Legislative Council

LC Paper No. CB(2) 606/98-99
(These minutes have been seen by the Administration)

Ref : CB2/PL/PS

LegCo Panel on Public Service
Minutes of Meeting held on Monday, 19 October 1998 at 10:45 am in Conference Room B of the Legislative Council Building

Members present:

Hon TAM Yiu-chung, JP (Chairman)
Hon Mrs Sophie LEUNG LAU Yau-fun, JP (Deputy Chairman)
Hon LEE Kai-ming, JP
Hon CHEUNG Man-kwong
Hon CHAN Wing-chan
Hon Ambrose LAU Hon-chuen, JP

Members absent:

Hon LEE Cheuk-yan
Hon CHAN Kwok-keung
Hon Andrew WONG Wang-fat, JP
Hon Michael HO Mun-ka
Hon Howard YOUNG, JP

Public Officers attending:
Mr LAM Woon-kwong, JP
Secretary for the Civil Service

Ms Sandra LEE
Deputy Secretary (Civil Service) 1

Mr D W Pescod
Deputy Secretary (Civil Service) 2

Ms Anissa WONG
Deputy Secretary (Civil Service) 3

Mr Cletus LAU
Director of General Grades

Mrs Mary SZETO
Director, Civil Service Training and Development Institute

Commissioner for Official Languages (Acting)
Clerk in attendance:
Mr LAW Wing-lok
Chief Assistant Secretary (2)5
Staffs in attendance:
Mrs Justina LAM
Assistant Secretary General 2

Mr Arthur CHEUNG
Assistant Legal Adviser 5

Miss Mary SO
Senior Assistant Secretary (2)8
1. The Chairman welcomed representatives of the Civil Service Bureau (CSB) to the meeting. He said that the first part of the meeting would be devoted to the briefing by the Secretary for the Civil Service (SCS) on the Chief Executive's Policy Address and the second part would deal with other items on the agenda.

I. Briefing by the Secretary for the Civil Service on the Chief Executive's Policy Address

2.. SCS briefly outlined the new key initiatives to achieve the policy objective of the CSB. They were as follows -
  1. to embark on an Enhanced Productivity Programme (EPP) to require departments and agencies to deliver productivity gains amounting to 5% of their operating expenditure between now and the year 2002. One of the measures to achieve this was to give department heads the flexibility to hire non-civil service staff on contract terms, where appropriate;

  2. to conduct a comprehensive review of the appointment policy on pensionable, agreement and temporary terms with the aim of making it more flexible to meet the needs of the departments, as well as undertaking a review of the civil service pensions system with a view to modernising it to suit present day circumstances;

  3. to invite the Standing Commission on Civil Service Salaries and Conditions of Service to undertake a Benchmark review to update the reference points in comparing starting salaries in the public and private sectors, so as to ensure that civil service entry pay was broadly comparable with that in the private sector;

  4. to equip civil servants with the skill, knowledge and ability to deliver an efficient service to the community, such as enriching induction training programmes to instil civil service values, enhancing training in the knowledge of the Basic Law and contemporary Mainland issues and policies, organising more exchanges with the private sector and other governments on management and public administration, as well as strengthening the skills of general support staff to enable more effective staff deployment; and

  5. to promote staff well-being by providing professional counselling services to help staff cope with stress and improving the staff Holiday Bungalow Scheme.
Accountability of the Government

3. Mr CHEUNG Man-kwong said that the inept way in which the Government handled a series of public health and hygiene incidents and the chaos at the new airport had undermined public confidence in the Government's ability to manage crises. However, there was no mention in the Policy Address of any admission of the Government's blunders in the handling of these incidents. This reflected the Government's insensitivity to public views and unwillingness to admit mistakes.

4. In response, SCS said that the Government had reviewed the handling of these incidents and had learnt lessons from them. The Civil Service Training and Development Institute (CSTDI) would continue to provide training on crisis management to help strengthen civil servants' skills in this regard. He pointed out that whilst there was certainly room for improvement in the handling of these incidents, there were aspects in which the Government had done very well. He added that assessment of the Government's performance should be made in an objective manner.

