FINANCE COMMITTEE

Minutes of the proceedings of the Meeting held on
10 May 1996 at 2:30 p.m. in the Legislative Council Chamber

Members Present :

Members Absent :

Public Officers Attending :

Ms Olivia NIP	Principal Assistant Secretary for Education and Manpower (6)
Mr H F LEE	Assistant Director of Education (Planning and Research)
Mr Matthew CHEUNG, JP	Deputy Secretary for Education and Manpower
Mr Raymond FAN	Principal Assistant Secretary for Education and Manpower (4)
Mrs Jennie CHOR	Assistant Commissioner for Labour
Mr CHOW Tung-shan, JP	Executive Director, Employees Retraining Board
Mr D W PESCOD	Principal Assistant Secretary for the Civil Service
Mr H S RUTTON	Assistant Commissioner of Correctional Services
Mr K Y LEUNG	Senior Superintendent of Correctional Services
Miss Annette LEE	Principal Assistant Secretary for Education and Manpower (2)
Mr S H HSU, MBE	Senior Assistant Director of Education
Mr Anthony TONG	Assistant Director of Education (Allocation and Support)
Mr P L KWAN	Project Director, Architectural Services Department
Mr D W WEBB	Principal Assistant Secretary for the Treasury
Mr Stephen MAK, JP	Director of Information Technology Services
Mr James FARQUHAR, JP	Assistant Director of Architectural Services

In Attendance :

Mr Alan LAI, JP	Secretary for the Treasury (Acting)
Mr Kevin HO, JP	Deputy Secretary for the Treasury (1)
Mrs Carrie LAM	Deputy Secretary for the Treasury (3)(Acting)
Mrs Lilian WONG	Principal Executive Officer (General), Finance Branch
Miss Pauline NG	Clerk to the Finance Committee
Mrs Constance LI	Chief Assistant Secretary (Finance Committee)
Mr Andy LAU	Senior Assistant Secretary (Finance Committee)

Item No. 1 - FCR(96-97)5

RECOMMENDATIONS OF THE ESTABLISHMENT SUBCOMMITTEE

The Committee approved this item.

Item No. 2 - FCR(96-97)6

RECOMMENDATIONS OF THE PUBLIC WORKS SUBCOMMITTEE ON NON-AIRPORT CORE PROGRAMME

2. The Committee approved this item.

Item No. 3 - FCR(96-97)10

HEAD 40 - EDUCATION DEPARTMENT
Subhead 326 Kindergarten Subsidy Scheme

3. Noting that about 90% of the kindergartens would be eligible for subsidy in the coming school year, a member asked whether it was cost-effective to incur some $3 million recurrent administrative expenses for screening out the remaining 10% of kindergartens from the Scheme. In response, the Assistant Director of Education (Planning and Research) (AD of E) advised that the administrative cost was to support a small dedicated team in the Education Department for the administration of the Kindergarten Subsidy Scheme, mainly to ascertain the eligibility and the amounts of subsidies payable to individual kindergartens. As the Scheme was to encourage kindergartens to employ trained teachers, the team inspected the kindergartens twice a year to ascertain that they had complied with the regulatory requirement that at least 40% of the teachers had acquired the necessary qualifications. The administrative costs, estimated at 5% of the total project costs, were considered reasonable and essential for the implementation of the Scheme. At the request of the member, AD of E agreed to provide further information about the administrative costs of the Scheme, and the financial implications if all kindergartens were automatically eligible for the subsidy.

4. In reply to a member, AD of E advised that as some eligible kindergartens might not apply for the subsidy, about 60% of the pupil population in the eligible kindergartens would benefit from the present Scheme.

5. The Committee approved this item.

Item No. 4 - FCR(96-97)7

HEAD 176 - SUBVENTIONS: MISCELLANEOUS
New Capital Account Subhead Grant to Employees Retraining Board

6. Members were generally in support of the proposal. They expressed concern, however, about the effectiveness of the retraining programmes in meeting the objective of helping the unemployed to rejoin the labour market. In response, the Executive Director, Employees Retraining Board (ED/ERB) advised that, based on the returns by the training centres and agencies, more than 70% of the trainees were able to find a job within three months after attending the full-time retraining programme. ED/ERB further advised that while employers could apply for reimbursement up to half of the wages during the first three to six months of employing the retrainees, few applications were actually received from employers. The success rate was therefore independent of the incentive payments to employers. In response to members concern about the absence of objective yardsticks in assessing the usefulness of the courses, ED/ERB explained that training bodies were required to report on the employment status of each and every retrainee attending a full time course three months after the completion of the course. This provided a mechanism to verify, as when necessary, the success rate reported by the training bodies. ED/ERB agreed to provide sample copies of the detailed report form for members reference. breakdown of the number of successful cases by courses and the number of employers who had applied for subsidies for employing retrainees. As for the retention rate of those who got employment after retraining, members noted that there was no available informationbe taken into consideration in the comprehensive review which would be completed this summer.. ED/ERB shared the concern and indicated that a small scale sample survey would be conducted later in the year.

