Update on Reach and Effectiveness of Inclusive Growth Programme

Ms Sylvia Lim asked the Deputy Prime Minister and Minister for Manpower given that only 28 of more than 900 cleaning companies have tapped into the Inclusive Growth Programme (IGP) in the last two years (a) what is the Ministry's target number of cleaning companies tapping into IGP by 2015; (b) how much funds have the 28 cleaning companies received under IGP; (c) what average percentage wage increase did the IGP-aided 600 cleaners receive and what is their average wage after the wage increase; and (d) what number and percentage of all 69,000 cleaners and of the IGP-aided 600 cleaners are senior citizens aged 60 years and above.

Mr Tharman Shanmugaratnam: The Inclusive Growth Programme (IGP) was introduced in August 2010 by the National Trades Union Congress (NTUC) to drive productivity improvements in low-wage sectors, such as cleaning. The IGP complements the NTUC's Best Sourcing Initiative to encourage buyers to outsource functions, such as cleaning, to providers with good employment practices, rather than those offering the lowest price. In May 2012, the Government increased its funding for the IGP to $100 million. As a condition of funding, companies have to share the resulting productivity gains with workers through higher wages.

Through the IGP and BSI, NTUC targets to help 100,000 low-wage workers by 2015. For the cleaning sector, the NTUC has announced that the immediate target is to help move 10,000 cleaners up the wage ladder through the progressive wage approach. NTUC will focus on helping cleaners to reach a series of wage milestones, for example, $1,000, $1,200, $1,500 and beyond.

To date, 28 cleaning companies have received a total of about $500,000 in funding under IGP. When these IGP projects are fully implemented, the resulting productivity gains will enable 630 cleaners to attain an average wage increase of 11% and an average monthly wage exceeding $1,000. The BSI has also helped 1,200 cleaners to attain an average wage increase of 6%.

In addition, there would be a multiplier effect as the insights gained through these projects can be shared and implemented across the sector. This will enable more cleaners in other companies to benefit from productivity improvements and wage increases, thereby stretching the value of each dollar that is spent on IGP.

The age profile of the workers who have benefited from IGP is not tracked since the programme is not intended to target specific age groups. Of the 50,000 or so resident cleaners in Singapore, almost half (47.2%) are aged 60 years and above. 7

Apart from the IGP which operates at the company level, the National Environment Agency is also developing a roadmap to raise productivity and standards across the cleaning sector. Initiatives include the development of industry standards for measuring cleaning performance and productivity, the promotion of technology and innovation, and the building up of manpower and training resources.

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To complement the IGP and other productivity-centric efforts, the Government recognises that other measures also have to be put in place to ensure that training and productivity improvements translate into improved wages for cleaners.

Cleaning services are commonly outsourced and subject to the problem of cheap sourcing, where buyers award contracts mainly based on price. As a result, service providers bid aggressively low to win contracts, and cut costs by reducing benefits and lowering wages.

The Ministry of Manpower and its tripartite partners have adopted best sourcing as an approach to tackle the problem of cheap sourcing. The Tripartite Advisory on Best Sourcing Practices was released in January 2012 to encourage buyers to outsource responsibly and adopt best practices when doing so. A step-by-step guidebook was released at the same time to provide buyers with practical guidance on the implementation of best sourcing. Companies who need funding assistance can apply for the BSI that is administered by the NTUC.

The Government will also be strengthening the Clean Mark accreditation scheme which was introduced in 2010 to professionalise the cleaning industry. The enhanced scheme will include a requirement for cleaners employed in accredited companies to receive appropriate wages, commensurate with the training and higher standards, skills and productivity expected of accredited companies.

To lend support, the Government will be taking the lead by engaging only accredited cleaning companies. In addition, the Ministry of Environment and Water Resources is considering a Bill to license cleaning companies. This will raise the overall standards across the cleaning industry. More details will be announced later.