GOVERMENT HOUSE HONG KONG.
WED 14 APR 93 69:33
PG.04
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SECRET
On costs, remain very concerned about the financial gap which has arisen in 1992-93. Have asked some serious questions about the 4th quarter bill. If these are answered satisfactorily, will pay up in April out of 1993-94 appropriations.
But believe it will be impossible to secure LegCo approval for a
supplementary provision to cover the gap. To try risks calling the whole DCA into question.
So, believe that defence costs budget for 1993-94 must not only cover any justified gap in 1992-93 but also - if at all possible - decline in real terms.
That means HQBF and MOD will need to look hard and critically at the options for reducing support costs and all possible means of making short-term savings. Another possibility would be to use one battalion on duty overseas. Hope Hong Kong can be fully involved in discussions on all this.
If it proves impossible to fully close the gap in 1993-94, will need to look with you at ways of smoothing out the planned flow of spending until the savings we are seeking start to bite in 1994-95.
Hope will have MOD's full co-operation. Maintaining support for the British military presence in Hong Kong over the coming years will not be easy.
SECRET
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