7. As regards the target groups of trainees under the Scheme, ED/ERB advised that the Scheme originally only aimed at the unemployed, but later extended to cover also the underemployed workers in the declining industries who might lose their jobs. To ensure that the resources were directed to those who were genuinely in need of the retraining programme, applicants were now required to attend an interview for aptitude assessment; those unemployed and genuine job-seekers would be given priority. For equity reasons and to prevent abuses, applicants could only enroll in one full time course that lasts for a month or more during a period of two years, and no allowance was payable to trainees attending part-time and evening courses. In reply to a member, ED/ERB advised that the distribution of resources for full-time and part-time/evening courses was at present about 50:50, while the number of trainees attending part-time/evening courses was aboutwhich was 2.5 times the number of full-time trainees.

8. Regarding the nature and duration of training, ED/ERB advised that most employers and trainees preferred short courses targeted at the essential basic skills of the trade and techniques to find employment, considering that most employers would provide on-the-job training for the recruits. In this respect, members expressed concern that, given the short duration of these courses, it would be difficult to adequately equip the trainees with the skills required for the purpose of joining a different trade. In response, ED/ERB advised that the retraining programmes were geared to providing the basic essential skills to enable the trainee to rejoin the labour market, and the contents and duration of courses were subject to the scrutiny and advice of a Steering Committee comprising employers representatives and experts from the vocational training institutes. As regards members suggestions that courses on retailing service industries and high-technology should be included in the Scheme, the Deputy Secretary for Education and Manpower (DS/EM) advised that this would be considered in the context of the overall review on the future direction of the Employees Retraining Board.

9. On the problem of insufficient venue and facilities for training courses, ED/ERB advised that the Board was liaising with the Housing Department on suitable venue, and the training centres were also encouraged to identify leased premises. In reply to a member, he advised that the Board funded all expenses relating to training accommodation and facilities.

10. DS/EM also noted the suggestions from members regarding the longer-term financing arrangements for the Employees Retraining Board and the availability of training programmes to new immigrants. He advised that these issues would be addressed in the overall review of the retraining scheme.

11. The Committee approved this item.

Item No. 5 - FCR(96-97)9

HEAD 30 - CORRECTIONAL SERVICES DEPARTMENT
HEAD 122 - POLICE: ROYAL HONG KONG POLICE FORCE
Subhead 002 Allowances
HEAD 62 - HOUSING DEPARTMENT
Subhead 003 Recoverable salaries and allowances

12. Mrs Miriam LAU declared interest as the Chairman of the Standing Committee on Disciplined Services Salaries and Conditions of Service.

13. In response to members questions, the Principal Assistant Secretary for the Civil Service (PAS/CS) explained the rationale for linking the Remote Stations Allowance to the Management Considerations (MC) Allowance. He stressed that the MC Allowances were non-standard discretionary allowances to compensate hardship for a variety of reasons such as working in exceptional unpleasant or unfavourable environment. As regards whether it was the general job requirement for members of the disciplined services such as the Correctional Services Department (CSD) staff to work in remote institutions, PAS/CS clarified that most CSD officers did not consider that distant postings on outlying islands would form a major part of their job. As few officers would volunteer for distant postings, the departments considered that some form of allowance was necessary to compensate those officers working and living in remote location, and totheir family members living with them. In reply to members, the Senior Superintendent of Correctional Services explained that the payment had taken into account the physical and social hardship as well as the extra travelling costs incurred in maintaining contacts with the community outside the remote stations.

14. On the eligibility of the allowance, PAS/CS advised that it was currently payable to officers working in CSD, the Royal Hong Kong Police Force and the Housing Department at stations on Cheung Chau, Lantau, Lamma, Hei Ling Chau and in Cape Collinson Correctional Institution where there was no or limited land access. As regards whether staff working in other departments or remote areas outside the current definition of remote stations could apply for the allowance, PAS/CS advised that the Head of Department concerned would have to justify the case to the Civil Service Branch which would consider each case on its merits.

