TNAG-2099-FCO40-2988-HM-Overseas-Civil-Service-(HMOCS)-policy-matters-1990 — Page 31

CONFIDENTIAL

Mr M Stone

Hong Kong Department

Foreign and Commonwealth Office

London

SW1

Parliament Street

London SW1P 3AG

Telephone 01 270 4902

Pa

HMOCS palin

MKB 431/62

Y

M...: 1990

W

18 May 1990

ale

Mr Stone

}

HONG KONG: COMPENSATION/INCENTIVE SCHEME FOR MEMBERS OF HMOCS

G

2215

Thank you for letting me have a copy of Mr Paul's draft minute and the draft paper for OD (K). We have since spoken on the 'phone a couple of times, but I would like to record some of our concerns.

matter

There are clearly a number of points

points here which require very careful consideration and I would suggest that it would be useful to try and sort these out before the

reaches Ministerial level again. I understand that the draft has yet to go to the Governor of Hong Kong and you may wish to reflect on the points raise below before you despatch it.

is

I

the

I would like to start by examining the assumptions underlying your costings. A key factor in determining the expected cost number of HMOCS eligible officers who would stay on. I am not quite sure how the figures in your paper (and those quoted by the then Foreign Secretary in his minute to the then Chancellor of 24 November 1988) fit together. In paragraph 3 of Mr Paul's draft minute reference is made to 800 HMOCS eligible officers, but in are about 500 HOMCS paragraph 6(a) the figures which are quoted members and 390 officers who are eligible for membership making a total of 890. You estimate that some 585 individuals will stay on to 1997 to qualify for the first compensation/incentive payment. This seems to differ quite markedly from your previous estimate. In his minute to the then Chancellor of 24 November 1988 the then of Foreign Secretary said there were likely to be 300-400 members HMOCS in Hong Kong in 1997.

You then go on to predict the proportion of the staff involved who are likely to leave immediately after the first and thereafter (30%) compensation/incentive payment in 1997 (40 per year). Again, these figures are crucial to calculating the costs involved and we will need to know the basis upon which they were calculated and your view of how robust they are. Could you supply a sensitively analysis which shows projections based on alternative assumptions so that we could see what the best likely case and the worst likely case would look like?

I

have already mentioned to you that an aspect of the proposed scheme which causes us particular concern is the fact that the compensation/incentive to be paid would relate directly to the salary of officers in 1997 and thereafter. It seems

Hong Kong Government (and its successor) may feel bound

the

to me

that

Switchboard 01 270 3000

Fax 01 270 5653

Telex 9413704

28