TNAG-0316-FCO40-352-Reform-of-local-government-of-Hong-Kong-1971 — Page 140

CONFIDENTIAL

4

MAN 4.

These recurrent calculations are based on the

following assumptions -

?

(1) that U.S.D. and Urban Council staff will continue,

at least initially to be Government employees, seconded to the Council's service. The Council will be required to meet the cost of wages and salaries for all such staff, plus an appropriate on-cost (which might be about 26 but would be variable), to cover the cost to Government of quarters, leave, pensions, passages etc. Not to charge on-costs would discourage staffing economies by the Urban Council, would conceal the true cost of services and would distort costings when comparisons were being made of savings that might be achieved by mechanisation. The door would be open for the Urban Council at a later stage to propose taking over complimenting and appointments.

(2)

that income from the operation of se: vices which are

a statutory responsibility of the Urban Council should accrue to the Urban Council (e.g. income

from abattoirs); where the fees charged for these services include an element designed to pay for building and land costs, then Government will charge the Urban Council an annual rental to meet these costs (as well as any other costs incurred by Government). For carparks built by Government (the provision of which is not a statutory duty of the Urban Council) fee income would accrue to Government, with a management fee paid to the Urban Council to cover their operating costs. On this basis revenue and expenditure for abattoirs has been included in the Table, and for carparks, excluded.

CONFIDENTIAL

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