Appendix B-Contd.
13 The forecast percentage changes in real terms for each service group comparing 1987-88 and 1991–92 are indicated in the following diagram:
General Services +16%
Percentage Changes (in real terms) in Spending for Service Groups Comparing 1987-88 and 1991-92
Economic
Security Services Services +13%
+12%
Community Services
+11%
Social
Services
+27%
Diagram 4
Note: The width of each bar on the horizontal axis is proportional to the 1987-88 Revised Estimate
14 Table 2 and the diagram above indicate that current plans and commitments imply a continuation of the trend towards an increasing share of total resources going to Social Services. Within this service group, spending on Medical is expected to rise particularly sharply (+38% in real terms at an average annual rate of 9%), led by an expanding capital programme with its consequential increases in running costs for new hospitals and other facilities. Social Welfare will also increase significantly (+48% at an average annual rate of 11%) due, in part, to recent measures in respect of assistance to the elderly and the disabled and also to the planned expansion in the provision of welfare facilities and services. The Social Security component of this service group is expected to increase by 59%. It is again emphasized that these growth factors take no account of any new or improved services not already planned but which may be introduced within overall expenditure planning guidelines.
15 The share of spending devoted to Housing will rise for the first few years of the forecast period due to spending on the Kowloon Walled City project. Thereafter, it will fall slightly as a share of the total although underlying spending (excluding Kowloon Walled City) will still be increasing in real terms.
16 The share of overall spending on Internal Security will reduce with the gradual run down of the garrison although this will be partly offset by higher spending on Law and Order as the Royal Hong Kong Police Force is expanded.
17 Whilst the share of Economic Services shows a slight reduction due to completion of Stage V of the building programme at Kai Tak, this may be affected in the 1990's (beyond the forecast period) by several major economic infrastructure projects currently under consideration. Transport may be similarly affected. The impact on the relative share of these services will be reduced, however, by the extent to which the private sector participates in such projects.
The Scope for New or Improved Services
18 The forecast of Consolidated Account expenditure shown in Table 2 and as expressed in terms of relative shares in Diagram 3 does not take into account new or improved services not already planned. The scope for financing these is determined by the Medium Range Forecast (MRF) (see Appendix A). However, a comparison of the current MRF with the forecast made above on the basis of planned trends in expenditure up to 1991-92 (Table 2) may not provide a complete guide as to the scope for financing new or improved services. For example, existing development and improvement programmes already planned and built into the MRF are always subject to review as, is indeed, expenditure on existing services. Where such reviews lead to readjustment of priorities savings may result which can be redirected towards new or improved services. Moreover, and very importantly, the implementation of value for money studies can also result in a more efficient deployment of scarce resources so that existing tasks can be performed more cheaply and the resulting savings used for new services. Over the last 5 years, these studies have saved an estimated $650 million.
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