5. Mr CHEUNG Man-kwong agreed that there were things done by the Government which deserved praise. One example of these was the publishing of 37 Policy Objectives booklets in which the Bureau Secretaries specified the results which they aimed to deliver for the community in respect of the Government's programme areas. He hoped that the Government would publicly apologise for its mishandling of the avian flu incident and the chaos at the new airport in its response at the forthcoming debate on the Policy Address. SCS said that the Government would listen very carefully to the views expressed by Members during the debate and respond as appropriate.

6. In response to the Chairman, SCS said that the Government would not shy away from taking responsibility for any mistakes it made. He added that he himself had openly admitted to making mistakes before.

Enhanced Productivity Programme (EPP)

7.In reply to Mr CHAN Wing-chan, SCS said that immediately after the Chief Executive's delivery of the Policy Address on 7 October 1998, he briefed the staff representatives of the four Central Consultative Councils on the EPP. He had explained that details of the EPP were being drawn up in consultation with department heads and stressed that staff would be consulted through the Central Consultative Councils. Heads of Department were also encouraged to use the Departmental Consultative Committees to consult staff on the implementation of the EPP.

8. Mr CHAN Wing-chan enquired about the measures to be taken by the Administration to achieve the 5% productivity gains target within three years. SCS replied that CSB and the Finance Bureau (FB) would work with departments to examine how best the target could be achieved. Generally speaking, it would not be too difficult for a department to attain the 5% productivity gains target within three years through a combination of means : e.g. more efficient deployment of staff, contracting out of certain services and hiring of contract and temporary staff. He added that at this stage there was no firm plan as to whether certain departments would be re-structured through privatisation or corporatisation in order to achieve greater cost-effectiveness in the delivery of their services. At present, only the Housing Department was considering the feasibility of corporatisating/privatisating some of their services.

9. In reply to Mr CHAN Wing-chan's further enquiry, SCS stressed that the EPP was a mid- and long-term plan and was not specifically devised in response to the current financial crisis. The Government was determined to make the EPP a success. Both the Chief Secretary for Administration and the Acting Financial Secretary had impressed upon department heads at an earlier briefing that the target of 5% productivity gains must be achieved within three years.

10. Mr CHEUNG Man-kwong opined that the 5% productivity gains should not be applied across the board as some departments could achieve more than 5% gain while other departments might need additional resources. SCS said that FB and CSB would work closely with departments on EPP to assist them in setting and achieving the productivity gains target.

11. The Chairman asked whether there was scope for staff reduction in some departments. In reply, SCS said that different departments had different staffing requirements. For instance, a department which had a relatively small establishment might require additional staff to provide new services or to meet increased demand in existing services. On the other hand, larger departments would be in a better position to cope with increase in workload through internal redeployment of staff. He further said that more established departments would be encouraged to review whether certain long-standing services should continue, and if so, how the work procedures involved could be streamlined so as to provide the services in a more cost-effective manner.

12. Mrs Sophie LEUNG said that the Efficiency Unit should take part in assisting departments in the implementation of the EPP. She was also of the view that department heads should be delegated more authority in human resource management. In response, SCS said that CSB and FB would work in tandem with the Efficiency Unit to help departments draw up plans to achieve the 5% productivity gains. He further said that it was the aim of the Government to delegate more authority to department heads to enhance efficiency and effectiveness in staff management. He stressed, however, that staff must be reassured that they could seek redress if they felt aggrieved by departmental management actions which affected them.

13. Mr Ambrose LAU said that certain services provided by the Government required members of the public to visit several departments before they could obtain the service. He asked whether the Government would consider appointing a body to undertake the task of streamlining the procedures involved to achieve greater efficiency in the delivery of services to the public. SCS replied that the Business and Services Promotion Unit (BSPU) was tasked with the responsibility to assist departments in streamlining and consolidating work procedures among departments, e.g. simplifying the procedures and setting up one-stop services in the application for and issuance of various types of licences. He undertook to convey Mr LAU's view to the BSPU and the Management Services Agency for consideration.

