For discussion on
13 January 1999

EC(98-99)22

ITEM FOR ESTABLISHMENT SUBCOMMITTEE
OF FINANCE COMMITTEE

HEAD 146 - GOVERNMENT SECRETARIAT:
EDUCATION AND MANPOWER BUREAU

Subhead 001 Salaries

Members are invited to recommend to Finance Committee the retention of the following supernumerary post in the Education and Manpower Bureau up to 29 February 2000 to enable the continued secondment of a suitable officer to the Employees Retraining Board -

1 Senior Principal Executive Officer (D2)
($116,650 - $123,850)

PROBLEM

The Employees Retraining Board (ERB) needs the continued service of a Senior Principal Executive Officer (SPEO) to implement new and important initiatives so that the ERB can provide adequate, effective and quality training services. The supernumerary post, which makes the existing secondment arrangement possible, is due to lapse on 28 February 1999.

PROPOSAL 2.The Secretary for Education and Manpower (SEM) proposes to retain the supernumerary SPEO post for a further year up to 29 February 2000 for continued secondment of a suitable officer to the ERB as its Senior Deputy Executive Director.

JUSTIFICATION

3.The ERB created a post of Senior Deputy Executive Director on 1 September 1997, which has since been filled by an SPEO seconded from the Education and Manpower Bureau occupying a supernumerary post up to 28 February 1999. The post is created mainly to support the implementation of recommendations arising from the review of the Employees Retraining Scheme (ERS). A summary of the recommendations is at Enclosure 1. To date, all of the recommendations have been put into effect, except for the proposal to set up a placement-tied payment system for the training bodies.

4. Although the results of the above review have substantially been completed, we see a need for continuing with the secondment arrangement. This is because the ERB has just had a change of Executive Director and is about to embark on a number of other important initiatives in the coming year, including implementation of a new strategy to improve the quality and cost-effectiveness of retraining from 1999-2000 onwards, development of a qualifications framework for its programmes, and implementation of the recommendations of two consultancy studies on the ERB's financial management and course administration systems.

New strategic plan to improve the quality and cost-effectiveness of retraining

5.With the rise in unemployment rate from 2.3% in the three months ending October 1997 to a record high of 5.5% in the three months ending November 1998, the total number of applications for retraining in the first six months of 1998-1999 has also increased by a hefty 49% over the same period last year, to 60�07. In response, the ERB has already developed new training programmes, improved referral services for employers and employees, and expanded the total training capacity.

6.ERB is now developing a new strategy to further improve the quality and cost-effectiveness of retraining from 1999-2000 onwards. Its long-term objectives are to establish a continuous training system which can equip the unemployed with the requisite skills to re-enter the labour market and sustain their employability. The key aspects of this strategy are as follows -

1. Enhance the quantity and quality of courses and services

   To develop a more elaborate evaluation system and performance indicators for training bodies; standardise similar courses, upgrade their quality and seek employers' recognition; repackage training courses in modular forms etc.

2. Upkeep market intelligence

   To conduct more systematic and regular research into the manpower needs of the labour market for dissemination to the training bodies to facilitate the evaluation and improvement of the various training courses and related services.

3. Strengthen partnership with employers and stakeholders

   To enhance communication and develop strategic partnerships with employer/trade associations, employee groups, training bodies and concerned Government departments through setting up steering/advisory committees on categories of core courses--soft skills, information technology, language, property management, domestic helpers etc.

4. Enhance cost effectiveness

   To strengthen the system of financial and auditing control over training bodies, and make a greater and more effective use of computer facilities in its provision of courses and services.

5. Foster a positive corporate image

   To coordinate the public relations and marketing measures on ERB's services in a more systematic and cost-effective manner, and liaise more closely with mass media and interested parties.

To give effect to this multi-faceted strategy, it is essential that ERB formulates the detailed action plans and timetables for the various measures in close consultation with its major training bodies from early 1999 onwards, so as to ensure the smooth implementation of such measures during the ensuing years. This calls for an experienced senior officer who possesses proven administrative experience, a thorough understanding of the operation of the Employees Retraining Board and its training bodies, and good working relationship with these training bodies. This would help secure their concerted support for the new strategy during its first year of implementation.

Development of a qualifications framework

7.As announced in the 1998 Policy Address, we will develop a qualifications framework for programmes provided by the Vocational Training Council (VTC) and ERB in order to provide a well-structured education and training ladder for both the employed and unemployed. Together with the VTC, ERB will have to provide significant input to the development of this framework. To this end, it is setting in train the preparatory work by liaising with both major employers' associations and training bodies on how best to consolidate the curriculum of its various training courses, and seek proper recognition of the relevant qualifications. The Senior Deputy Executive Director has to assist the Executive Director in playing an important coordinating role in this project. We aim to complete the preparatory work and draw up the initial proposals by the end of 1999 or early 2000.

Consultancy studies on financial management and course administration systems

8.The implementation of new strategic measures necessitates a holistic review of ERB's administrative and financial management systems. This is especially important, given that after several years of rapid growth, the ERS now comprises a huge network of some 60 training bodies which are independent non-Government organisations and yet working in close partnership with ERB in providing different training programmes. To this end, ERB recently undertook two studies to address how best to revise ERB's funding arrangement with its training bodies and course administration mechanism, with a view to strengthening overall quality control and ensuring the provision of value-for-money training in the longer term. The studies also aim at compiling a comprehensive Course Administration Policies and Procedures Manual for ERB. The major recommendations of these two studies are as follows -

1. to rationalise the division of responsibility and resource allocation between ERB and its training bodies regarding labour market research and marketing of training courses;

2. to convert the existing course-based funding mechanism to one based on annual training budgets from the training bodies;

3. to devise a full set of indicators (apart from placement rate of graduate trainees) for evaluating the performance of both training bodies and training courses; and

4. to standardise the curriculum of similar mainstream training courses to economise planning resources, while continuing to devise different types of courses in response to changing market needs.

These recommendations in effect call for a total revamping of ERB's financial relationship with its training bodies and course administration system. The successful implementation of these recommendations depends essentially on the careful planning and tactful steer by ERB's top management, as well as the support and co-operation of the training bodies. To this end, ERB needs to go through intensive and protracted negotiations with the heads of some 60 training bodies. Such work is by no means normal operational duties. The continued secondment of the SPEO as the Senior Deputy Executive Director is therefore necessary to assist the Executive Director in handling this strategic task, with a view to completing it by early 2000.

9.In the light of the above time-critical developments, we propose to retain the supernumerary post of SPEO for another year up to 29 February 2000, and to continue the secondment of the incumbent officer to fill the post of Senior Deputy Executive Director in the ERB. This will provide the existing Executive Director, who has taken up the post only since mid-October 1998, with the much-needed continuity for overseeing the smooth implementation of the new initiatives and for general administrative support.

10.The Executive Director of ERB will review whether to retain the post of Senior Deputy Executive Director within ERB's establishment by the end of 1999.

11.The main duties of the SPEO post, and the organisation chart of the Office of the ERB, are at Enclosures 2 and 3 respectively.

Encls. 2&3

FINANCIAL IMPLICATIONS

12.The notional annual salary cost at MID-POINT and the full annual average staff cost of the proposal, including salaries and staff on-cost are -

Rank	Notional Annual Salary Cost at Mid-point $	Full Annual Average Staff Cost $	No. of Posts
SPEO	1,443,000	2,528,556	1

13.We will recover from ERB the full cost, including the staff on-cost, of this proposal.

BACKGROUND INFORMATION

14.The ERB was established in October 1992 under the Employees Retraining Ordinance. It is tasked with administering the ERS which seeks to help workers adjust to changes in the labour market by providing them with suitable retraining courses. ERB is a funding agency of the retraining programme but not a direct provider of training. It is funded by the recurrent income from the levy paid by employers of imported workers at the rate of $400 per worker per month of employment. The retraining programme is currently provided by 61 training bodies at 124 training centres and over 148 types of courses are being offered. 15.Under Section 3 of the Employees Retraining Ordinance, the ERB comprises a Chairman and a Vice-Chairman who are non-Government officials, as well as representatives of employers, employees, Government departments and training bodies. The Executive Office of the Board, which provides executive support and implements the Board's decisions, is headed by an Executive Director. The post has been filled by a civil servant on secondment until mid-October 1998 when the incumbent is appointed following open recruitment.

