nearly 500,000 students benefited from the scheme to the extent of $51 a student a month which enabled them to travel anywhere at any time at half fare on all major transport modes. On the other hand, the annual cost was high. This amounted to $293 million for 1985-86 and there was the prospect of it rising even higher in the years to come. 6.91 On the question of university students benefiting from both the student travel scheme and the university student finance scheme, the Secretary for Transport explained that the student finance scheme was means tested and took account only of the half fare that the student had to pay on public transport services. Therefore there was no question of the university students receiving double benefit. On the question of recreational travel assistance, the Secretary considered that it would be difficult to devise a separate scheme because of the problem of defining recreational trips, although it might be possible to subsidize established recreational bodies or to restrict the subsidy to recreational bus or ferry routes. But he said such a scheme would be complicated to administer.
6.92 The Secretary for Transport was asked whether the scheme resulted in any overpayments to transport operators. The Secretary conceded that the matter had caused problems over the years. However, transport surveys of student travel had helped to determine a more accurate figure on which to base the payments to the operators and these surveys had become more precise over the years. In this connection the Committee observed that the scheme brought more business to transport operators because it encouraged students to travel by public transport instead of walking.
6.93 In reply to a question concerning alternative forms of assistance which might be cheaper than the current scheme, the Secretary for Transport said that it might be useful to go back and consider the principles of the scheme and whether it should be confined only to needy students on school trips. He explained that the working group appointed to review the scheme was trying to identify all possible alternatives ranging from doing away with the scheme altogether, (which was probably unacceptable in general policy terms), to a scheme involving paying parents rather than transport companies. The working group, after considering all possible alternatives, would try to reach a consensus on the principles to be adopted for the future of the scheme and it would then be a matter for the Executive Council to bring a wider perspective to bear on how such a scheme would fit into the social or political needs of the community.
6.94 Conclusions and Recommendations. The Committee note that the student travel scheme has been part of Government policy since 1971, that there is a high level of expectation that the scheme will continue and that it will be extremely difficult to do away with it altogether. Nevertheless, the Committee are concerned at the high cost of the scheme estimated at $293 million in 1985–86—and that it allows all students to travel anywhere and at any time at half price. The Committee also note that in addition to being compensated by the Government for the number of subsidized journeys undertaken by students, operators derive additional benefits because the scheme itself encourages students to undertake more journeys than they would if they were paying the full cost of their fares.
6.95 The Committee note that the Secretary for Transport has established an inter-departmental working group to consider the whole question of the student travel scheme and alternative forms of assistance. The Committee recommend that this working group should establish the objectives of the policy and then devise a means of implementation, including alternatives to the present scheme, having regard to the need for economy and the competing claims from other deserving members of the community.
6.96 The Committee note the contention of the Secretary for Transport that the university student finance scheme and the student travel scheme do not provide double benefit in respect of travelling costs to those students who are in tertiary education. The Committee also note that it would be very difficult to devise a separate scheme which subsidizes recreational travel. However, the Committee recommend that given the very high cost of this scheme, these two aspects should be closely examined in the course of the present review.
7 GOVERNMENT DEPARTMENTS
CITY AND NEW TERRITORIES ADMINISTRATION
7.1 Paragraphs 72–74. The wisdom of keeping a large number of the City and New Territories Administration quarters vacant during the unnecessarily lengthy negotiations with the Lands Department on how the quarters should be divided between the two authorities causing nugatory expenditure with the possible reduced operational effectiveness of the district administration. The Secretary for District Administration was asked by the Committee whether he had any comments on the matters mentioned in the Director of Audit's report. The Secretary explained that paragraph 74 of the Director of Audit's report already reflected his views but he emphasized that in 1982 it had been of paramount importance to maintain the morale of the civil service. The exercise of dividing departmental quarters between his Administration and the Lands Department was not therefore as simple as it might have seemed and could not have been solved as an arithmetical exercise. It was a human problem and needed to be handled with care. The Secretary disputed the figure of $600,000 which the Director of Audit had represented as the cost of keeping the quarters vacant. This figure had been based on market rent: it would have been more appropriate to measure the loss by the amount of rent that would otherwise have been paid by the civil servants who might have occupied the quarters. This would have been a much lower figure. He also explained that although a total of 41 flats had been left vacant, this averaged only three or four empty flats for each district.
7.2 The Secretary for District Administration was asked why it had been necessary to suspend the allocation of quarters. He explained that this was to avoid having to move officers out of quarters as a result of the division of duties between the two authorities. In the event, no officer had been required to move out of his quarter for this reason. The Secretary emphasized that it was not a simple matter to divide the quarters between the two authorities taking into
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