CONFIDENTIAL
UK/HONG KONG JOINT FUNDING SCHEME
1. The Hong Kong Government have asked us to increase our
contribution to the Joint Funding Scheme (currently £2 million) in
line with inflation. This would cost £100,000 if the increase was
announced for FY 1990/91; and about £200,000 if it took effect from
1991/92.
2. The UK/Hong Kong Joint Funding Scheme (like other fee support
schemes for Malaysia, Cyprus, Bermuda and the Cayman Islands) was
established in 1983/84 when full cost fees were introduced for
overseas students. The scheme is designed to offset the difference
between the "home" and "overseas" tuition fee for Hong Kong students
reading for first degrees in British universities. There is still a
severe shortage of university places in Hong Kong. HMG and the Hong
Kong Government each contribute £2 million per annum to provide
grants for eligible students. The scheme is means-tested. Most of the beneficiaries live in public housing estates with a relatively
low disposal income. Since 1983/84 the number of Hong Kong students
coming to the UK under this scheme has risen from some 1,200 a year
to around 1,600 a year.
3.
Inflation has eroded the value of the sums originally committed
to this project by HMG and the Hong Kong Government. Because of
inflation and increased numbers assisted under the scheme, a loan
element was introduced for the first time in 1987/88 and now
accounts for 25% of total assistance. The loan element is likely to
increase even further because of inflation. On current trends it
will rise to 30% in 1990/91 and 38% in 1991/92.
4. When the Executive Council considered the Scheme in late
January, they expressed concern that the objective of the scheme would be undermined if the amount of grant available to each student
decreased any further and the loan element came to predominate. The
Hong Kong Government have therefore asked if HMG's contribution
could be increased at least to take account of inflation.
Kong Government would be prepared to match any upward adjustment
that HMG is prepared to make.
The Hong
ASHACQ
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CONFIDENTIAL