unicipal Services said that assessment of individual market stalls to rates would have been a very big, difficult and costly exercise, given that there were about 8,000 market stalls in the urban area and about 4,500 in the New Territories and that the procedures had to allow for objections and discussion. The Secretary estimated that it would take five years to achieve a net gain to Government revenue.
6.52 The Secretary for Municipal Services said that the Urban Council had recently decided to revise market stall rentals with a view to narrowing the gap between the actual rentals charged and the current market rentals as assessed by the Commissioner for Rating and Valuation. Very substantial increases would take effect on 1 January 1987. Despite the legal position, no Urban Council markets had been assessed to rates since 1904 when the first Urban Council market had been opened. The likely result of an assessment to rates was an appeal by stall holders to the Urban Council for a commensurate reduction in the stall rentals. In that event the Secretary's personal opinion was that the Urban Council would have no alternative to conceding. The gain to the Government revenue was thus likely to be fully offset by a reduction in Urban Council revenue. The Council's priority was to reduce the present subsidy on market operations. A successful rent revision would produce additional revenue to the Council of over $10 million in the first year and more in subsequent years.
6.53 The Urban Council market stalls differed from the Housing Authority stalls. Unlike the former, the stall holders of the latter had known that they would be liable to rates before they had moved in. Market stalls in public housing estates were licensed as individual fresh provision shops and put to open tender on a commercial basis, whereas the Urban Council markets were declared as public markets and let on restricted tenders with the aim of resiting hawkers off the streets. From the Urban Council's point of view, it was more cost-effective to have the rental revision smoothly carried out. It was simpler, more realistic and more commensurate with the general situation to exempt the market stalls from rates.
6.54 The Commissioner of Rating and Valuation said that the Urban Council had obtained an opinion on the legality of placing a block rating on the Council's markets. The opinion had been that the Council were not in paramount occupation and therefore could not be assessed. The Council had always believed that rating was a matter between the individual stall holder and the Government.
6.55 The Deputy Financial Secretary was convinced that the law should be amended. There was no point in trying to apply the present law and wasting a lot of money to pick up a small amount of revenue, much of which would go back to the Urban Council anyway. The Council could pick up a great deal more simply by increasing the rents.
6.56 Conclusions and Recommendations. The Committee note that the Commissioner of Rating and Valuation had drawn the attention of the Secretary for Municipal Services to his statutory duties to assess market stalls to rates. The Committee believe that the Commissioner of Rating and Valuation has acted entirely properly.
6.57 The Committee also note that there are practical and political difficulties in making such assessments and that there are doubts whether the exercise will be cost-effective.
6.58 The Committee conclude therefore that the present position, whereby there is a legal requirement to assess market stalls to rates on the one hand and there are practical and political difficulties on the other, is wholly unsatisfactory.
6.59 The Committee recommend that carly action should be taken either to amend the Rating Ordinance to exempt the Urban and Regional Councils' market stalls from assessment to rates or to make the Urban and Regional Councils liable for the payment of rates by way of block assessments.
6.60 The Committee also recommend that early action be taken to determine whether the market stalls in the temporary wholesale markets which are managed by the Agriculture and Fisheries Department should be assessed to rates in the normal manner or whether the Rating Ordinance should be amended to exempt such market stalls from assessment to rates.
6.61 The Committee wish to be informed of the decisions taken and the subsequent progress in these matters.
6.62 Paragraphs 67–71. Value for money studies conducted by the Finance Branch of the Government Secretariat. The Deputy Financial Secretary said that value for money studies between October 1985 and April 1986 had achieved savings of $158 million and a reduction of 688 posts, the staff concerned being redeployed or retired. He believed that many of those affected had been Model Scale 1 staff who had already reached or passed the normal retiring age. The Deputy Financial Secretary:
agreed to provide a written analysis showing the effect of the savings on the bottom line of departmental votes;
said that the practice of setting up departmental steering groups had been invaluable in securing the support of departmental staff in the execution of value for money studies. Such groups had fostered a productive team spirit involving the Controlling Officer and the Finance Branch working together;
steering groups had already been set up in 7 departments and were planned for a further 32 departments by the end of March 1988. Before this could be done, two extra D1 posts in the Finance Branch would be required. He hoped that these would be agreed soon;
pending the creation of these additional posts and the consequential internal re-organization of the Finance Branch he would concentrate on the 15 studies in hand rather than taking on new studies; and
in establishing new steering groups, priority would be given to departments where there were the greatest opportunities for savings. Once established steering groups would continue in operation.
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