XN000022-1987-05-11 — Page 3

2

MONDAY, MAY 11, 1987

MISS CHUNG SAID THAT THE STANDARD COST SYSTEM HAD LED TO SUBVENTION SURPLUSES ACCUMULATING IN AGENCIES' ACCOUNTS UP TO 1985-86 BUT SOME MODIFICATIONS TO THE SYSTEM LAST YEAR HAD +MORE OR LESS SOLVED THE PROBLEM AND SO REMOVED AN OBSTACLE TO MORE SERVICES BEING SUBVENTED ON THE BASIS OF STANDARD COSTS+.

THE WORKING GROUP ALSO CONCLUDED THAT THE PRESENT SUBVENTION SYSTEM HAS IMPORTANT FEATURES WORTHY OF RETENTION, NAMELY, THE CATEGORISATION OF SERVICES FOR FUNDING PURPOSES, THE SETTING OF NOTIONAL STANDARD STAFFING LEVELS WHERE POSSIBLE THE FLEXIBILITY FOR AGENCIES TO OPERATE WITHIN SUCH PARAMETERS, TO RAISE FUNDS TO IMPROVE SERVICES AND TO PLAN WITH CERTAINTY ABOUT SUBVENTION LEVELS AND THE EMPHASIS BY THE GOVERNMENT ON MONITORING SERVICE DELIVERY. A RETURN TO THE DISCRETIONARY GRANT SYSTEM OPERATING BEFORE 1982-83 WOULD THEREFORE BE INAPPROPRIATE.

THE WORK ING GROUP HAS RECOMMENDED THAT THE MODIFIED STANDARD COST SYSTEM SHOULD BE EXTENDED TO OTHER SERVICES FOR WHICH STANDARD COSTS CAN BE ESTABLISHED AND THESE WERE LIKELY TO INCLUDE CHILDREN AND YOUTH CENTRES, HOMES FOR THE AGED, HOSTELS FOR THE AGED, RESIDENTIAL CRECHES, RESIDENTIAL NURSERIES AND SOCIAL CENTRES FOR THE ELDERLY.

MISS CHUNG SAID THAT +THIS WOULD STILL LEAVE MOST SUBVENTED WELFARE SERVICES FUNDED UNDER THE MODEL SYSTEM UNDER WHICH SUBVENTIONS ARE BASED ON PREVIOUS EXPENDITURE ADJUSTED FOR PRICE INCREASES+.

+THIS IS RATHER UNSATISFACTORY AS A LONG TERM SOLUTION AS THE MODEL SYSTEM WAS INTENDED ONLY AS A STOPGAP MEASURE WHILE THE STANDARD COST SYSTEM WAS BEING IMPLEMENTED AND IT PERPETUATES DIFFERENT SUBVENTION LEVELS ESTABLISHED OVER THE YEARS FOR SIMILAR UNITS WITHIN THE SAME SERVICE+.

THE WORK ING GROUP EXAMINED OTHER SUBVENTION SYSTEMS AND CONCLUDED THAT THE SYSTEMS IN THE EDUCATION AND MEDICAL SECTORS ARE UNSUITED TO THE SOCIAL WELFARE SECTOR.

HOWEVER, THE WORKING GROUP ALSO CONCLUDED THAT THERE ARE MERITS IN REPLACING THE MODIFIED STANDARD COST SYSTEM WITH A SYSTEM SIMILAR TO THAT USED IN THE CIVIL SERVICE TO MEET STAFF SALARY REQUIREMENTS, BUT SUCH A SYSTEM CANNOT BE IMPLEMENTED WITHOUT CONTROLS AND COMPUTERISATION OF PAYROLLS.

MISS CHUNG SAID THAT SUCH A CHANGE WOULD REQUIRE A DETAILED FEASIBILITY STUDY INVOLVING THE TREASURY, THE SOCIAL WELFARE DEPARTMENT AND THE SUBVENTED WELFARE SECTOR+.

THE WORKING GROUP ALSO RECOMMENDED THAT STAFF SALARY SUBVENTIONS SHOULD BE RELEASED TO AGENCIES MONTHLY INSTEAD OF QUARTERLY AS AT PRESENT AND THAT CLAW-BACK OF INTEREST ON UNUSED SUBVENTIONS SHOULD BE DISPENSED WITH.

THE WORK ING GROUP'S REPORT WOULD NOW BE SENT TO THE HONG KONG COUNCIL OF SOCIAL SERVICE FOR COMMENTS BEFORE BEING CONSIDERED BY THE SOCIAL WELFARE ADVISORY COMMITTEE IN JUNE.

13