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Following is a question by the Hon Cheung Kwok-che and a reply by the Secretary for Labour and Welfare, Mr Matthew Cheung Kin-chung, in the Legislative Council today (June 18):
Question:
The Government announced in the 1999 Budget the introduction of a competitive bidding system for the delivery of social welfare services, with price and quality being the criteria for evaluation of bids. Subsequently in 2001, the Social Welfare Department (SWD) started granting time-limited contracts for "Contract Homes" and "Enhanced Home and Community Care Services" (EHCCS) for the elderly through competitive bidding. I have learnt that a new bidding exercise will shortly be conducted for the EHCCS project, and subsequent to the failure of some service agencies in bidding for the new contracts, some users of such services have experienced difficulties in adapting to the services provided by new service agencies and their staff. Moreover, some service agencies have ceased employing experienced staff, whose salaries were relatively higher, for the purpose of reducing costs so as to boost their chance of success in the bidding, resulting in deterioration of the service quality. In this connection, will the Government inform this Council:
(1) of the respective numbers of contracts for Contract Homes and EHCCS awarded to new service agencies through competitive bidding in each of the past 10 financial years;
(2) whether it has considered incorporating provisions into the tender documents for EHCCS to the effect that the pay offered to the relevant staff by the successful bidders must be adjusted in line with the pay adjustments for civil servants each year; if it has, of the details; if not, the reasons for that; and
(3) as there are views that SWD's granting of time-limited contracts for EHCCS by competitive bidding will result in low morale among the front-line staff and aggravate the brain drain problem, whether the authorities will consider bringing such services within the ambit of the Lump Sum Grant Subvention System; if they will, of the details; if not, the reasons for that?
Reply:
President,
My reply to the questions raised by the Hon Cheung Kwok-che is as follows:
(1) Since 2001, the Social Welfare Department (SWD) has been selecting Contract Homes service operators through contract bidding, and service contracts have been awarded for the operation of 24 Contract Homes. In the past 10 years, two of the service operators of these Contract Homes have been changed. For the Enhanced Home and Community Care Services (EHCCS), after its regularisation in 2005, service contracts were also awarded to service operators through contract bidding. There has been no change in service operators for EHCCS as SWD has extended the contracts with service operators to continue the provision of services.
(2)&(3) Given Hong Kong's ageing population and the rapidly increasing number of elderly persons, the demand for home care services is very keen and service places and service teams have increased accordingly. The aims of awarding service contracts through contract bidding are to enable the service providers to provide more flexible services for service quality enhancement and allow more operators which can meet the service quality requirements to take part in service provision.
The Government has set out clearly in EHCCS contracts the contract service fees for the whole contractual period so that bidders may carefully consider and estimate, before bidding, their income and expenditure for the contractual period, and take this into account when preparing the tender to ensure continual provision of quality services. It is also expressly provided in the contracts that the contract service fees will be adjusted annually according to the Composite Consumer Price Index so that operators can cope with the increase in expenditure owing to inflation during the service period. Service operators may, based on individual circumstances, deploy resources flexibly to employ suitable staff to deliver services according to the contractual requirements. To avoid limiting the service operators' flexibility in resource deployment, SWD has not included clauses on the level of staff remuneration in the service contracts.
At the meeting of the Legislative Council Panel on Welfare Services on June 9, 2014, we listened to the views of the Panel Members and representatives from the welfare sector on the funding mode for EHCCS. The sector expressed its wish to change the funding mode for EHCCS from the existing contract bidding to annual subvention under the Lump Sum Grant. This would represent a fundamental change. We will need some time to consider and examine this carefully.
The existing 24 service contracts, which involve a total of 5 579 service places, are due to expire in late February 2015. Moreover, to further enhance the support for frail elderly persons to age at home, we have secured resources to provide 1 500 new service places from March 2015 onwards. There is thus an urgent need to decide, before February 2015, on the service operators for these 7 079 service places.
The welfare sector has already agreed that the contracts for the 1 500 new service places will be awarded through contract bidding. For the existing 5 579 service places, both the Panel on Welfare Services and the sector hope that the Government will consider extending the existing 24 contracts by administrative means to allow the existing service operators to continue their services for the elderly. We are actively exploring this proposal internally.
Ends/Wednesday, June 18, 2014
Issued at HKT 18:13
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