1987 — Page 12

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HONG KONG URBAN COUNCIL

MR. PETER C. K. CHAN (in English):-I think the supplement is Would the Council agree to bring this matter up at every six months for review and the progress?

CHAIRMAN (in English):-It's in your own hands to bring it up again of course?

MR. PETER C. K. CHAN (In English):—No, it will be the Secretary's report, it is in your hands.

MR. HILTON CHEONG-LEEN (in English):--- May I ask the Chairman of the Select Committee whether he would like me as a Council's representative to raise this before the Legislative Council?

MR. L. H. KWAN (in English):-When time comes I think I will be quite pleased to have Mr. Hilton CHEONG-LEEN to assist us in the Legco.

STATEMENT BY MR. WALTER M. SULKE, CHAIRMAN OF THE FINANCE SELECT COMMITTEE

MR. CHAIRMAN:-I think it is necessary, as soon as possible, after the start of a new financial year to give this Council some idea of the out turn of the previous year, and I am very glad to be able to impart some good news to members and ratepayers, with the proviso that all the figures I will be quoting having been obtained within only two weeks of the end of the financial year, and my congratulations to our able Accounts Department for getting these figures out so fast, are unaudited and subject to final corrections.

You will remember that we forecast a surplus for the last financial year. This was a very modest surplus of HK$26 million, which in terms of percentages of the total budget, was negligible. The good news is that our actual surplus will be HK$109 million and this is the first time that the Council has had a surplus in the 9 figures.

But before you all throw your hands in the air, I want to remind you that this means that our reserves now stand approximately HK$410 million which represents only about 2.2 months' expenditure and it is generally agreed that our reserves should cover 3 months expense. So we still have a little way to go. Now this surplus is not the only record we achieved in last year's budget because our capital expenditure last year was also an all time record amounting to HK$347 million. The Chairman and his statement already mentioned that this money was spent on Capital Works projects ranging from multi-storey complexes to indoor games halls, libraries, parks, and other much needed civic facilities which will help upgrade the living standards of our 44 million urban dwellers. This figure of HK$347 million is HK$73 million more than the Council has ever spent in any one year in the past on civic projects and underlines the Council's commitment to provide the best available facilities for the people of Hong Kong.

HONG KONG URBAN COUNCIL

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I may say also that for the first time we actually overspent on our capital works budget by something over HK$40 million and although normally budget overspending is something that sends shivers down my spine, in this particular case I was happy because it meant that a great many of our projects were ahead of schedule. And a although a great many projects also had the usual, in my view, sometimes quite unnecessary, slippage, it is certainly good news our building programme is, at least measured in financial terms, ahead of schedule.

Now you are going to ask, why, if we are overspending HK$40 million on capital works, we still have over HK$100 million surplus. Well, for one thing, we managed to save HK$45 million on operational expenses and the Department must be complimented on achieving such very significant savings which show that not only our 'value for money' studies are beginning to pay dividends, but also that the efficiency inside the Department is improving. So that saving on operational expenditure more than made up for the overspending on Capital expenditure.

The rest of the surplus was generated by great savings under the heading of ‘additional commitments'. This was a new heading which we added last year because we wanted to be much more accurate in our functional select committee's and departmental budgets than we had been previously. These additional commitments were mainly staff commitments and the savings under this heading fall into three categories:

Savings generated by increased Departmental efficiency. Savings generated by difficulties in filling staff vacancies. Savings generated by over-budgeting.

As regards the savings generated by greater efficiency and the deletion of some staff requirements, we must all be grateful for the continuing efforts made by the Department in this sphere. I think both the Department and this Council can be proud of the fact that we had a reduction in staff costs in real terms in the last financial year and I believe that very few other Government departments who can make this claim.

Regarding the problems of filling vacancies, this falls, of course, into the province of the Administration Select Committee, but it does seem to me that there is far too much red tape in our recruiting efforts and this is perhaps something the Department and the Administration Select Committee should look at.

So the major factor in producing this very welcome surplus are the economy measures which the Council and the Urban Services Department have continued to exercise, stringently keeping operating costs down while continuing to provide a very high quality of service. The Department scrutinises each and every proposal involving financial expenditure after which the Council's Select Committees give each financial proposal a second thorough going over to identify and introduce further possible savings. So I think it is fair to say that