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

ITEM FOR FINANCE COMMITTEE

HEAD 40 - EDUCATION DEPARTMENT
Subhead 300 Code of Aid for primary schools
Subhead 305 Code of Aid for secondary schools

Members are invited to approve supplementary provision of -

1. $15,274,000 under Subhead 300 Code of Aid for primary schools; and
2. $198,800,000 under Subhead 305 Code of Aid for secondary schools

to meet increased expenditure in 1995-96 for aided primary and secondary schools.

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PROBLEM
PROPOSAL
JUSTIFICATION
FINANCIAL IMPLICATIONS

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PROBLEM

The approved provision under Subhead 300 Code of Aid for primary schools and Subhead 305 Code of Aid for secondary schools is inadequate to meet requirements in 1995-96.

PROPOSAL

2. The Director of Education (D of E) proposes supplementary provision of $15,274,000 under Subhead 300 and $198,800,000 under Subhead 305 to meet increased expenditure in 1995-96 for aided primary and secondary schools.

JUSTIFICATION

3. Provision under Subheads 300 and 305 serves the following purposes -

1. to enable schools to pay salaries to all teaching and non-teaching staff employed in accordance with the terms of the Codes of Aid;
2. to enable schools to pay the administrative costs in relation to the running of the schools;
3. to enable schools to cover the costs of rent, Crown rent and rates in respect of premises used for school purposes; and
4. to cover Government’s donations towards the two statutory provident funds for teaching staff and employers’ contribution to approved non-statutory provident fund schemes for other staff.

4. On the basis of the latest expenditure projection, D of E estimates that there will be shortfalls of $15.3 million and $198.8 million under Subheads 300 and 305 respectively in 1995-96, calculated as follows -

5. The anticipated shortfalls are attributable to the following factors -

1. additional sums of $7,200,000 and $38,700,000 for primary and secondary schools respectively for the revision of the rates of the School and Class Grant (SCG) with effect from 1 September 1995 to maintain their real value. We revise the rates of SCG annually having regard to the movement of the price indices of the relevant expenditure items in the Consumer Price Index (A), its actual utilisation and expenditure pattern;
2. additional amounts of $8,074,000 and $16,300,000 for 476 primary and 332 secondary schools respectively to cover the increase of about 20% in payment of rates with effect from 1 April 1995;
3. additional expenditure of $9,700,000 to meet a higher than anticipated demand for school places in Secondary One. The actual demand for Secondary One places has increased from 1 779 classes by 20 classes to 1 799 classes, resulting in the need for provision of an additional 800 places;
4. additional expenditure of $42,200,000 for the employment of supply teaching staff in secondary schools to meet an increase in the number of teachers on approved leave and on training courses, including those provided for the implementation of the School Management Initiative;
5. additional amount of $11,900,000 to meet the higher salary cost incurred in secondary schools for employing 418 additional non-graduate teachers for delivering the “Project for better teaching standard” through the provision of additional services such as whole-school approach to guidance and school-based induction programmes;
6. additional amount of $4,200,000 to provide 110 additional teachers to implement the School-based Remedial Support Programme² which is at present extended to Secondary 2 in 1995-96;
7. additional amount of $71,700,000 for providing additional teachers to secondary schools adopting Chinese as the medium of instruction, for operating split class teaching, for filling approved promotion posts, and for granting additional salary increments to teachers who have acquired the relevant professional qualifications while serving; and
8. additional amount of $4,100,000 for filling 72 approved graduate teacher posts by graduates instead of non-graduates as a result of the improvement in the recruitment of graduate teachers in secondary schools.

FINANCIAL IMPLICATIONS

6. If Members approve the proposal, we shall offset supplementary provision of $214,074,000, made up of $15,274,000 under Subhead 300 Code of Aid for primary schools and $198,800,000 under Subhead 305 Code of Aid for secondary schools, by deleting an equivalent amount under Head 106 Miscellaneous Services Subhead 251 Additional commitments.

Education and Manpower Branch
December 1995

¹ Members approved in June 1995 civil service pay rise for 1995-96 and the extention of similar pay adjustment to staff in the subvented sector. The Secretary for the Treasury will approve under delegated authority in the normal way supplementary provision of $451.7 million and $658.2 million for Subheads 300 and 305 respectively to meet the additional expenditure arising from the pay adjustment.
² Under the School-based Remedial Support Programme, secondary schools with a high intake of the bottom 10% junior secondary pupils are provided with additional teachers to help the slow learners.

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