Legislative Council Panel on Education
For Discussion at the 20 December 1996 Meeting


This paper informs Members of the recommendations made by the University Grants Committee (UGC) in its Review Report : Higher Education in Hong Kong, the Government’s responses to these recommendations and the way forward.


2. The University and Polytechnic Grants Committee published in 1994 its Interim Report on the Review of the Development of Higher Education 1991-2001. Having completed its public consultation exercise and given detailed consideration to a number of issues, the UGC, as it is now known, has submitted to the government its Final Report on the Review of Development of Higher Education in Hong Kong. A Legislative Council Brief together with a copy of the report has been passed to Members on 28.11.1996.


An Overview

3. The UGC’s main proposals include the overall student numbers at different levels during a period of consolidation in growth, the number of non-local students, the funding of continuing education, the provision of student hostels, the normative length of undergraduate study, language proficiency and the target of reducing unit costs by 10% by the end of the triennium without detriment to quality, whilst further improving standards and meeting the changing needs of Hong Kong. On 26 November 1996, the Executive Council approved the Administration’s recommendations, which are set out below in details and summarised in Annex A.

Student Numbers

First-Year-First-Degree Places

4. After taking into account community expectations, demographic changes, needs of the economy, comparisons with neighbouring countries, affordability and stages of development in schools, technical institutes and tertiary institutions, the UGC has proposed that there is no need for a further increase in access to tertiary institutions for the 17-20 age group at present. We agree with the UGC’s recommendation that the number of first-year first-degree (FYFD) places should remain constant at 14,500 full-time-equivalent (fte), i.e. some 18% of the 17-20 age group.

Sub-degree Places

5. The UGC proposed and we agreed that the sub-degree student numbers in UGC-funded institutions (excluding the Hong Kong Institute of Education (HKIEd) ) should remain around the present level, i.e. 9,450 fte for the next triennium. The number of sub-degree places in HKIEd should be allowed a slight increase from 4,950 to 5,200 to enable it to give more attention to primary level, special subject and kindergarten teacher training. The total number of sub-degree places, therefore, will amount to about 14,650 fte.

Taught Post-graduate Courses

6. The UGC proposed that there should be a slight increase in the subsidised taught postgraduate (Tpg) numbers from 5,110 in 1997-98 to 5,600 fte by 2000 - 01, partly to provide an allowance for the planned introduction of Post-Graduate Diploma in Education (PGDE) programmes at HKIEd. But, given our view that tertiary education should consolidate in the foreseeable future and the present forecast surplus in post-graduates of all types projected for the labour market by the end of the century, it was decided that the slight increase in Tpg should allow only for the planned increase of PGDE programmes to be introduced at HKIEd. It would be up to tertiary institutions to review whether some less popular courses should be phased out and some popular courses should be delivered as self-financing continuing education in order to accommodate an increase in other Tpg programmes within the overall Tpg target.

Post-graduate Research Degree Courses

7. The UGC proposed and we agreed that the number of research degree students should remain constant at the 1997-98 level, i.e. 3,595 fte - to maintain the institutions’ research capabilities. The institutions should be urged to enrol a greater and more varied mix of students from other countries.

Overall Student Numbers at the Institutions

8. To achieve the containment of undergraduate places as recommended by UGC, any overall increase in FYFD places in one institution will need to be offset by a reduction in another institution. We envisage that the current overall distribution of student numbers between institutions at Annex B will remain broadly the same. The final numbers will, however, be subject to further examination in the context of the fully costed proposals to be submitted by the institutions for the purposes of the 1998-99 budgetary exercise.

Non-Local Student Numbers

9. The UGC proposed and we agreed that in order to promote Hong Kong as a regional centre for higher education, a further 2% of non-local students paying standard fees should be permitted within the undergraduate and taught postgraduate target numbers, in addition to the 2% non-local students already permitted beyond this target.

10. As suitably qualified local graduates prefer not to take up research work, it is necessary to increase the proportion of non-local students within the research postgraduate target. We agreed with the UGC that the we should permit an increase of non-local students from 20% to 33% within the research postgraduate target number. This may help inject a healthy element of competition for our publicly funded places. To ensure that the quality of non-local students are at least on a par with, or preferably better than local entrants, the UGC would be asked to discuss with our tertiary institutions the possibility of setting tests or examinations by which to identify the most qualified and meritorious non-local students.

