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Following is a question by the Hong Cheung Man-kwong and a reply by the Secretary for Education and Manpower, Professor Arthur K C Li, in the Legislative Council today (January 18):
Question:
In his Policy Address delivered in October last year, the Chief Executive reiterated that he would not reduce the total spending on education. However, the Education and Manpower Bureau ("EMB") did not fully utilise all the funds allocated in the past two years and returned the unspent funds, amounting to $7.1 billion dollars, to the Treasury. In this connection, will the Government inform this Council:
(a) where EMB has not fully utilised the funds allocated to education for the current financial year, whether it will, as it did in the last two years, return the unspent funds to the Treasury; if it will, whether such practice is contradictory to the Chief Executive's above undertaking; and
(b) where EMB has not fully utilised the funds allocated to education for the current financial year, whether the Financial Secretary will, in view of the Chief Executive's undertaking, urge EMB to apply to the Finance Committee of this Council for approval to reallocate the unspent funds for other non-recurrent educational uses?
Reply:
Madam President,
(a) The total provision for education in the budget covers recurrent and non-recurrent expenditure on education of the Education and Manpower Bureau ("EMB"), the University Grants Committee (UGC), Student Financial Assistance Agency, and the school educational television productions of Radio Television Hong Kong, as well as the education-related expenditure under the Loan Fund and the Capital Works Reserve Fund.
Over the past two financial years, the actual expenditure on education was less than estimated. This was mainly attributed to several reasons.
First, it is related to the funding for schools. When preparing the annual estimate of expenditure, we have to ensure that there is enough funding to meet the subsidies provided for schools under the existing policy. Whether eligible schools apply for these subsidies is not a matter within the control of the Government. For example, there are primary schools which have not exhausted the establishment for creating graduate teaching posts or not filled the English panel chairs created since 2000. There are also teaching posts left vacant during the school year due to various reasons, and difficulties in recruiting Native-speaking English teachers. All these are factors which make the actual expenditure on salary and emoluments lower than estimated. This explains the main reason for the "unspent funds" in the area of education. We, however, have to keep up the provision for the following year to cater for possible applications from schools.
Second, it involves the financial assistance for students. We prepare the budget for student financial assistance and loans with reference to past experience and data. The annual provision earmarked for student financial assistance and loans cannot be reduced in favour of other recurrent expenditure on education even if the number of applications for a particular year is lower than expected. This is because nobody can rule out a rebounce in the number of applications for student financial assistance and loans for the following year. The Government must ensure sufficient resources for meeting all the expenditure on student financial assistance and loans. For this reason, the Student Financial Assistance Agency also has to reserve funds for contingency. There are naturally ˇ§unspent fundsˇ¨ when such needs do not arise.
Third, it involves works projects and non-recurrent items. Although the progress of works projects and non-recurrent items are slower than expected, leading to a lower expenditure than estimated, the relevant expenditure remains necessary in the following year. The Finance Committee of the Legislative Council will not allow government departments to freely re-designate the funds allocated.
In addition, to tie in with the overall objective of reducing the civil service establishment to 160 000 and the operating expenditure to $200 billion, EMB also reduces its manpower and expenses accordingly. This results in "unspent balance" in total education expenditure.
I would like to stress that when preparing the budget for education, we have to ensure that the provision will be sufficient to meet all school funding requirements under the Codes of Aid, operational expenses of the EMB and departments under its purview, financial assistance and loans for students, all expenditure arising from education-related capital works projects and non-recurrent items, and the foreseeable rise in expenditure. As there are always unforeseen situations, a discrepancy between the actual and the estimated expenditure is unavoidable.
The pledge of the Chief Executive is to ensure that the total provision for the education expenditure envelope will not be reduced. In fact, despite the above unavoidable factors and the surplus in provision, we have not reduced the resources allocated to schools. To optimise the use of funds, we should adhere to the principle of "spend where necessary and save where possible".
(b) We will keep the expenditure on education under review. Funding applications for non-recurrent educational uses will only be submitted to the Finance Committee of this Council in the interest of overall education development and subject to resources available in the financial year. In the three financial years from 2003-04 to 2005-06, non-recurrent educational items approved included provision for the second round of Project Yi Jin, IT in education strategy, injection into the Education Development Fund for the implementation of the School-Based Professional Support Programmes, two injections into the Language Fund, the Early Retirement Ex-gratia Payment Funds for Aided Secondary School and Primary School Teachers, grant for establishment of incorporated management committees in aided schools, assessment development and research projects of the Hong Kong Examinations and Assessment Authority as well as its projects on modernisation and development of the examination systems, launching of two matching grant schemes for UGC-funded institutions, etc.
In addition, as far as resources are available, other measures have been implemented to reduce the workload on teachers. For example, the Scheme on Specialised Teaching in primary schools, which has been introduced by phases starting from the current school year, will enable schools to employ approximately 900 more teachers with an additional annual expenditure of about $250 million when fully implemented.
The Government is financed by public money. We have to ensure that each and every cent is used effectively in a targeted manner. To return the unspent annual financial provision to the Treasury is an established financial arrangement of the Government.
Ends/Wednesday, January 18, 2006
Issued at HKT 13:22
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