It is intended that, if the new arrangements are approved, the Government school buildings complete with their furniture and equipment should be handed over to the ESF as from the beginning of the next academic year in September 1979. It is also proposed that the quarters provided for those teachers who are eligible for quarters by their terms of service should be transferred to the ESF as part of the package. Since the quarters occupied by these teachers are scattered throughout a large number of blocks owned or leased by Government, it' is considered appropriate that the Government should finance the capital cost of sufficient new quarters to accommodate the teachers required for manning those schools, retaining the existing quarters for use by other eligible officers, This would entail the allocation of existing blocks where available or the granting of a site or sites by private treaty at nil premium, together with a grant to cover the construction costs. 85 flats would be required and the cost of building new flats of the type required has been estimated by the Director of Public Works at about $23.5 million. No further assistance towards the provision of quarters would be provided thereafter.
14
The interim period before the new quarters are completed would be covered in general by the former Government teachers being allowed to remain in their present quarters for a period of time or being paid a rent allowance in lieu, and by re- placement teachers being paid a rent allowance (based on private tenancy rates) by Government. The total number of quarters or rent allowance provided by Government during this interim period would be the actual number of teachers needing to be housed, subject to a ceiling of the maximum number eligible for housing under the ESF rules.
15
Honourable Members will note that the proposal to transfer 85 flats to the ESF (or the financial commitments towards Jthis building) and the interim arrangement for the continued
housing of the teachers in the transferred government schools in Government quarters represents a hidden subsidy. This could be said to contravene the parity of subsidy principle. However, unless this was done on a once for all basis, it would be difficult for Government to divest itself from the direct running of English- speaking education. It would be unreasonable to expect the ESF to shoulder immediately the burden of housing the former government teachers without any transitional arrangements.
C.S. 166
CONFIDENTIAL