25. In 1980, when considering the level of fees for the 1981-1984 triennium, the Government proposed to follow the procedure adopted by the British Government of giving general guidance to the University Grants Committee on the level university fees it should assume for the purpose of calculating its grants to the universities. The approval of the Exeive Council was therefore sought in June 1980 for the introduction of a new arrangement under which the University and Polytechnic Grants Committee would be asked to assume certain fee levels in the calculation of grants for the 1981-1984 triennium and to notify the institutions of the assumptions. The institutions could then decide what fees they should actually charge their students. In the submission to the Executive Council it was stated that the new arrangement had been agreed with the two universities and it was proposed that fees for new students should be revised so that the fee level assumed for grant purposes for the final year of the triennium would be equal to about 10% of the projected recurrent expenditure at 1979–80 prices. This was approved by the Governor in Council but the Executive Council were not informed that the Government had previously set a target that fee income should equal at least 12% of recurrent expenditure. In addition to approving the new arrangement it was also decided that henceforth there should be an annual declaration of fees to be charged in four years' time so that students enrolling for a course of four years or less would be aware from the date of enrolment of the fees payable throughout the course.
26. In 1982, whilst considering a proposal to increase university and polytechnic fees to bring the average contribution towards costs to a level very considerably above 10%, the Executive Council were informed that not since 1965–66 had the fees at any institution met more than 10% of recurrent costs, and the 1981–82 fee levels at the University of Hong Kong and the Chinese University of Hong Kong represented only 3.8% and 5.8% respectively of recurrent costs. The Council subsequently noted the Government's suggestion that the proportion of recurrent costs met by tuition fees should be increased gradually, and this became the basis for determining fee levels to be assumed in the calculation of grants from 1985-86 onwards.
27. Although fee levels up to 1988–89 have been determined with the aim of increasing gradually the proportion of recurrent costs to be met by tuition fees, due to the problem of keeping pace with inflation, by 1988–89 the proportions of fees to recurrent expenditure for the University of Hong Kong and the Chinese University of Hong Kong are expected to improve only marginally to 6.5% and 7.3% respectively. The proportions of fees to recurrent expendidture at the other institutions of higher education are expected to be somewhat higher. By 1988–89 the fee income of the Hong Kong Polytechnic as a proportion of recurrent expenditure is expected to be 10.8%. The corresponding proportions for the City Polytechnic of Hong Kong and the Hong Kong Baptist College are expected to be 7.9% and 12.1% respectively.
28. In March 1986, the Executive Council were informed that the Government would review the working of the current arrangement, particularly the requirement to make an annual declaration of fees four years in advance and the need to set a target percentage of fee income as a proportion of recurrent costs, and would submit the results to the Council in October 1986. In this context I have recently invited the attention of the Secretary for Education and Manpower to the fact that the target laid down in 1973, for fee income to equal at least 12% of recurrent expenditure, seems to have been overlooked and that, despite the introduction in 1969 of the student finance scheme, fees have never regained their former proportion to recurrent expenditure, with the result that the more wealthy students have continued to be subsidized unnecessarily at the expense of public funds. I understand that the Secretary will take this into account before submitting his proposals for policy approval.
29. Head 2 – General Rates.
30. Non-assessment and delay in assessment to rates of properties vested in the Vocational Training Council. Under Section 21 of the Vocational Training Council Ordinance, the Vocational Training Council is not the servant or agent of the Crown and does not enjoy any status, immunity or privilege of the Crown. A recent audit review of the properties vested in the Council revealed that:
—there was a delay in assessing five technical institutes to rates;
the Seaman's Training Centre of the Council at Little Sai Wan had not been assessed to rates; and
-no rates demands had been issued for the office accommodation occupied by the Council's headquarters.
31. With regard to the delay in assessing the five technical institutes to rates, the Rating and Valuation Department was informed in May 1982 that the institutes would shortly be vested in the Vocational Training Council and would be rateable. However, although the institutes were vested in the Vocational Training Council with effect from 1 April 1982 action was not taken to assess the institutes to rates until August 1985. As a result of the delay the collection of rates totalling $1.7 million for the years 1982-83 and 1983-84 was barred by the limitation provision of Section 29(1) of the Rating Ordinance.
32. With regard to the Seaman's Training Centre, in December 1982 the District Land Conference of the District Lands Office, Hong Kong North approved the allocation of a site at Little Sai Wan to the Vocational Training Council for a term of three years and a short term tenancy was granted to the Council at a nominal rent. However, a formal tenancy agreement for the lease period commencing 1 April 1984 (the date on which the Centre became operational) was not executed and the Rating and Valuation Department was not informed of the tenancy by the Buildings and Lands Department. Action is now in hand to assess the premises to rates but collection of rates for some part of the lease period will be barred because of the limitation imposed by Section 29(1) of the Rating Ordinance.
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