15. The Committee approved this item.

Item No. 6 - FCR(96-97)11

CAPITAL WORKS RESERVE FUND
HEAD 708 - CAPITAL SUBVENTIONS AND MAJOR SYSTEMS AND EQUIPMENT
Education Subventions
Subhead 8012EC Improvement works to existing secondary schools based on the recommendations of the Education Commission Report No. 5 - phase 1
Subhead 8013EC Improvement works to existing primary schools based on the recommendations of the Education Commission Report No. 5 - phase 1
Subhead 8014EC Improvement works to existing primary schools based on the recommendations of the Education Commission Report No. 5 - phase 2
Subhead 8015EC Improvement works to existing secondary schools based on the recommendations of the Education Commission Report No. 5 - phase 2
Subhead 8017EC Improvement works to existing secondary schools based on the recommendations of the Education Commission Report No. 5 - phase 3
Subhead 8018EC Improvement works to existing primary schools based on the recommendations of the Education Commission Report No. 5 - phase 3

16. In response to a members question, the Deputy Secretary for the Treasury (3) advised that, under the present procedures, capital subvented works projects funded under Head 708 of the Capital Works Reserve Fund were submitted directly to the Finance Committee (FC) for consideration. At members request, the Administration had recently agreed that these projects should be considered by the Public Works Subcommittee (PWSC), as other Public Works Programme projects, before submission to FC. The terms of reference of PWSC were now being revised, but to allow some lead time for the Administration to prepare for the change, the new arrangement would not take effect before the end of this session.

17. Responding to members questions, the Project Director of the Architectural Services Department (PD/ASD) advised that the School Improvement Programme aimed at improving the quality of primary and secondary education with the provision of additional space and accommodation for teaching and other activities. To enable the necessary improvement works to be carried out, some schools might have to be relocated to larger premises or have the number of classes reduced. As regards the 23 schools which were found subsequently not suitable for improvement works after detailed feasibility studies, the Senior Assistant Director of Education advised that the department would discuss with the school principals concerned on alternative remedies. He undertook to provide members with a list of the 23 schools in question.

18. On the consultancy fees, PD/ASD advised that consultancy fees normally took up about 20% of the project costs, and considering the complicated and extensive works involved in the projects, the proposed consultancy costs were not unreasonable. As regards the increase in consultancy fees for Phases 2 and 3 of the School Improvement Programme, PD/ASD explained that, in the absence of detailed information on the works required, the previous estimates had proved to be too conservative. The revised estimates reflected the recent price levels and the higher costs likely required for the additional building and construction works in improvement projects of this kind. He also assured members that the consultancy contracts would be awarded through competitive tendering.

19. The item was approved.

Item No. 7 - FCR(96-97)8

CAPITAL WORKS RESERVE FUND
HEAD 710 - COMPUTERISATION
Information Technology Services Department
Subhead A004XS Replacement of the central bureau computer
Head 47 - INFORMATION TECHNOLOGY SERVICES DEPARTMENT
Subhead 001 Salaries

20. In response to a member, the Director of Information Technology Services (D/ITS) advised that benefits of computerisation projects would usually be materialised within six to twelve months after implementation. On implementation of this project, some 28 posts in the Architectural Services Department and the Treasury could be reduced in addition to savings in building maintenance and accommodation costs. In this respect, he undertook to provide further information on the timetable for the realisation of the anticipated savings. The member also requested that such information should be included in future FC papers.

21. On the substantial reduction in the costs for procuring computer hardware and system software, D/ITS explained that the original estimate of $30 million in 1990 was based on the design of a stand-alone project. However, it was now possible for Government to include the proposed system within a larger, consolidated computerisation project in the Information Technology Services Department funded under Head 710 Subhead A004XS. The costs for the necessary computer equipment, calculated at the latest price level, had proved to be much cheaper. As there was sufficient balance under Subhead A004XS to meet the capital expenditure, no additional funding was required in this respect.

22. The Committee approved this item.

23. The Committee was adjourned at 4:20 p.m.

Legislative Council Secretariat
23 July 1996

Last Updated on 27 November 1998

FINANCE COMMITTEE

Minutes of the proceedings of the Meeting held on 10 May 1996 at 2:30 p.m. in the Legislative Council Chamber

Minutes of the proceedings of the Meeting held on
10 May 1996 at 2:30 p.m. in the Legislative Council Chamber