For discussion FCR(95-96)94
on 15 December 1995


Subhead 023 Quartering

Members are invited to approve supplementary provision of $44 million under Subhead 023 Quartering.


The approved provision of the subhead is insufficient to meet anticipated expenditure for the remainder of the financial year.


2. The Secretary for the Civil Service (SCS) proposes supplementary provision of $44 million under Subhead 023 Quartering.


3. On the basis of actual expenditure for the seven months from April to October 1995, SCS estimates that expenditure for the whole of the financial year under Subhead 023 will exceed the approved provision by $44 million, calculated as follows -


(a)Actual expenditure from 1 April to 31 October


(b)Estimated expenditure for the the remainder of 1995-96


(c)Total expenditure for 1995-96 [ (a) + (b) ]



(d)Approved provision for 1995-96


(e)Shortfall [ (c) - (d) ]



$44 million

4. The shortfall is due to increased expenditure on Private Tenancy Allowance (PTA) for the following reasons -

  1. an increase in PTA rates with effect from 1 April 1995 to reflect the movements in rentals (vide paragraph 7 below). In line with normal practice, we do not allow for these price adjustments under the relevant subhead in the original Estimates. Rather, we would deal with any net additional requirement that may be required during the financial year through supplementary provision. This increase accounts for $35 million of the supplementary provision required; and
  2. a higher than anticipated number of officers receiving PTA. In estimating the provision required for 1995-96, we assumed that of the 990 officers who would be drawing PTA as at 31 March 1995, 340 would cease to receive PTA in 1995-96. This turns out to be somewhat optimistic. Up to October 1995, some 250 officers have left the PTA scheme,to October 1995: with 170 opting to join the Home Financing Scheme (HFS), 40 moving into non-departmental quarters (NDQs) and 40 for other reasons. We estimate that a further 40 PTA recipients would cease to draw PTA during November 1995 to March 1996. The total number of officers ceasing to receive the PTA in 1995-96 would thus be around 290. This is 50 less than the 340 originally assumed. The greater number of officers remaining on PTA accounts for $9 million of the supplementary provision required.


5. If Members approve the proposal, we shall offset the supplementary provision required by deleting an equivalent amount from Subhead 033 Home Financing Scheme under the same Head 46 General Expenses of the Civil Service. The surplus in Subhead 033 is mainly due to a slightly lower than anticipated number of officers opting to join the HFS in 1995-96.


6. PTA is available for overseas officers and local officers remunerated on Point 34 or above of the Master Pay Scale or equivalent, and who were appointed to the civil service before 1 October 1990, to assist them in renting local accommodation. PTA as a housing benefit is no longer available to officers appointed on or after 1 October 1990.

7. We adjust PTA rates annually on 1 April according to the formula approved by Members on 8 March 1991. Under the approved formula, the rate of adjustment is based on the change in rental indices in selected geographical areas in the third and fourth quarters of the previous year over the same quarters the year before. The areas are selected in accordance with the residence pattern of PTA recipients. Tenancies expiring in 1995-96 reflect rental rates secured in 1993-94. There was a significant increase in rental rates between 1993-94 and 1994-95, and between 1994-95 and 1995-96 - up to over 33% in the latter case. Although rents are now moderating, the renewal of tenancies in 1995-96 inevitably reflects this considerable increase over the years.

8. An objective of the HFS is to encourage PTA recipients as well as those residing in NDQs to opt for HFS, with a view to reducing Government’s long term expenditure on providing housing benefits to its employees. So far, we have been very successful in achieving this. Since the HFS began in 1990, a total of 2 341 officers have relinquished PTA to join the HFS. There are currently some 830 officers receiving PTA.

Civil Service Branch
December 1995

Last Updated on 2 December 1998