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LCQ1: Lotteries Fund
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     Following is a question by the Hon Paul Chan and a written reply by the Secretary for Labour and Welfare, Mr Matthew Cheung, in the Legislative Council today (April 21):

Question:

     The Lotteries Fund (the Fund) was established on June 30, 1965 for the purpose of financing social welfare services by grants, loans and advances.  Over the years, allocations from the Fund have all along been charged to Head 341 - Non-recurrent Grants. Apart from various charitable organisations, quite a number of government departments (such as Architectural Services Department, Department of Health, Housing Department and Social Welfare Department, etc.) have also been granted allocations from the Fund. In handling the accounts on allocations from the Fund, the Government would usually include the relevant accounts in capital spending, which is paid by capital revenue. In this connection, will the Government inform this Council:

(a)  of the organisations which had been granted funding from the Fund consecutively in the past five years; of the 20 beneficiary organisations (including government departments) which had been granted the highest total amount of funding from the Fund in the past seven years, together with a breakdown of allocations to each of such organisations and government departments each year by the nature of the project financed; whether it has assessed if the allocations met the funding purposes which was laid down when the Fund was established;

(b) instead of financing charitable organisations only, why the Fund has made allocations to government departments; why the authorities do not list the items of expenditure of government departments which were financed by the Fund in the Estimates under the relevant Heads of Expenditure, in order that the Legislative Council can consider more comprehensively when vetting and approving estimates of expenditure of the relevant departments, but instead include such items of expenditure in the estimates of expenditure of the Fund; and

(c) whether it has assessed if the aforesaid allocation arrangements will result in the Fund failing to comprehensively and effectively finance charitable organisations, thus rendering them not being able to explore and introduce additional services more efficiently and effectively in response to the continuous changing needs of the community?

Reply:

President,

     Established in 1965, the Lotteries Fund (LF) aims to finance social welfare services by grants, loans and advance payments.  The LF is mainly funded by the proceeds of the Mark Six Lottery.

     Grants approved under the LF are normally used to meet the non-recurrent commitments for constructions, fitting-out, renovations, purchase of furniture and equipment for premises occupied by non-governmental organisations (NGOs) providing welfare services. With the expansion of welfare facilities over the years, the LF is also used to finance routine non-recurrent expenses of the NGOs in running welfare services subvented by the Social Welfare Department (SWD), such as routine repairs and maintenance works, as well as replenishment of furniture and equipment.  Moreover, the LF also provides funding to finance time-limited experimental projects and enhance the support to social welfare services.

(a) and (b) In the past five years, most of the SWD-subvented NGOs have received funding allocations from the LF.  All these allocations are used to support and develop social welfare services and are in line with the funding purposes laid down when the LF was established.  The relevant allocations are mainly used to provide funding to the NGOs to carry out works projects, purchase furniture and equipment, launch time-limited experimental projects and enhance the support to social welfare services.  The LF allocations to the NGOs vary from year to year depending on their actual needs and applications.  To have a better understanding of the LF expenditures, we should look at the total amount of funds allocated to the 20 NGOs receiving the highest LF allocations each year in the past seven years rather than the allocations to individual NGOs.  The relevant information is set out at Annex.

     The estimates of LF expenditures of the Government departments under "Head 341 íV Non-recurrent Grants" are expenses spent on the entrustment projects carried out by the Government departments, including the Architectural Services Department, Housing Department and Department of Health, for constructing or renovating the social welfare units of the NGOs; or allocations from SWD to the NGOs to carry out fitting-out works or purchase furniture and equipment for their newly bid subvented welfare service units.  Since the relevant expenses are not funded by the general revenue account, they are not incorporated into the estimates of the relevant Government departments.

(c)  The allocation arrangement of entrusting Government departments to implement works projects for the NGOs, or allocating grants from SWD to the NGOs to carry out fitting-out works / purchase furniture and equipment has been in place for a long time and proven to be effective.  We consider that the arrangement is appropriate and will not cause any adverse effect on the provision of welfare services by the NGOs. Besides, in view of the changing welfare needs of our society, SWD also allocates grants from the LF to provide direct financial resources to the NGOs to enhance their provision of welfare services. For instance, the Social Welfare Development Fund has been set up to subsidise the NGOs to implement training and business improvement projects; resources are also provided to the NGOs to employ paramedical staff, etc.

Ends/Wednesday, April 21, 2010
Issued at HKT 13:10

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