GOVERMENT HOUSE HONG KONG.
WED 14 APR 93 69:36
PG.07
SECRET
©
1993-94 appropriations.
5.
HQBF will therefore need to make very substantial savings in 1993-94 if it is to have any hope of staying within the 1993-94 provision. In practice, the problem is likely to roll forward into 1994-95. However, it is essential that sufficient savings are achieved in that year to close the gap entirely and ensure a smooth declining cost profile from now to 1997.
6.
The Governor discussed the problem with Mr Rifkind in January. The note of the meeting is at Tab B.
Correspondence with FCO
7.
The Governor wrote to FCO on 2 March setting out the problems on garrison withdrawal and defence costs and seeking support for an approach to MOD (see telegram at Tab C). FCO's response is at Tab D. They advised waiting for Mr Rifkind's letter on the 1993 MOD review (see paragraph 2 above) before any approach to MOD. In the meantime, Sir T Daunt has taken up the question of costs with MOD and stressed the need for greater transparency and the need to show a declining trend in costs (see Tab A). We have indicated to FCO that we will pursue the issue of short- term savings and cuts in support costs separately and ahead of the review.
Examples of conspicuous consumption
8. CBF has written to S for S on the examples of conspicuous consumption (MOD visits and purchase of cars) which the Governor raised with Sir C France when the latter visited Hong Kong and which have also been raised by Sir T Daunt with MOD. A copy of the letter and S for S's reply are at Tab E.
SECRET