14. Mr CHEUNG Man-kwong said that a newspaper recently reported that a number of departmental quarters leased for use by the Correctional Services Department on Lantau Island were left vacant, which was a wasteful use of resources and cause for public resentment. He suggested that department heads should critically examine items of expenditure under their control, particularly those relating to the provision of out-dated staff welfare facilities.

15. SCS responded that department heads had the responsibility to monitor departmental expenditure on a regular basis and deploy resources as appropriate to meet their operational needs. He further said that the recent directive given by CS requiring department heads to respond positively to value-for-money recommendations put forward by the Director of Audit was an indication of the Government's determination to improve productivity. As regards the utilisation of departmental and non-departmental quarters, the Deputy Secretary (Civil Service) 2 said that the Government was tackling the issue of vacant quarters very vigorously. A working group chaired by him, and comprising representatives of FB, Government Property Agency, disciplined services, Rating and Valuation Department and Lands Department, was tasked with the responsibility to ensure that quarters were used effectively. As regards the departmental quarters on Lantau Island, there was an operational need to provide quarters to staff working in the relatively remote Institutions such as Chi Ma Wan Drug Addiction Treatment Centre.

16. Mr CHEUNG Man-kwong said that he would ask a LegCo question seeking information on what measures, if any, had been or would be taken by the Administration to identify areas where savings could be achieved.

17. In reply to the Chairman, SCS said that apart from the Director of Audit who was tasked to monitor that public money was spent properly and in conformity with accepted accounting standards, other bodies such as CSB, FB, the Efficiency Unit and the Business and Services Promotion Unit also had the responsibility to monitor that public money was not spent in a wasteful way. Notwithstanding this, department heads should also play their part in ensuring that the resources under their control were spent properly.

18. In reply to Mr LEE Kai-ming, the Director of General Grades said that the development of a strategy to streamline the provision of clerical services within the Government was part of the EPP. The General Grades Office had successfully launched a scheme to develop a multi-skilled support staff service throughout the civil service. This included streamlining the existing grade structures through phasing out Office Assistants and Typists in general offices, and strengthening word processing and computing training on a service-wide basis to achieve more flexible deployment of clerical and secretarial staff. The General Grades Office would soon embark on a consultation process with departments to further enhance office automation and streamline the structure of the Clerical Grade.

Review of appointment policy and entry salaries

19. In reply to Mr CHAN Wing-chan's question on allowing departments greater flexibility in recruiting contract staff, SCS said that department heads at present had the authority to recruit staff on contract terms but the procedures involved had deterred some department heads from making greater use of this authority. The review of the appointment policy was undertaken with the aim of modernising the policy by giving more authority and flexibility to department heads to recruit staff to suit the operational needs of their departments.

20. The Chairman said that persons of high calibre might not necessarily be disinterested in joining the civil service on agreement terms. For example the Department of Justice had employed a number of its professional staff on agreement terms. He added that some employees preferred agreement terms of service because it offered them flexibility and they would receive a gratuity upon the expiry of a contract. He also pointed out that contract staff would not be overly worried about their contract not being renewed if they performed well.

21. Mr CHEUNG Man-kwong said that while recognising the merits of employing staff on agreement terms, he felt that the Government should strike the right balance between achieving an optimal mix of staff on permanent terms and staff on agreement terms on the one hand and ensuring a harmonious working relationship between the two groups of staff on the other.

22. SCS said that he shared the views expressed by the Chairman and Mr CHEUNG.

23. Mrs Sophie LEUNG pointed out that one of the key result areas set out in the booklet on "Management of the Civil Service" was to "modernise the policy and practice applicable to the management of the Civil Service". There was however no mention in the booklet of any new initiatives or measures that would be taken by the Government in this regard, except the organising of three large-scale seminars in 1999-2000 which would be attended by international speakers and participants from the private sector and other governments.

