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LCQ5: Lotteries Fund and subsidised residential care places for the elderly

     Following is a reply by the Secretary for Labour and Welfare, Mr Matthew Cheung Kin-chung, to a question by the Hon Wong Yuk-man in the Legislative Council today (June 3):


     People from the social welfare sector have often relayed to me that the Social Welfare Department, while urging subvented non-governmental organisations not to accumulate excessive Lump Sum Grant Reserves, has itself retained a huge balance in the Lotteries Fund and not used the funds to provide additional subsidised nursing home (NH) places and care-and-attention (C&A) home places for the elderly, ignoring the situation that a total of 19 006 elderly people passed away in the past five years while waiting for those places.  In this connection, will the Government inform this Council:

(a) of the current balance of the Lotteries Fund, the amount of funds allotted to investments between March 2007 and March 2009 and the investment returns, as well as the interest income in the past five years;

(b) whether the authorities will take the initiative to allocate funds from the Lotteries Fund to fully subsidise the subsidised NH homes and C&A homes currently located in detached buildings to build additional storeys, and to fully subsidise non-governmental organisations to convert the premises of the several dozens of primary and secondary schools which have ceased operation into such homes, so as to optimise the use of land, increase the number of such residential places, shorten the waiting time for places and create job opportunities; if they will, when they will implement the plan; if not, of the reasons for that; which vacated school premises had been converted into those homes in the past three years and when those conversion works commenced; and

(c) whether the Secretary for Labour and Welfare sought additional funding for the current financial year from the Financial Secretary so as to provide additional residential places to shorten the waiting time and reduce the number of elderly people who pass away while waiting for the places; if he did, when he made the request and the response received; if not, of the reasons for that?



     I will reply to the three parts of the Hon Wong Yuk-man's question individually.  

(a) According to the revised estimate in the 2009-10 Estimates, the closing balance of the Lotteries Fund (LF) for 2008-09 was about $6,700 million.  As at end-March 2009, the uncommitted balance of LF was $5,075 million.  Since 1 April 2003, the assets of LF have been merged with those of the Exchange Fund for investment purpose.

     In the past five years (i.e. from 2004-05 to 2008-09), the investment income of LF amounted to $1,783 million.  

(b) The Government has all along used LF to meet non-recurrent expenditures of non-governmental organisations (NGOs) providing welfare services.  In respect of elderly services, the costs of construction of subvented or contract residential care homes for the elderly (RCHEs), and that of renovation, furniture and equipment as well as installation of new facilities in RCHEs, Day Care Centres for the Elderly, District Elderly Community Centres and Neighbourhood Elderly Centres, are all funded by LF.  The amount of LF allocated for items related to elderly services has increased from $136 million five years ago (i.e. 2004-05) to $287 million last year, representing 36% of the total allocation of $809 million from LF in the whole year.  

     On Hon Wong's suggestion of using LF to subsidise subvented RCHEs located in stand-alone premises to build additional storeys, NGOs operating RCHEs in stand-alone premises can at any time apply to the Social Welfare Department (SWD) for redeveloping or extending the concerned premises if they wish to increase the number of residential care places by building additional storeys.  In deciding whether to support such proposals, SWD will consider whether the redevelopment or extension can enhance the quality of service as well as possible impact on elderly residents.  If the proposal is supported by SWD, the concerned NGO can apply to the Lands Department (LandsD) for changing the plot ratio and/or land uses.  As regards the costs of extending or redeveloping the premises, SWD will consider providing funding through LF, having regard to the need of individual NGOs and whether the redevelopment or extension projects will enhance the support for frail elders, etc.  Based on the above criteria, SWD has just supported a feasibility study on the redevelopment of the David Trench Home for the Aged of the Tung Wah Group of Hospitals located in the Southern District through funding approved by the Lotteries Fund Advisory Committee in March this year.   

     In fact, SWD has been proactively identifying suitable sites for the construction of new RCHEs throughout the territory in response to elders' demand for subsidised residential care places.  Besides, SWD has been in close liaison with the concerned government departments (e.g. LandsD, Planning Department, Housing Department and Government Property Agency) to explore the feasibility of constructing RCHEs in new development projects or re-development projects (e.g. public housing estates) under their purview, or converting vacant buildings (e.g. premises of primary and secondary schools which have ceased operation) into RCHEs.   

     In exploring whether a particular site is suitable for development as an RCHE, SWD will look into various factors, including whether the size of the concerned site allows the construction or re-modelling of an RCHE of a certain scale so as to achieve cost effectiveness; the site should also be located in a place accessible by public transport to facilitate visits by the family members of elders.  Besides, places with bad air quality or those affected by noise pollution may not be suitable for elders to reside in.  Therefore, SWD also has to consider the facilities and development projects in the vicinity during the site searching process.  It must be pointed out that some government sites or buildings are temporarily vacant and are only available for short-term development, as they have been planned for other long-term uses.  As RCHEs are not short-term development projects, we cannot use temporarily vacant sites to develop RCHEs.  At the same time, owing to fire safety considerations, all RCHEs must conform with the provisions in relation to RCHE premises under the Residential Care Homes (Elderly Persons) Ordinance, including the provisions specifying that no part of an RCHE shall be situated at a height more than 24 metres above the ground floor; and no RCHEs shall be situated in any part of an industrial building or any premises located immediately above the ceiling or below the floor slab of any godown, cinema and theatre.

     In the past few years, SWD has looked into several vacant primary and secondary school premises and explored the feasibility of converting them into RCHEs.  Nevertheless, most of the school premises were not suitable for development of RCHEs owing to their relatively small sizes or other constraints (e.g. lifts or ramps could not be installed or constructed to facilitate access by frail elders because of structural limitations).  SWD will continue to identify sites and vacant buildings for development of RCHEs through different means.  

(c) The Government has made every effort to respond to the demand of the elderly for subsidised residential care places.  In fact, the Government has been increasing the allocation of resources for subsidised residential care places for the elderly.  The overall supply of subsidised residential care places has increased from around 16 000 some 10 years ago to around 26 000 at present, representing a rise of about 60%.  Taking 2009-10 as an example, recurrent funding of $55 million has been earmarked in the Budget to increase the supply of subsidised residential care places for the elderly, including:

(i) $17 million to provide 150 additional subsidised residential care places in two newly built contract RCHEs; and

(ii) $38 million to purchase 500 subsidised residential care places from private RCHEs through the Enhanced Bought Place Scheme.

     The Government will continue to allocate more resources to gradually increase the supply of subsidised residential care places for the elderly.  From now till 2011-12, the construction of five new RCHEs will be completed.  Besides, SWD has earmarked sites in 12 development projects for the construction of new RCHEs.   

     Nonetheless, in view of the ageing population, a continuous increase in the supply of subsidised residential care places alone will not be sufficient to meet the ever-growing demand.  The Government has been working with the Elderly Commission (EC) on the long-term planning of elderly residential care services.  EC has embarked on a consultancy study to explore how to target subsidised residential care services at elders most in need.  The study will also look into ways to promote further development of quality private residential care services and encourage shared responsibilities among individuals, their families and  the community in meeting the long-term care needs of the elderly.  The study is expected to be completed within this year.

Ends/Wednesday, June 3, 2009
Issued at HKT 14:52


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