Foreign and Commonwealth Office London SW1
10
file
M D A Clinton Esq CMG GM
Deputy Colonial Secretary Colonial Secretariat HONG KONG
Telephone 01-
Your reference
Our reference
Date
HKK 1/18
6 July 1973
Dew Tike
MCKINSEY REPORT
1. When I was in Hong Kong Peter Lee gave me on your behalf his predictions of the new Secretaries. Some of these have now been confirmed. Have you decided on the rest yet?
2. You kindly provided a copy of the first McKinsey volumes. Do you by chance have a spare copy of the latest one, on which the definitive proposals for the Secretariat are based?
3. I am sorry to sound intrusive, but, as you can imagine, all this is of considerable interest here.
Yours cuer,
в нек
Copied 1 HICK 1/5
A C Stuart Hong Kong & Indian Ocean Department
;
SOUTH CHINA MORNING Post
JUNE 7th
73
T
McKinsey
report worth it
- Clinton
Hongkong will benefit from the McKinsey Report twice as much as it has spent on it, according to the Acting Colonial Secretary, Mr M. D. A. Clinton, yesterday.
**The management consultants have indicated how, in one particular activity, performance can be improved so as to produce cost benefits of about double their fees incurred so far.
"I have no doubt that application of their concepts in other fields will produce similar improvements in cost- effectiveness," he said.
At a Legislative Council meeting, Mr Clinton also gave an outline of the work which had involved McKinsey and Company, who were engaged to streamline Government processes and procedures.
Apart from the main report tabled in the Council two weeks ago, they have produced a 10- year programme plan for the Medical and Health Department, a long-term personnel strategy for the rank and file of the Royal Hongkong Police and a long-term programme plan for the development of secondary education.
They have also studied specific areas and problems in the Public Works Department, the Urban Services Department and the Colonial Secretariat.
"I would not like to deluge members with these various reports, plans, studies and assessments but the volume of paper produced is substantial.
"The medical programme plan, for example, is more than 100 pages," Mr Clinton said.
A new formula for reviewing police pay, largely based on the Management Consultants recommendations, is now being drawn up as 8 matter of
urgency.
However, the Acting Colonial Secretary, Mr M. D. A. Clinton, added that he would not "go so far as to say at this stage that a futther revision is contemplated.”
RECEIVED IN RTG TRY No. 31 19 JUNWO
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| REGISTRY N.1 -& JUN..S
NUKKI/18
MAY 26th 173
$3m SPENT FOR ADVICE
WE HAD FREE
THE Mckinsoy foam has mado como vory good proposals to Covernment at the cost of nearly $0 million to tho taxpayor.
Dut most of theso proposals wore medo by officors within the Govornment years ago.
This was disclosed to The STAR by Public Watchdog No. 1, the Director of Audit Mr P. T. Warr.
"Advice given gratis (free) is often not acceptable.
"Also it is fashionable to employ experts these days,” Mr Warr said.
He compared it with the attitude of people towards free medicine from the National Health Scheme and 'paid expensive treatments 'from expensive doctors.
"It is much more accep. table, in fact you are bound to act on advice you have paid for," he said.
"I will say that the McKinsey proposals are very sound and if followed will definitely speed up the work of Government.
"But let it not be said that we in Government are fools and these weaknesses pointed out by the McKinsey team have been ignored by us.
Power
"We made proposals for more cost accounting and greater delegation of power with other department heads nearly six years ago," he said giving specific instances from published reports of the late 1960's.
On relating Mr Warr's views to the McKinsey boss in Hongkong Mr__Roger Holland, The STAR got a spirited defence of the money spent on the report.
•
"We are aware that some
Treasury kad
the answers long ago...
put."
HONGKONG'S Accoun- tracting company backing tant
General Mr D.W.A.Blye today spoke out in defence of the Treasury and other departments against whom there might have been some criticism im- plied" in the McKinsey report.
"The McKinsey proposals, like computers for waterworks billing are sound, but we have been aware of them for years.”
"We started work on the
waterworks computer billing in 1966 but the project was delayed because of the con-
X
"We have since started and prepared a much bigger property tax with 11⁄2 million for rates and computer demand notes.
"All this was started long before the McKinsey team was heard of in Hongkong.” Mr Blye said.
"We have not been just sitting around,”
"All department heads sent up proposals over the years but the McKinsey team has crystalised them cen- trally," he said.
of these suggestions were made carlier but perhaps some of the other suggestions made earlier were not so good," Mr Holland said,
"Part of our function is to act as a filter,” he said.
He insisted that people from the outside had a better chance to investigate and come up with suggestions to improve the machinery of government.
While admitting that "peo- ple here in Government given the same opportunity as us could have come up with the sume report", he insisted it would have been difficult because of their local bias to their own department and problems of rank.
“I think it was money well spent,” he said.
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