This paper describes the feedback from interested parties on the review of the structure of district organisations received over the past several months and the progress in preparing the public consultation document to be issued later this year.

2.In the Policy Addressed delivered in October 1997, the Chief Executive announced that the Administration would take a fresh look at the district organisations, i.e. the Municipal Councils (MCs) and District Boards (DBs), so as to decide whether the present structure of district organisations would continue to ensure the efficient and responsive delivery of services to our evolving community. The Provisional Legislative Council also passed a motion in September 1997, calling on the Administration to conduct such a review.

Feedback Received So Far

3.An inter-departmental steering group chaired by the Secretary for Constitutional Affairs has since been set up to oversee the conduct of the review. As the first step of the deliberation process, Constitutional Affairs Bureau (CAB) has collected or solicited the views of interested parties, including members of the Provisional Municipal Councils (PMCs) and Provisional District Boards (PDBs), political parties, academics and commentators since November 1997. Other organisations including the Heung Yee Kuk and the Hong Kong Cultural Sector Joint Conference and individuals have met with CAB officials or submitted written submissions to express their views.

4.The following issues have been widely commented upon by PMC and PDB members, political parties and other interest groups -

  1. whether two Municipal Councils should be amalgamated;

  2. whether the two-tier system MCs and DBs should be merged into a single-tier system;

  3. whether the number of DBs should be reduced or retained at 18;

  4. whether the role of DBs should be expanded; and

  5. whether the functions of the MCs should be rationalised.

5.The following issues have attracted comments to a lesser extent -

  1. concerns about the lack of public accountability of the MCs, inefficiency in its operations, waste of resources and lack of expertise in discharging their responsibilities; and

  2. whether appointed and ex-officio membership in DBs and MCs should remain;

  3. the size of DB constituencies; and

  4. the need to expand the review to cover other bodies such as Area Committees.

A summary of the comments received so far is at Annex.

Progress of the Review

6.We are now studying the structure and functions of district organisations, and have a number of preliminary observations, as set out in paragraphs 7 - 12 below.

7.The Urban Council (UC) and Regional Council (UC) enjoy a high degree of autonomy in setting policy and utilising resources in the provision of environmental hygiene, arts and culture and recreational and sports services and facilities within their respective regions. Policy bureaux (or other relevant statutory bodies) also have responsibility for these matters in their respective portfolios. Policy formulation and implementation and resources are thus divided between the two Councils and the relevant policy bureaux on subject basis and further divided between the two Councils on geographical basis. This has affected policy co-ordination and the development of consistent territory-wide policies in particular functional areas.

8.For example, in the area of food hygiene, the two Councils, the Health and Welfare Bureau and the Department of Health are all involved. In some cases, such as the recent bird flu incident, other policy bureaux and departments are also involved. In respect of food safety legislation, the MCs have the power to make by-laws regarding frozen confections and milk, etc. On other food items such as artificial sweeteners and dried milk, the regulation-making power is vested with the Director of Health. This sometimes causes uncertainty and confusion over who is the ultimate authority over food safety control. Matters become even more complicated when the MCs have differing views on food safety policy and make different by-laws for the same type of food products. The Hygiene Division of the Department of Health, which is responsible for control of food safety and is funded by the two MCs, has to apply different food safety standards in the two regional areas.

9.Unlike other government departments and subvented bodies which receive funds through annual appropriation by the Legislative Council (LegCo) and are hence subject to the scrutiny and approval of LegCo in various aspects of spending, the two MCs are funded directly through a percentage share of rates. The rates percentage is approved by the legislature by resolution. Within the resources available from their share of rates revenue, the MCs have full autonomy in drawing up their annual budgets, increasing their establishment, committing to capital works projects, setting fees and charges etc. However, there is no system to ensure the MCs' accountability to the Administration or LegCo for their decisions since they have the authority to approve projects and services as well as the funding for them. Concern has been expressed about the efficiency of some of the Councils' operations such as hawker control, and the cost-effectiveness of some of their large scale projects and programmes.