Research Costs

11. The UGC recommended that the element associated with research in the current funding of tertiary institutions should not be reduced and, ideally, should be increased. We agreed that the quality and level of research funding from all sources is vital both to the role of tertiary academic institutions in Hong Kong and elsewhere and to their ability to achieve international recognition. Nevertheless, we are aware of the public concern about containing costs of providing tertiary education, and avoiding passing on research costs to the tuition fees of undergraduates. It was decided, therefore, to ask the UGC to advise on the extent to which research cost elements contribute to the annual recurrent costs of tertiary institutions before we consider the level of research funding further.

Student Hostels

12. The UGC advised that there are strong educational reasons to support its recommendation that there should be a substantial increase in the provision of student hostels. In line with this advice, the Government has recently reviewed and revised the policy on publicly-funded student hostels. Under the revised policy, the following criteria will be used in the calculation of the level of provision for each degree-awarding UGC-funded institution except Lingnan College-

  1. all undergraduate students should be given the opportunity to stay in student hostels for at least one year; and
  2. all research postgraduate students, non-local students and those undergraduate students whose daily travelling time exceeds four hours should be granted student hostel places.

13. On the basis of the new policy and subject to the availability of land and resources, about 11,000 additional hostel places will be required for six UGC-funded institutions. Details are set out in Annex C. The Government’s priority will be to extend the policy to the City University of Hong Kong, the Hong Kong Baptist University and the Hong Kong Polytechnic University, which have hitherto not been provided with student hostels. These three Universities have already submitted to the Government their proposals to construct student hostels near their respective campuses. Any project proposals from the other UGC-funded institutions to construct additional hostel places will be considered in the light of available resources and in accordance with the revised criteria.

Differential Fees

14. The present policy of charging uniform fees for all types and levels of institution has resulted in humanities undergraduates paying about 30% of the actual cost of their education and medical students paying only 6%. The UGC indicated that differential fees at sub-degree and undergraduate levels could be introduced, where appropriate. The UGC’s view is that differential fees may take into account the higher costs of certain courses (e.g. laboratory-based courses) but such differences should not reflect the full costs of provision. The Committee also suggested there is more scope for higher levels of cost recovery through fees for taught post-graduate courses but research students should pay fees at the lowest undergraduate level. We consider that the UGC should ascertain detailed views from the UGC-funded institutions on differential fees and make recommendations to Government for further consideration.

Length of Degree Courses

15. We agree with the UGC that for the great majority of students the three-year course will, after 1998, continue to satisfy both the "general" and "specific" needs of an undergraduate education. The normal length of an undergraduate course should, therefore, remain at three years following two years of sixth form study at least for the foreseeable future. Meanwhile, we need to improve the liaison between schools and universities regarding the aims, objectives and relevancy of school education for students who must undergo an effective transition to higher education. We are already taking active steps to achieve a more effective interface between the different authorities responsible for education and examinations.

Reduction in the Cost of Tertiary Education

16. UGC considered that as tertiary education enters a consolidation phase, the institutions should be able to focus on measures to improve the efficiency and the quality of their existing activities. We agreed with the UGC’s assessment that the tertiary institutions can absorb a gross reduction in student unit cost of slightly more than 3% per annum, i.e. a total of 10% reduction in unit cost by the end of the 1998-2001 triennium without detriment to quality.

UGC to Retain Half of Its Cost Savings

17. We accepted in principle the UGC’s recommendation that about half of the annual reduction in cost should be retained by the UGC for redistribution, through its Central Allocation Vote, to meet new expenditure requirements and encourage special developments including the further development of areas of excellence, additional quality assurance initiatives, and for any necessary institutional restructuring. Towards that end and to meet specific objectives to be approved in the Estimates, the plough back of savings should be placed in earmarked funds within the Central Allocation Vote and administered accordingly by the UGC.

18. The UGC would be invited to develop and advise Government on its funding strategies for containing and reducing unit costs and supporting new programmes from the savings to be achieved in the context of its estimates for the 1998 - 2001 block grants.