24. In response, SCS said that the comprehensive review of the appointment policy on pensionable, agreement and temporary terms being undertaken by the Government was a major new initiative to modernise the policy by making it more flexible to suit the needs of the departments. The review would include a review of the civil service pension system which had been in operation for some 150 years. The results of the review would have far reaching implications on the policy and practice in the management of the civil service.

25. Mr LEE Kai-ming said that the comprehensive review of the appointment policy and the review of the starting salaries in the civil service might result in the adoption of a new set of conditions of service which would include lower starting salaries, a new provident fund scheme in place of the existing pension scheme and simplified discipline procedures. He expressed concern that the co-existence of different conditions of service for existing and newly-appointed staff could create staff management problems. The Chairman added that from the staff's viewpoint, the existing pension scheme provided better retirement benefits and there might be staff resistance to the adoption of a provident fund scheme should the outcome of the review recommend the adoption of such a scheme.

26. SCS responded that the existence of different sets of appointment terms was not a new phenomenon as the Government had made changes to the conditions of service of civil servants from time to time. Given that the adoption of retirement schemes based on contributions from both employers and employees was a global trend, and having regard to the impending implementation of the Mandatory Provident Fund Scheme in the community, the Government considered that it was timely to review the existing pension system in the civil service. He further said that the Government had not yet decided on whether a provident fund scheme would be adopted, and he stressed that staff would be consulted should the Government decide to make any changes to the existing pension system. He added that it was the long-standing practice of the Government to apply revised conditions of service to newly-appointed staff and that serving staff would not be affected.

27. In reply to the Chairman, SCS said that overall reviews of civil service salaries were conducted in 1979 and 1989. In view of the lapse of 10 years since the last review, it was timely for another review of starting salaries in the civil service to be conducted. SCS stressed that the review had not been initiated in response to the current economic situation. In fact, CSB had proposed that the review be conducted before the occurrence of the Asian financial turmoil. He added that the outcome of the 1989 review was that the entry points of some civil service grades were adjusted downward whilst the entry points of some other grades were adjusted upward, depending on the recruitment difficulties of the grades concerned and the market rates of comparable jobs in the private sector at the time.

28. Mr CHAN Wing-chan expressed concern about the Government's ability to attract high calibre staff to join the civil service if the entry pay point was lowered. SCS said that the Government's pay policy was to offer sufficient remuneration to attract, retain and motivate staff of a suitable calibre to provide the public with an effective and efficient service. Such remuneration should be broadly comparable to that in the private sector. However, the Government would consider the impact of lower starting salaries on recruitment. Under the current economic situation, he was not too worried about recruiting good quality staff.

29. In reply to Mrs Sophie LEUNG, SCS said that the provision of training courses on crisis management was part of the civil service training programme organised by the CSTDI and was not therefore included as one of CSB's new initiatives in the booklet. He added that CSTDI had recently organised a training session on crisis management skills using the new airport opening as part of a case study. In response to the Chairman, SCS agreed to check if the video tape of the session could be made available to members.SCS

Promoting staff well being

30. Mr Ambrose LAU asked whether stress had become a serious problem in the civil service. He also enquired which departments and what types of jobs required counselling in particular. In reply, SCS said that a pilot scheme to provide civil servants with ready access to professional counselling services to help them cope with stress would be launched in response to a request made by the Staff Side of the Senior Civil Service Council last year. Given Hong Kong's hectic way of life, it was inevitable that some staff would feel that they were under stress. However, their stress might not be work-related nor very serious as to warrant treatment by a psychiatrist. Under the scheme, they could obtain professional counselling services. The purpose of providing professional counselling to staff was to promote their well being so as to enable them to perform better in their jobs. He added that the pilot scheme was modelled on the counselling scheme launched by the Post Office which had been well-received. CSB would conduct a review on the effectiveness of the pilot scheme before deciding whether the service should be expanded or established on a permanent basis.

