XN000022-1995-10-10 — Page 2

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New funding arrangements for ESF schools

The Governor-in-Council has approved a government working group's (WG) recommendations that subsidies to the English School Foundation (ESF) schools should be brought into near complete parity with local schools, Deputy Secretary for Education and Manpower, Mr Kevin Mak, announced today (Tuesday).

Under the new arrangement, recurrent subsidy for ESF schools will be calculated according to the number of classes instead of cost per capita, with adjustment to be made to take account of the difference in class size between ESF and local aided schools.

In line with the practice of the aided sector, the capital subsidy for ESF schools will be based on 100 per cent of the construction cost of a standard local aided school, adjusted downwards to take account of the smaller enrolment in ESF schools plus a professional fee and related cost.

Mr Mak said the review was conducted to address concerns that the Government provided higher per capita subsidy for ESF students and better capital subsidy arrangements for ESF schools.

"The WG examined in detail the existing arrangements which were based on the recommendations made by a committee appointed in 1980 to review the application of the parity of subsidy principle.

"It found that the rationale behind some of them has become out-dated and changes are needed to achieve a closer parity of subsidy," Mr Mak said.

At present, the unit subsidy for ESF schools is in general higher than that for aided schools mainly due to the grossing-up factor, a bigger salary grant and the hardship grant.

Based on the recommendation of the WG, the Government has decided to remove the current grossing-up factor but retain the hardship grant in calculating the new recurrent subsidy. There will not be any changes to the salary grant.

Mr Mak said the existing grossing-up factor of 17.6 per cent was intended to provide for a much greater fluctuation in the number and distribution of pupils attending English speaking schools compared to other public sector schools.