10.There are altogether 18 DBs. They play an essentially advisory role on district matters and on territory-wide issues as appropriate. They are responsible for overseeing the management of community halls. Public funds are made available to DBs for the implementation of minor environmental improvement and community involvement projects in the districts. Some DB members complain that their views on district matters are often not respected. They also complain about the lack of resources (in comparison to the MCs) to undertake capital projects in the district. When consulting DBs on territory-wide issues, representatives of policy bureaux and departments have to attend the meetings of 18 DBs to conduct one round of consultation. 11.There is some duplication of effort between the DBs and the MCs. For example, both are engaged in promoting cultural and recreational activities in the districts although for different purposes. Community building is a key purpose for DBs' activities. Sometimes, activities are jointly presented because MCs have the financial resources and professional expertise while DBs can mobilise the local network to support the activities. Some have suggested that to have a single body promoting these activities would appear to be more cost- effective and efficient.

12.In the 1994 DB elections by which a total of 346 members were elected, the population criteria of 17,000 were adopted for each single seat constituency allowing a margin of 25% either way. The small size of the constituencies has resulted in some larger housing estates being divided into two or three constituencies, represented by DB members who might hold different views on issues affecting the same estate. This has not been conducive to co-operation and harmony in the community and within the estate. The small size of the constituencies has also been criticised as making some DB members focus on narrow parochial interests.


13.We are considering how these issues could be addressed. Through the review, we hope to come up with a structure of the district organisations which will improve administrative efficiency, ensure an effective system of public accountability, and proper allocation and use of public funds. Whatever changes are eventually made, we aim to maintain and encourage public participation in community affairs.

14.We are preparing a public consultation document which will be issued in around May or June settting out several broad options for change. The consultation period will last for around two months. A decision will be made after considering the views and comments received during the consultation period.

Constitutional Affairs Bureau
March 1998


Summary of comments by members of Provisional Municipal Councils/District Boards political parties, interest groups and academics/commentators on various issues concerning the structure of district organisations

Relationship between the Urban and Regional Councils

This relationship between the two Councils was one of the issues most widely commented upon. A considerable number of those who commented on this subject agreed that the two Municipal Councils (MCs) should be amalgamated. The most common reasons given were that -

  1. it would be more efficient and could better avoid wastage of resources if one Council was to provide all municipal services;

  2. the rapid development of the New Territories meant that it no longer differed from the urban area in terms of the requirement for public services and community facilities; and

  3. this would avoid unnecessary discrepancies in the policies and practices of the two Councils which caused confusion to the public.

3.Nevertheless, some members of the Provisional Regional Council (ProRC) and Provisional District Boards (PDBs) and the Heung Yee Kuk argued that two separate MCs should be retained. The most common reasons given were that -

  1. it would be difficult for a single municipal council to develop and implement policies which could be applied to both the Regional Council (RC) and Urban Council (UC) since the needs and characteristics of their respective areas were very different; and

  2. the current system worked well and there was no harm for urban and rural areas to have different systems. UC and RC only needed to strengthen their co-operation.

Change to the two-tier system of local representative institutions

3. Views were divided on whether the two-tier structure of local representative institutions should be retained. While some preferred retaining the two-tier structure, others supported merging the MCs and District Boards (DBs) to form a number of regional bodies. Various opinions on the appropriate number of regional bodies have been expressed, ranging from four to ten. Some supported merging the two MCs as a first step and merging MCs with DBs in the long run.

4. The most common reasons given for retaining the two tiers were that -

  1. the MCs and DBs played distinctive roles. Any duplication of efforts could be rectified by rationalising the division of labour;

  2. the merger would result in reduction of members of local representative institutions and fewer opportunities for political participation; and

  3. if the MCs and DBs were merged into several regional bodies providing municipal services, it would create even more inconsistencies in policies and practices.

5.The most common reasons given for merging the MCs and DBs into a single-tier system were that -

    Hong Kong was small and geographically compact and it was superfluous and inefficient to have two tiers of local representative institutions;

  1. there was a similarity of role between the DBs and MCs e.g. in providing cultural and recreational services; and

  2. there were often conflicts between MCs and DBs. As DB members had better understanding of district needs, efficiency could be improved if MCs were abolished and their responsibilities were transferred to a number of enlarged DBs.

