actually paid, would be required to meet the difference between the actual fee income and the fee income arising from 100% enrolment. Taking into account overpayments under the system of subvention prior to September 1982, the day nurseries had accumulated surpluses amounting to nearly $10 million as at 31 March 1984.
87.
The subvention is paid as a lump sum and there is no provision for the recovery of any surplus. The Director of Social Welfare has endeavoured to minimize the level of accumulated surpluses by authorizing lower levels of fee increases when such applications are made by the day nurseries, but this does not appear to be a proper course of action to take as the lower level of fees provides unintended subsidies to the parents of children attending those nurseries who are not eligible for fee assistance. In my opinion, since the 5% subvention is the cause of the surpluses and is paid for the sole purpose of catering for cash-flow problems, it should be paid only when genuine cash-flow problems are encountered. I have therefore suggested to the Director of Social Welfare that, in view of the high demand for day nursery places, consideration should be given to withdrawing the existing subvention and replacing it by an advance of the same amount which would be replenished in case of shortfalls in enrolment after taking into account the day nurseries' own resources. This would cater for any cash- flow problems encountered by the day nurseries and avoid public funds being spent unnecessarily.
88.
Social welfare grants to voluntary organizations and trusts for the fitting out of welfare premises in public housing estates (financed from the Lotteries Fund). With an increasing proportion of the population living in public housing estates, there has been a corresponding increase in the demand in these estates for the provision of social welfare services of which the more important ones are children ånd youth centres, nurseries, social centres for the elderly and hostels for the elderly. To provide such services, the Housing Authority normally sets aside a number of units in each estate for allocation to voluntary social welfare organizations. Funds for the fitting out of these premises are provided from the Lotteries Fund and, with certain exceptions, authority to approve allocations from the fund has been delegated to the Director of Social Welfare acting on the advice of the Subventions and Lotteries Fund Advisory Committee.
89.
In recent years, there have been increasing delays in the fitting out of premises in public housing estates and the bringing into operation of the welfare services concerned. The target of the Director of Social Welfare is to have the services operating no later than six months after the completion of an estate, but this target has rarely been achieved. In 1981 it was reported
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