TNAG-1415-FCO40-1896-Public-finance-in-Hong-Kong-1985 — Page 141

75.

Social welfare subventions to voluntary

organizations and trusts for recurrent expenditure (financed from Head 172 - Social Welfare Subventions. Subhead 410. Rehabilitation services (grants) and Subhead 411. Social welfare services (grants)).

The

76.

Standard cost subvention system. In paragraphs 91 - 93 of my report for the year ended 31 March 1983 I noted that the year 1982-83 saw the introduction on an interim basis of the standard cost subvention system for social welfare services. Under this system, subventions would be calculated according to a new formula, and whilst any savings which arose under the system would not be "clawed back", voluntary organizations would be expected to provide the services required at certain standards. My review of the outreaching social work service, one of the services subvented under the new system, indicated significant under-strength of the outreaching social work teams which had led to an accumulation of savings from subventions by the voluntary organizations concerned. savings were estimated at $2.5 million for the year 1982-83, and I recommended that the appropriate amounts should be refunded to the Government because it was self-evident from the level of understaffing that the services required were not being provided at the standards envisaged. The Director of Social Welfare subsequently informed me that with effect from 1984-85 the outreaching social work service would be temporarily removed from the standard cost subvention system until the staffing improved to an acceptable level, that subventions for the service would be assessed on the basis of the individual requirements of the outreaching social work teams, and that surpluses accumulated during 1982-83 and 1983-84 would be used to offset the subvention required for 1984-85. I have recently conducted another review of the standard cost subvention system and it seems that the operation of the system is still beset by the problem of surpluses.

77.

The standard cost subvention system was introduced in October 1981 when the Finance Committee of the Legislative Council approved a revision in the system for subventing certain voluntary organizations and trusts which provided social welfare services and facilities, replacing the previous system of discretionary grants. The general principles of the new system are: