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Estimates of expenditure on future funding for UGC-funded institutions

LCQ9: Estimates of expenditure on future funding for UGC-funded institutions

Following is a question by the Hon Cheung Man-kwong and a written reply by the Secretary for Education and Manpower, Professor Arthur K C Li, in the Legislative Council today (June 18):


Question :


Regarding the estimates of expenditure on future funding for University Grants Committee-funded institutions ("UGC-funded institutions"), will the Government inform this Council:


(a) of the base for calculating the amount to be cut in reducing the funding for UGC-funded institutions;


(b) of the following information regarding each UGC-funded institution in each year from 2003/04 to 2007/08:


(i) the percentage change in recurrent grant and the amount involved;


(ii) the number of courses for associate degree, higher diploma and master degree to be cancelled, the amount of grant involved and the percentage of the amount in the total funding;


(iii) the amount of grant for home financing and other benefits and the percentage changes thereof;


(iv) the expenditure for salaries and benefits and their percentages in the total funding; and


(v) of the percentage changes and the amounts involved in the other individual funding items; and


(c) whether it has assessed the effects of the cuts in funding and grants for UGC-funded institutions on various courses, the number of academic staff and their salaries and benefits; if so, of the assessment results; if not, the reasons for that?


Reply :


Madam President,


(a) Apart from reflecting civil service pay adjustment and changes in price levels, as a planning target we expect funding for the University Grants Committee (UGC) sector in the 2004/05 academic year will also be reduced by 10% to reflect efficiency savings. The Administration is working with the UGC on the funding requirements for the sector in the 2004/05 academic year, and has yet to finalize the detailed calculations.


(b) Recurrent funding to the UGC sector is determined on a triennial basis. While we have information on the total funding for the current triennium (i.e. 2001/02 to 2003/04 triennium), funding for the 2004/05 rollover year and the 2005/06 to 2007/08 triennium is yet to be determined. Based on available information and planning targets -


(i) We have not requested UGC-funded institutions to deliver efficiency savings in the 2003/04 academic year, but will expect a 10% reduction in funding on this account for 2004/05, as mentioned in (a) above.


(ii) The UGC has informed the institutions of its decision on the timeframe for withdrawing subvention for publicly-funded sub-degree and taught postgraduate programmes. The number of affected programmes in each academic year from 2004/05 to 2007/08 is set out at Annex. Taking into account the above, the UGC is working with the institutions on the academic and funding proposals to be submitted to the Administration in due course. As the academic plans for 2004/05 and the 2005/06 to 2007/08 triennium are yet to be finalized, the amount of grants involved is yet to be determined.


(iii) and (iv) Recurrent funding is provided to the institutions through the UGC mainly in the form of block grants. At present, institutions are free to determine the amount of funds to be used for salaries and benefits, subject to compliance with approved pay scales and eligibility criteria for specific housing benefits schemes. With effect from July 1, 2003, institutions can also freely decide the remuneration package and housing benefits to be offered to their staff, and will set aside an appropriate amount of their block grant to meet these requirements. As such, information regarding institutions' expenditure on salaries and benefits will only be available after the end of the relevant years.


Insofar as Government funding is concerned, we will continue to adjust the portion of pay-related expenditure in the recurrent grants to ensure that the deregulation of salaries is cost-neutral. We will also continue to provide top-up funding for Home Financing Scheme (HFS) for eligible staff.


(v) Apart from providing recurrent grants and top-up funding for HFS, on a recurrent basis Government also refunds UGC-funded institutions of rates and Government rents payable by them. Funding in this regard reflects the actual amounts paid by the institutions.


(c) The Administration is working with the UGC on the institutions' funding requirements for 2004/05. The UGC will take into account all relevant factors, including the implications of reduced funding on the institutions' academic and resource plans, in assessing the funding requirements before submitting its recommendations to the Administration.


Annex: Number of publicly-funded sub-degree and taught postgraduate programmes to be affected


(I) Number of sub-degree programmes to be affected

                          Academic Year*

2004/05 2005/06 2006/07 2007/08

Institution

CityU 2 4 7 1

PolyU 1 1 9 0

(II) Number of taught postgraduate programmes to be affected

                       Academic Year*

2004/05 2005/06 2006/07 2007/08

Institution

CityU 15 6 4 0

HKBU 2 4 1 0

CUHK 3 7 0 0

PolyU 7 2 7 2

HKUST 11 4 1 1

HKU 31 5 0 0

Note:
CityU: City University of Hong Kong

HKBU: Hong Kong Baptist University

CUHK: The Chinese University of Hong Kong

PolyU: The Hong Kong Polytechnic University

HKUST: The Hong Kong University of Science and Technology

HKU: The University of Hong Kong


* Programmes affected in a particular year means programmes in respect of which subvention will start to be withdrawn from that year onwards. Students admitted before the year will not be affected.


End/Wednesday, June 18, 2003

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Last revision date: 18 June 2003
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