TNAG-2077-FCO40-2957-Hong-Kong-culture-1990 — Page 125

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Value for money

14 Funding

14.1 The Council starts its planning for the three years 1991/92 to 1993/94 with the assumption that there will be:

• a 16% increase in the real value of agency funds administered

• a 53% increase in the real value of revenue earned

• a 27% fall in the purchasing power of government grants received.

14.2 Figures for revenue and government grants in table 1 (page 4) are distorted by the transfer of the ODA's aid administration grant to revenue from 1991/92. The more detailed forecast of income in table 17 (page 49) indicates that the underlying increase in the real value of revenue earned is 15% and that government grants will account for only 24% of the Council's income by 1993/94. In summary, although the real value of the Council's total programme will increase by 6% overall, there will be no real growth in operating income (grants plus revenue) without further provision for risen costs.

14.3 The Council believes that both Britain's interests and its own strategic interests are best served by seizing every opportunity to expand its involvement in bilateral and multilateral cultural relations, while it continues to deliver traditional, grant-funded services. The decision to pursue

Projected growth in agency funds

1990/91 to 1993/94

growth is made for two reasons:

• the survival of the Council depends on its ability to secure a major role in a rapidly expanding cultural relations environment

• only through growth and flexibility can the Council provide challenges and a career structure that will attract and retain the staff required for achievement of its objectives.

14.4 A key priority in the years to 1994 is therefore to increase income from sources other than the government grant, and to diversify the sources of that income. This chapter outlines the Council's policy for developing its income sources.

Revenue

14.5 Almost half the Council's revenue derives from fees for the administration of agency schemes, implementation of projects and provision of educational or promotional services

all under contracts agreed and controlled through headquarters. Policy is to develop these services on a full cost-recovery basis (including overheads).

14.6 Financial targets for the Council's other revenue-earning operations are agreed between Representatives and headquarters geographical departments and achieved under local management, except DTE which is managed centrally from headquarters (see paragraph 10.2, page 32).

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Figure 16