16.The supernumerary SPEO post, which is the subject of this proposal, was first created by SEM under delegated authority for six months from 1 September 1997. In February 1998, Members approved the retention of this post for another year up to 28 February 1999 vide EC(97-98)64.

CIVIL SERVICE BUREAU COMMENTS

17. The Civil Service Bureau supports the proposed retention of the supernumerary post to enable the continued secondment of the SPEO to provide the needed continuity and support to ERB in implementing various strategic initiatives.

ADVICE OF THE STANDING COMMITTEE ON DIRECTORATE SALARIES AND CONDITIONS OF SERVICE

18.As we propose to retain the SPEO post on a supernumerary basis, we will report the retention of it, if approved, to the Standing Committee on Directorate Salaries and Conditions of Service in accordance with the agreed procedure.

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Education and Manpower Bureau
January 1999

Enclosure 1 to EC (98-99)22

Recommendations arising from the
Review of the Employees Retraining Scheme

1.	Whilst the Employees Retraining Scheme (ERS) should primarily focus on providing retraining for the unemployed with no more than lower secondary education and aged 30 or above, with flexibility on age and educational attainment in individual cases, the Employees Retraining Board (ERB) should also provide retraining for the employed who need to receive basic skills training so as to sustain their employment.
2.	To extend the ERS to cover new immigrants who will be subject to the same admission criteria as applied to local residents.
3.	The retraining programme should in future take the form of a specially-designed package of job-oriented package of job-oriented intensive training courses, aimed at helping the retrainees to secure and hold down their jobs.
4.	(a)All the existing Skills Upgrading Courses (which account for 2% of all the part-time retraining courses) will be transferred to the Vocational Training Council (VTC) in phases.
	(b)The ERB should continue to provide the General Skills Courses (which account for 80% of the part-time retraining courses) on condition that they meet three new criteria: (i) quality assurance; (ii) cost-effectiveness; and (iii) availability of a suitable fee charging system.
	(c)The VTC should collaborate with the ERB and the training bodies on the quality assurance and accreditation of their General Skills Courses, as well as on possible bridge-over arrangements between the courses offered by both training authorities.
5.	The On-the-Job Training Programme in its present form should be gradually phased out but the concept of on-the-job training should be retained as part of the overall retraining programme for the unemployed. On this basis, the ERB should work in collaboration with the training bodies and employer groups to review the Programme, with a view to devising a new and improved programme.
6.	The existing rate of retraining allowance should be maintained for all full-time courses, except for those attending one-week courses. Additional safeguards should be put in place to prevent abuse by retrainees.
7.	The ERB should critically evaluate the number and composition of the training bodies with a view to improving their effectiveness and monitoring their performance and quality.
8.	An objective system for assessing the performance of the training bodies and to ensure that the training will be placement-focused should be set up. Based on these twin principles, the ERB should work out a reasonable and acceptable formula with the training bodes and implement the system over a reasonable period of transition of say, one year.

Enclosure 2 to EC(98-99)22

Job Description of the Senior Deputy Executive Director
of Office of Employees Retraining Board
(Senior Principal Executive Director)

Main Duties and Responsibilities

1.To assist the Executive Director in overseeing the smooth operation of the ERB, including internal administration, financial control and audit, resource management and Management Information System;

2.to assist the Executive Director in overseeing the financial management of the Employees Retraining Fund;

3.to assist the Executive Director in administering the Employees Retraining Ordinance and recommending revision or amendment to it as and when required; and

4.to supervise two consultant studies relating to financial control and course administration respectively, and implement the recommendations arising therefrom including revisions to the funding arrangements for training bodies.