] Mellor, C. (2011), “Civil Forfeiture Laws And The Continued Assault On Private Property,” Forbes, Jun 8.

[4] Hansard (2022) 95(66): Aug 2.

[5] Hansard (2022 95(65): Aug 1.

[6] AGO (2022), Report of the Auditor-General for the Financial Year 2021/22, Singapore: Auditor General’s Office.

[7] Based on more recent FY2021 and FY2022 provisions for Head K (Ministry of Education) under the program.

[8] Chia, O. (2022), “Chief Money Mule Jailed 14 Years Over $40 Million SkillsFuture Scam,” Straits Times, Jul 15.

[9] One may argue that such consumption-oriented training falls within the goals of SkillsFuture, but if so, it does not appear to fall within its stated mandate. The MoM does declare that the purpose of the program is to help Singaporeans “develop their fullest potential,” but this is set against the context of “skills relevant to the future” to “drive Singapore’s next phase of development.” See: https://www.mom.gov.sg/employment-practices/skills-training-and-development/skillsfuture.

[10] MOE (2022), Public Consultation on the SkillsFuture Singapore Agency (“SSG”) and Skills Development Levy (“SDL”) (Amendment) Bill 2022–Table of Proposed Policies, Singapore: Ministry of Education.

[11] Ng, W.K. (2022), “SkillsFuture Funding Framework to Focus on Courses Relevant to Industry,” Straits Times, Jul 5.

[12] Hansard (2022) 95(77): Nov 29.

[13] The FAQ on the site states that “[t]here are no credit exemptions for ACLP 2.0,” and encourages those seeking credit exemptions to do so with the original ACLP (which will only be offered till September 2023). See https://www.ial.edu.sg/full-qualifications/wsq-advanced-certificate-in-learning-and-performance-2/#faq.

[14] Training Partners Gateway (2022), “Winding Down of Funding for In-House Training,” SSG Circular/PPD/2022/10, Singapore: SkillsFuture Singapore Agency.

[15] Garrubba, M., C. Waller & C. Harris (2011), “A Competency-Based In-House Training Program for Resource Staff in an EBP Hospital Support Unit,” International Journal of Evidence-Based Healthcare 9(3): 293–4; Kumar, K., S.K. Singh & G. Kumar (2017), “Effectiveness of In-House Training on Technical Employees in Biotech Industry,” Journal of Technical Education and Training 9(1): 113–25; Meister, J. (1998), “Ten Steps to Creating a Corporate University,” Training and Development 52(11): 1–38.

[16] Hansard (2022) 95(62): May 9.

[17] WSG (2019), Interpretation of WAQ Competency Standards for Training and Assessment, Singapore: Singapore Workforce Development Agency.