CO129-623-8 Estimates of Expenditure- includes a report for the year ending March 1951 1-12-1949 - 31-3-1951 — Page 15

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department; this unified control is expected to produce some saving.

(ii)Although we have approved the amalgamation

of the Departments of Agriculture, Fisheries, Gardens and Forestry and the Fisheries and Vegetable Marketing Organisations these departments are still shown separately in the Estimates. Re-organisation is however going abead by administrative action.

(iii) More sodium lights are to be provided for

Kai Tak Airport.

(iv)

A considerable school building programme

is provided for. Fees in Government schools which have not been altered since 1931 are to be increased; besides producing increased revenue this should also reduce Government expenditure in grants to grant-aided schools whose fees are the same as those in Government schools and whose grants

cover

working losses.

Work on a tuberculosis clinic in Kowloon

is to start soon and improvements are to be carried out at La Chi Kok Hospital.

(+)

(vi)

An up-to-date fire float is being provided

for the Marine Department.

(vii)

An increase of nearly 400 in the strength

of the Police Force is provided for this is necessary owing to the unsettled conditions. The Force is now 4,500 strong. The building of new police quarters is also provided for and an emergency camp is to be erected.

(viii) The building of a new block of central

Government offices at a cost of $8 million is provided for; this is expected in the long run to save money by reducing the rent at present paid by Government for office accommodation.

5. With regard to loan expenditure the Governor points out that owing to interruption of through traffic to Canton on the railway certain orders have been cancelled and this has released loan funds for re-allocation. $8 million has been earmarked for the Deep Bay Airport and some expenditure has already been incurred but the Governor adds that when work at the airport starts in earnest it will be necessary for Hong Kong to draw on the interest free loan promised by H. M. G. under the 1948 financial settlement.

6. The Governor refers to our suggestion (see (5) opposite) that some portion of loan advances should be set off against surplus balances and promises a further despatch on this subject. He goes on to point out that all but about $60 million of the surplus balances of about $150 million will be committed by the end of the year 1950/51 and that in these circumstances it is impossible to finance from

/revenue