(Representatives of the Administration left the meeting at this juncture)

II. Confirmation of minutes of meeting
(LC Paper No. CB(2) 421/98-99)

31. The minutes of meeting held on 21 September 1998 were confirmed.

III. Date of next meeting and items for discussion

32. The Chairman said that the following items, which were originally scheduled for his meeting, would be discussed at the next meeting on 16 November 1998 -
  1. Privatisation of services provided by the Housing Department - Its impact on staff; and

  2. Privatisation of services provided by the Water Supplies Department - Its impact on staff.
33. The Chairman further said that staff representatives of the Housing Department and the Water Supplies Department would be invited to attend the meeting to put forward their views.

34. Members agreed that the following items be put on the agenda of future meetings -

Item proposed by the Chairman
  1. Briefings by the Post Office and the Electrical and Mechanical Services Department on the staff situation in these two departments since their establishment as trading fund departments;
Item proposed by Mrs Sophie LEUNG
  1. Briefing by the Efficiency Unit on the implementation of the EPP;

Items proposed by Mr CHEUNG Man-kwong
  1. Prevention of double housing benefits for civil servants and staff employed in Government-funded bodies;

  2. Civil servants borrowing money from loan sharks; and

  3. Measures to achieve cost saving in Government departments and agencies.
35. Mr CHEUNG Man-kwong said that the revised system of declaration of investments by civil servants failed to plug the loopholes exposed by the former LegCo's inquiry into the departure of Mr LEUNG Ming-yin from the Government. He suggested and members agreed to discuss the matter further at the next meeting.

IV. Matters arising

Ambit of the Panel on Public Service
(LC Paper No. CB(2) 422-98-99(01))

36. Referring to the paper, the Chairman said that according to the Legal Service Division, there was no legal definition of the term "Government-funded public body". He invited members' views on whether the ambit of the Panel on Public Service should only cover conditions of service matters in the civil service and Government-subvented organisations.

37. In response to Mr CHEUNG Man-kwong, Assistant Legal Adviser 5 said that there was no general statutory definition of "Government-funded public body". However, statutory public bodies such as the Airport Authority (AA) could be regarded as Government-funded having regard to the fact that the Government was its sole shareholder.

38. Mr CHEUNG Man-kwong was of the view that the Panel on Public Service should monitor conditions of service matters in the AA and other statutory bodies such as the Mass Transit Railway Corporation and the Kowloon-Canton Railway Corporation of which the Government was the role shareholder. Mrs Sophie LEUNG echoed Mr CHEUNG's view.

39. Assistant Secretary General 2 (ASG2) said that it was up to Members to decide whether the Panel's scope of work should be expanded to cover the monitoring of conditions of service matters in AA and other statutory public bodies. She pointed out that apart from handling civil service matters which formed the major part of its work, the Panel had only dealt with conditions of service matters in subvented organisations on three occasions and had never dealt with such matters in public statutory bodies such as the AA. Hitherto, conditions of service matters involving the AA had been dealt with by the Panel on Economic Services. An example of this was the integration arrangements for staff in the Airport Management Division of the Civil Aviation Department into the AA, which was discussed by the Panel on Economic Services in December 1995. A more recent example was the extension of the Home Financing Scheme to the tertiary institutions which was discussed by the Education Panel.

40. ASG2 further said that the Panel on Public Service was originally named as the Panel on Civil Service and tasked to monitor civil service matters only. In November 1988, Members of the former LegCo agreed that the terms of reference of the Panel on Civil Service should be enlarged to cover the subvented sector (hence the addition of "Government subvented organisations" in its terms of reference) and that the Panel be re-named as the Panel on Public Service. The revised terms of reference had been in use until October 1994 when "Government subvented organisations" was replaced by "Government-funded public bodies". However, the reason for such revision could not be traced.

41. Mr CHEUNG Man-kwong said that he had no strong views that conditions of service matters in statutory public bodies should be monitored by the Panel on Public Service, so long as there were other Panels to monitor such matters.

42. The Chairman suggested that if members wished to discuss conditions of service matters in statutory public bodies, the relevant Panels would be requested to arrange joint-Panel meetings. Alternatively, the relevant Panels could invite members of the Panel on Public Service to attend their meetings. Members agreed.

43. The meeting ended at 12:25 pm.

Legislative Council Secretariat
11 November 1998