6.Among those who supported merging the MCs and DBs into several regional bodies, some suggested that certain functions of the MCs such as liquor licensing, licensing of food establishments and formulation of arts, culture, sports and public health policies should be transferred to territory-wide agencies to improve efficiency and ensure uniformity in the standard of services.

Number of District Boards

7.Among those who thought that the two-tier structure should be retained, some suggested that the number of DBs should be reduced to save resources and improve administrative efficiency. Different options on the appropriate number of DBs had been suggested by those who supported reducing the number of DBs, ranging from eight to twelve.

8.Nevertheless, others argued that the existing number of DBs should be retained for the following reasons -

  1. the merger of DBs would affect the network of contact with the grassroots and community participation at the district level;

  2. it might give rise to conflicts among representatives of different districts within the enlarged DBs; and

  3. it would reduce the opportunities for training of politicians.
Role of District Boards

9.A number of PDB members thought that the role of DBs should be expanded because DB members has in-depth knowledge of the needs of their own districts. The following options on how DBs' role should be expanded had been suggested -

  1. to give DBs a role in the management of certain district facilities;

  2. to transfer some of the functions of the MCs to DBs;

  3. to empower the DBs to take decisions and to direct the actions of government departments on certain district matters; or

  4. to give DB veto power over government's proposals on certain district matters.

10. Nevertheless, some PDB members and commentators thought that there was no need to change the present role of the DBs which was essentially advisory. The main reasons given were that -

  1. in a compact city like Hong Kong, the implementation of territory-wide policies would be adversely affected if the DBs were given real executive powers; and

  2. DBs were confined to play a consultative role under Article 97 of the Basic Law. To give DBs executive powers over management of district affairs might be inconsistent with the Basic Law; and

  3. although DBs were advisory in nature, their views were generally well respected and influential.

Functions of the Municipal Councils

11.Some observed that the division of responsibilities and resources in the fields of culture and public health, etc. was fragmented among the MCs, government agencies and other statutory bodies. This has hampered efficiency and effectiveness in policy formulation and implementation. They suggested that some of the functions of the MCs should be transferred to the Government or other statutory bodies to improve efficiency in policy formulation, implementation and co-ordination.

12. On the other hand, some PMC and PDB members argued against transferring the functions or powers of the MCs to the Government. They generally saw this a retrogressive step in the development of representative government.

13. As mentioned in paragraph 9 above, some PDB members suggested that MCs should transfer some of their functions to DBs. Some even suggested that MCs should be abolished, leaving DBs to perform their role.

Public accountability and efficiency of Municipal Councils

14. Some PDB members, representatives of political parties, and commentators queried the public accountability of MCs and efficiency in certain areas of its operations such as hawker control. It was suggested that the review should aim to tighten the financial control and public accountability of MCs. For example, some suggested that the MCs' financial accounts should be audited comprehensively with in-depth value-for-money studies of their spending. There was also suggestion that the present arrangement of sharing rates revenue should be replaced by annual appropriation by LegCo.

Composition of Municipal Councils and District Boards

15.Some suggested that the appointed and ex-officio membership of MCs and DBs should be abolished so as to make the district organisations more representative. However, others thought that appointed membership should be maintained because they were able to contribute relevant experience or expertise on the MCs/DBs. Some Heung Yee Kuk members argued that its Chairman and Vice-Chairman and Rural Committee Chairmen should continue to be ex-officio members of the Regional Council and New Territories DBs respectively to ensure that the interests of residents of rural areas were adequately represented.

16. Some PDB members suggested that in order to reduce the resources spent on elections, members of the MCs (or a combined Municipal Council) could be returned through indirect elections from among DB members. However, some other PDB members objected to this idea, arguing that it would be a setback in democratic development.

Size of District Board constituencies

17.In the 1994 DB elections, the population criterion of 17,000 was adopted for each single seat constituency allowing a margin of 25% either way. Some thought that the size of the constituencies was too small. They were concerned that this had made some DB members focus on narrow parochial interests. It was observed that some large housing estates were divided into two or three constituencies represented by DB members holding different views on issues affecting the same estate.