TNAG-0269-FCO40-305-Reform-of-local-government-of-Hong-Kong-1970 — Page 16

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Mr. Laird

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HKvi. 18

The

Reference...

19

Hong Kong Local Government

,

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Mr. Royle's draft record of his talk with the Governor on '11 October said (para. 7) that the latter arranged for the officer dealing with local government revision to explain the outstanding problems in fuller detail at Mr. Royle's final meeting before leaving Hong Kong.

2.

This was done by the officer concerned (Mṛ Lightbody). The following are points I noted the

discussion:-

fou

(a) The main matters to be settled were concerned

with the financing of the Council's expenditure;

(b) it was envisaged that the Council should

meet its recurrent expenditure from an allocation to be made to it from the rates raised by the Central Government on lands and buildings (these are at present in the main urban areas charged at 17% per annum of ratable value).

(c) the Council would be free to raise additional

revenue for recurrent services through licence fees etc.;

(a) the exact split of the yield of rates between

Central Government and Urban Council will have to be determined;

(e) while it was thought the Council should finance

capital expenditure by borrowing, the Central Government will probably have to underwrite the loans.

(f)because the Legislative Council would have to maintain control of fixing rates and because of the loan procedure envisaged (see (e)), the Legislative Council would have to retain responsibility for approving the Council's budget but the object would be to exercise control on general policy and not control in detail,

(g)a decision had still to be reached on the

powers of virement to be given to the Council: this affected the extent to which Legislative Council would have to be consulted;

(h) the powers of the Council would be more closely

defined than at present. Some powers would be mandatory, others would be optional. The present powers would not be significantly increased;

(i) the Council could employ its own staff or

use Government staff ‚e.g. the P.W.D. as

/its......