Background

1. The Hong Kong Sports Development Board (SDB) as it exists today is a body integrating the former SDB, established for the purpose of promoting and developing sports and physical recreation in Hong Kong, and the former Hong Kong Sports Institute (HKSI), originally named Jubilee Sports Centre, which was established for the purpose of providing training and training facilities for elite athletes.

2. The Hong Kong Sports Institute was first established in 1982 by the Hong Kong Jockey Club and its operating expenditure has been funded by the Club until 1987 when an endowment grant of $350m was made by the Jockey Club to fund the HKSI's recurrent expenditure.

3. The Hong Kong Sports Development Board was established in 1990 by the Government, with an endowment grant of HK$200m also from the Jockey Club and its recurrent expenses were covered by a Government annual subvention grant with deficits funded by income from the Jockey Club endowment.

4. In 1994 prior to the amalgamation of the SDB with HKSI, the SDB's total staff establishment was 62, representing 26% of its total expenditure. Because of the need to provide coaches and support service to the training of elite athletes, and the need to manage and operate a very large sports complex for maximum usage, the HKSI's establishment in that year was 300, representing 68% of its total expenditure.

5. The combined establishment of both the SDB and HKSI was at their highest at 393 in 1995/96, representing 51% of total expenditure of the two institutions, when a larger number of coaching and technical support staff had to be recruited to strengthen the elite training activities in preparation for the Olympic Games and the Paralympics. It was through these intensive efforts that Hong Kong was able to cultivate its first ever Olympic Gold Medalist Lee Lai San, and other Gold medals in Paralympics Since that year, Hong Kong sports have enjoyed a boost of confidence and Hong Kong athletes were able to win last year a total of 17 medals in the Asian Games and 65 medals in the FESPIC Games.

6. With a view to achieving economy and efficiency the SDB and the HKSI were fully integrated as one organisation in 1998/99 and the SDB was able to reduce total headcounts by 36 to its present staff strength of 357. (291 permanent staff and 66 temporary posts). The integration resulted in savings in staff costs of over $10 million a year.

Current Situation





EXPENDITURE



7. The above table is a breakdown on the SDB's income and expenditure. It can be noted that 25% of the total expenditure was attributable to staff costs devoted to coaching and athletes support for Elite Training Programme. As explained in the Presentation Paper to the LegCo Panel, training of elite athletes is a 'labour-intensive' function requiring a lot of human resources. Coaches are vitally important in the training of elite athletes. Coupled with the high cost for employing these coaches, there are also costs involved in the support services, such as sports science, sports medicine, strength and conditioning, the physical training facilities and sports information and research etc. Further breakdown of these costs is as follows:-

Elite Training - staff expenses	25%

Head coaches and assistant coaches Sports science and sports medicine Strength and conditioning Athletes grants, scholarships, welfare, education and career support
	16%
Provision of athletes meals and accommodation services Training facilities provision and operation Athletes and training programme general support
	7%
Sports information, research and promotion related to elite training programme and activities
	2%

8. As promoting and developing sports is one of the core functions of the SDB, it is necessary to devote staff resources to liaise with NSAs and the municipal councils on programmes to develop sports, to administer block grant funding to NSAs and to plan and run programmes to promote sports in schools, as well as to provide development, education and accreditation to coaches and sports officials. Staff costs attributable to this function took up 8% of the SDB's total expenditure.

Sports Development - staff expenses	8%

Liaison with NSAs, ASF&OC and the municipal councils on programmes to develop sports Administration of block grants funding to NSAs and ASF&OC Support to development programmes, official training, offices and staffing of NSAs
	3%
Planning and running of sports projects and programmes to promote sports culture and awareness in schools, community and general public Coach development, education and accreditation
	3%
Sports marketing and promotion related to sports development programmes and activities (Note 1) Providing information and research services to NSAs on sports development
	2%

Note 1 The SDB's sports marketing function has generated over $100 million for the sports programmes of the SDB and NSAs since 1991.

9. 6% of the remaining staff expenses is attributable to SDB's revenue generating commercial operations, such as the sports residence and shop, catering, car parking, sports clubs and courses, administration of conference and meeting facilities.

Commercial Activities - staff expenses	6%

Marketing and operation of commercial revenue generating activities from sports and conference / meeting facilities, sports clubs and courses, sports residence and shop, commercial catering and car parking etc. (Note 2) Provision and operation of facilities related to supporting commercial activities

Note 2 Total revenue generated from commercial activities was nearly $40 million in 1997/98.

10. The remaining 6% of our total expenditure on staff costs is attributable to management and administration, which is considered reasonable expenses for any healthy service organisation.

Administration and Public Relations - staff expenses	6%

Finance, office administration, human resources and computer support General corporate publications and public relations