faxed
to Ms Bertion t
"H- Wooton MG, "/"1
From:
J N Elam
Cultural Relations Department
Date:
11 November 1993
113
7.09
Mrs Barnes-Jones HKD
HONG KONG CONSULATE GENERAL : BRITISH COUNCIL CONTRIBUTION
1. I promised to let you have in writing the comments I gave you over the telephone on your minute of 8 November to Ms Lewis. The points I made were these:
2.
When the Treasury say they require to be satisfied that the deal will not have the effect of increasing the British Council's grant-in-aid or amount to a subsidy from the DW to the Council's non-grant-in-aid activities, they are making one point, not two. They want to be assured that the deal does not deliver a hidden subsidy to the British Council, whether to its revenue-earning activities or to its grant-in-aid activities. Since both are conducted from the same premises, any rent subsidy would actually benefit both.
3.
You feel that the Council are getting a subsidy nevertheless, not in terms of money but in terms of space, and they might in time be able to earn more because of the extra space. I think you might reasonably regard the space as necessary inducement to the Council to get them to move to the new premises in circumstances that involve some commercial risk. If things go well and their business expands, they may make more profit from the space - or the expansion may take place elsewhere, in the New Territories for example. Rather than making their future rent dependent on the usage of the space, I think you might seek to make it dependent on the Hong Kong market for rented property by proposing a rent review at as early an interval as local practice and conditions allow for long-dated leases.
for
J N Elam
11.11HKG.CG