LCQ5: ESF Nomination Rights Scheme

     Following is a question by the Hon Tommy Cheung and a reply by the Secretary for Education, Mr Eddie Ng Hak-kim, in the Legislative Council today (October 31):


     The English Schools Foundation (ESF) has introduced a Nomination Rights Scheme (NRS) for nine primary schools, five secondary schools and one special school, which are operated directly by ESF and subsidised by the Government, at a price of $500,000 per student and with a quota of 150 for the first year. It is learnt that since parents buying NRS will be accorded priority in securing a place in ESF schools for their children, some parents are concerned that NRS might turn education into pecuniary transactions, thus violating the basic principle of fairness in provision of education. In this connection, will the Government inform this Council:

(a) when the authorities became aware of ESF's introduction of NRS for its subsidised schools; whether ESF has reached a consensus with the Education Bureau and obtained its approval well before implementing NRS; if so, of the Education Bureau's basis for granting the approval, and whether other government-subsidised schools may also adopt this approach in admitting students in future; if not, what follow-up actions the Education Bureau will take;

(b) given ESF's claim that the purpose of NRS is to raise funds for maintenance of facilities in ESF schools and school redevelopment, if NRS has been approved by the Government, how the authorities will in future urge ESF to make public the financial position of the income and expenditure of ESF schools, to ensure that the funds raised will be used for the specified purposes; and

(c) following ESF's introduction of NRS, whether the authorities will speed up the reduction of subsidies for ESF schools, so as to facilitate the gradual transition of ESF schools to operate under a self-financing mode; if they will, of the details; if not, the reasons for that?



     Schools operating under the English Schools Foundation (ESF) are required to operate in compliance with the Education Ordinance and Regulations, the English Schools Foundation Ordinance and the relevant administrative guidelines.  Broadly speaking, being autonomous in operation, the ESF may decide on the curriculum offered, student mix as well as admission criteria and arrangements.  Our response to the three parts of the question raised by the Hon Tommy Cheung is as follows:

(a) We note that most schools in Hong Kong which offer non-local curriculum raise funds through nomination rights schemes, debentures schemes or capital levy to finance capital developments and enhancement of school facilities for the purpose of meeting the design of their respective curriculum and infrastructural requirements.  Some of those schemes are not mandatory and the amount collected would be repaid to parents in full or at the prevailing price when their children leave school.

     In May 2012, we note that the ESF would introduce a Nomination Rights Scheme (NRS) in October 2012 to replace the existing Corporate Surety Scheme.  Proceeds raised will be exclusively reserved for the funding of capital projects of ESF schools.  We understand that during the first month after the NRS opens, priority will be given to applicants from overseas and overseas passport holders currently residing in Hong Kong with conditional terms of stay.  The new scheme only covers 150 places across all year groups, which amounts to 2% of the total student population of all ESF schools.  Children whose parents have applied for nomination rights will only gain the opportunity for priority placement in an ESF school provided that they meet the admission requirements and pass the interview.  Like other schools that provide non-local curriculum, we have requested the ESF to explain the details of the NRS to interested parents and to ensure that they give their consent to and accept the terms before making an application.  We apply the same principle to schools offering non-local curriculum when raising funds for capital and infrastructural development.

(b) Our prevailing practice is to request the ESF to submit their audited accounts to the Education Bureau and to explain its financial position, if required.  In fact, the annual audited accounts of the ESF are available on its website for public's reference.  The accounts set out the expenditure and financial position of the ESF in relation to its infrastructure and facilities.  Apart from continuing the existing practice of making its annual audited accounts available to the public, to ensure the proceeds under the NRS are used for the designated purpose, we will also request the ESF to clearly set out in its accounts details of the proceeds as well as the financial position including details of the items supported by the proceeds under the NRS.  

(c) The ESF is an established and valued member of our school system.  Review of the subvention should be based on a holistic perspective of the entire school system and the position of the ESF therein, taking into account the arrangements for other schools which operate in a like-fashion.  We have informed the ESF that the existing recurrent subvention should be phased out gradually.  This notwithstanding, we have also reiterated that the subvention review will not prejudice the interests of the existing students before any new subvention arrangement takes effect.  In addition, we have indicated to the ESF that in the course of discussing the phasing-out arrangement, we are willing to examine with them the role which the ESF may play in the education sector of Hong Kong and the direction of its future development.

Ends/Wednesday, October 31, 2012
Issued at HKT 14:44