M. Hum
CONFIDENTIAL
Reference.
itsch jus
(38)
Mr Galsworthy
Hong Kong Department
FUTURE OF HONG KONG; TEST OF ACCEPTABILITY; FINANCIAL IMPLICATIONS; YOUR MINUTE OF 7 AUGUST
1. As you are no doubt aware projected overspend of the FCO cash limit for the financial year 1984/5 is of the order of £16m. It is therefore impossible to find even relatively small sums of money without constraining activities in other areas of foreign policy. As the Secretary of State has pointed out to the Chief Secretary we have no margin for making savings in administrative and support functions. We can only obtain resources by discontinuing areas of core activity. I would be grateful to know what savings you foresee in your area of responsibility which might be used to pay for the monitoring exercise. I note that the cost to the FCO of the mission in Hong Kong in 1982/3 was approximately £1.75 m of which accommodation accounted for nearly £1m.
2.
As I understand it Treasury approval of the level of fees for the monitoring team is required only if that fee is above the salary of the equivalent Civil Service rank to Grade 4 (£89 per day). I assume from paragraph 3 (i) that this equivalence is Permanent Se cretary. The salary point for comparison for the 2 month period would therefore be at least £42750 or £3500 per month and possibly £48,000 or £4,000 per month and equivalent Hong Kong dollars at todays rate 35875 to 41,000. I have consulted PPD and consultation will clearly be necessary with Treasury.
3. I find as you do the estimates of accommodation and subsistence to be excessive. Class A subsistence in Hong Kong is at present $720 per day and those receiving it are expected to meet their own hotel bills. Conference rates, which, subject to the views of PSD, might be the most appropriate system would therefore mean that the monitor drawing grade A subsistence would receive $360 and that his bill at the hotel for room and breakfast would be met directly.
4.
Again PSD may have views but there are strong objections of precedent to paying for monitors wives to accompany them. Under standing procedures there is discretion on a very limited basis for the Permanent Under Secretary and senior DUS's to take their wives where they can make a significant contribution to the sucess of a mission but otherwise the practice is generally frowned upon if not forbidden.
5. It is not clear from your minute, whether you are certain that any expenditure will fall within this financial year. We cannot carry savings forward and it would be a pity to hold a post vacant to pay for the monitor only to find the money returned to Treasury and to have to do it again next year!
CODE 18-77
HP 4/83
10 August 1984
cc: Mr Morris, PPD
Mr Masefield, PSD
CONFIDENTIAL
MKK04046
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13 AUG 1984
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