For discussion FCR(95-96)77
on 24 November 1995

ITEM FOR FINANCE COMMITTEE

HEAD 190 - UNIVERSITY GRANTS COMMITTEE
Subhead 496 Refund of rates - UGC-funded institutions

Members are invited to approve supplementary provision of $22 million to meet increased expenditure for refund of rates to University Grants Committee-funded institutions.

PROBLEM

The approved provision of $90,820,000 for refund of rates to the seven University Grants Committee (UGC)-funded institutions is inadequate to meet the requirements in the current financial year.

PROPOSAL

2. The Secretary-General, University Grants Committee (SG,UGC) proposes that supplementary provision of $22 million under Head 190 Subhead 496 Refund of rates - UGC-funded institutions be approved to meet the shortfall.

JUSTIFICATION

3. The provision of $90,820,000 under Head 190 Subhead 496 is for refund of rates to the UGC-funded institutions for their owned or leased properties. SG,UGC has recently reviewed the financial position of this subhead and estimates that there will be a shortfall of $22 million. The shortfall is attributable to requirements for -

  1. an additional sum of $10,360,000 for payments of rates for new buildings completed in 1993 and 1994; and
  2. an additional expenditure of $11,640,000 to meet the increase in rates which came into effect in 1994-95 following a revaluation of rateable values of properties as at 1 July 1993.

FINANCIAL IMPLICATIONS

4. The shortfall under Subhead 496 Refund of rates - UGC-funded institutions is estimated to be $22 million, calculated as follows -

$’000

(a) Expenditure up to 31 October 1995

63,926

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

48,894

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

112,820

(d) Approved provision for 1995-96

90,820

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

22,000

5. If Members approve the proposal, we shall offset the supplementary provision required by deleting an equivalent amount under Head 106 Miscellaneous Services Subhead 251 Additional commitments.

BACKGROUND INFORMATION

6. In the past, properties owned or leased by The University of Hong Kong and The Chinese University of Hong Kong were exempt from payment of rates. On 19 January 1972, in furtherance of the Government’s policy to avoid concealing subventions wherever possible, Members decided that the exemption should cease. At present, Government makes available in the annual Estimates funds for reimbursement of the rates paid in respect of properties owned/leased and occupied by the UGC-funded institutions. Cash provision is included in the context of Estimates under Head 190 University Grants Committee Subhead 496 Refund of rates - UGC-funded institutions.

Education and Manpower Branch
November 1995

Last Updated on 2 December 1998