Language Proficiency

19. The UGC considered that the institutions should be more rigorous in enforcing their entry requirements and that the UGC would not penalise institutions financially for modest under-enrolment in order to maintain quality. The Committee suggested that the language enhancement courses now being offered at the institutions would be more effective when such courses are conceived not just as providing remedial English, but also as promoting a continued awareness of the inseparability of language skills from subject content throughout a student’s academic career. It suggested that institutions should devote more time and resources to the improvement of language skills, and that one possible way is to extend teaching time by a greater use of vacation time. It further proposed that the institutions should test language competence at intervals and inadequate performance should be a bar to progression. It also suggested that students’ language competence be recorded on their certificates of subject qualifications for the benefit of potential employers.

20. We supported the Committee’s recommendations that tertiary institutions should adhere strictly to their published minimum entry requirements for language standards. However, we note that a pass in the language examinations is not a standard minimum (and published) requirement for some first degree courses. We therefore proposed that where tertiary institutions were to admit local students who fail the Use of English and Chinese Advanced Supplementary Level examinations and there are no exceptionally good reasons why these students should be admitted (e.g. a student has marginally failed the language examination(s) but has achieved excellent scores in the relevant subject examinations concerned), the Government should withhold funding of places filled by these students. We would like to stress that -

  1. The above policy would complement the Government’s efforts in implementing the various recommendations arising from Education Commission Report No.6 in enhancing language proficiency including the provision of intensive language training in the schools sector.
  2. The Government will continue to fund places taken up by those students who failed the language examinations but do excel in other areas (e.g. music, sports, science and even arts subjects) because we believe they should also benefit from tertiary education.
  3. We fully respect the autonomy of tertiary institutions in managing their affairs, including Student admission. Hence, we will accept, without question, their judgement as to what constitutes "exceptional" abilities in other areas.
  4. This proposal should be implemented with effect from the 1998 intakes, so that the new cohorts of students will have had sufficient warning of the more rigorous policy and could adjust accordingly.
  5. At present, only 18% of the students of the 17-20 age group can take up heavily subsidised first-degree places and the pass rate of the Chinese and English examinations at the Advanced Supplementary Level is about 80%. It is only reasonable for the Government to expect that students admitted by the tertiary institutions passed their language examinations.
  6. Feedback from the tertiary institutions suggests that the Government’s proposal will have no practical effect on their admission policy.
  7. We will discuss with the UGC in the coming months and in the light of the 1997 intake on ways to ensure the language proficiency of our university students.
  8. It is the UGC’s recommendation which the Government has accepted that we will not reduce funding if the tertiary institutions have slightly under-enrolled because of the lack of qualified students.

Centres of Excellence

21. The UGC advises that if Hong Kong is to retain its leading economic position in the development of China and the Pacific Rim, it will need world-class institutions. The areas of excellence are not intended to be simply research groups. They should develop naturally within an institution, based upon collaboration between existing academic staff and possibly colleagues elsewhere, and the availability of resources. The UGC proposed and we agree that emphasis should be placed on the transmission of knowledge through teaching, interaction with industry and commerce, inter-institutional collaboration and international liaison. UGC will ensure that these areas develop on the basis of the strength of the staff involved and are rewarded only for their achievements and earned international recognition.

Funding of Continuing and Professional Education

22. We agreed with the UGC’s view that Continuing and Professional Education (CPE) should continue to grow, as it is important to the future economic and social well-being of Hong Kong. We also agreed that CPE should continue to be self-financing, especially for those courses which may contribute to personal, professional or employment enhancement. However, the UGC suggested that a development fund, to be agreed with the parent institution should be made available for the "starting up" of some new courses; for example to subsidise those courses where the primary purpose is beneficial to the society of Hong Kong (e.g. the upgrading of teachers and social workers). We advise caution here because CPE should, as a general principle, be self-financing. Any proposal for public subsidy should only be considered on very exceptional grounds and that the Government’s advice must be sought.

Our Way Forward

23. The Administration will consider public reaction to see whether, and if so, how the above decisions can be taken forward in planning for the 1998-2001 triennium.

Education and Manpower Branch
18 December 1996

Last Updated on 14 August 1998