For discussion
on 8.3.99

LegCo Panel on Welfare Services Meeting on 8 March 1999
Implementation of the Enhanced Productivity Programme in the Social Welfare Department and Subvented Welfare Agencies

Purpose

This paper informs Members of the plans of the Social Welfare Department and subvented Non-governmental Organisations (NGOs) to implement the Enhanced Productivity Programme, with a view to achieving productivity gains amounting to 5% of operating expenditure by 2002-03.

Background

2. The Chief Executive announced, in his 1998 Policy Address, the launch of the Enhanced Productivity Programme (EPP) to improve productivity and efficiency in the delivery of services within the Government and the subvented sector. The productivity gains generated, and the resources so released from the baseline expenditure, will be redeployed to finance new or improved services for the benefit of the community.

3. EPP seeks to achieve lasting and sustainable improvements in service delivery. In 1999-2000, departments and subvented organisations are encouraged to deliver new or improved services with their existing resources through identification of productivity gains. The Financial Secretary has already given an account of these efforts in his 1999 Budget. By 2002-03, all Government departments as well as the subvented sector are expected to deliver cumulative productivity gains amounting to 5% of their baseline operating expenditure. Savings from these productivity gains will allow the Government to fund new initiatives whilst maintaining expenditure growth in line with the overall growth of the economy, which is expected to be lower than in recent years given the economic downturn. In parallel, the Administration will conduct Fundamental Expenditure Reviews in selected programme areas to initiate strategic improvements and to ensure that public services are delivered in the most cost-effective manner. The EPP is therefore a financial discipline that needs to be followed by the Government as well as the subvented sector.

4. Since the announcement of the EPP in 1998, the Social Welfare Department (SWD) has been actively discussing with subvented NGOs how best to work out strategies to achieve these productivity gains. SWD has conducted a briefing on EPP for the management of all NGOs to introduce the objectives and content of the Programme. Meetings with the Hong Kong Council of Social Service have also been held in view of the key role which the Council will play in helping NGOs achieve the EPP targets. We understand that proposals from the Council on the EPP initiatives are being prepared.

Productivity Gain Initiatives

5. To achieve the target cumulative savings of 5 % of baseline operating expenditure by 2002-03, SWD has been examining a number of strategies including :-

  1. simplifying procedures and removing duplication in work processes;

  2. rationalising services with a view to closing down those services which no longer meet changing community needs, and to reduce the capacity of or combine, under-utilised service units;

  3. optimising existing resources by absorbing additional work arising from the extension of services;

  4. using human resources more flexibly by employing more part-time or contract staff;

  5. contracting out work where it is more cost-effective;

  6. applying better use of information technology and office automation; and

  7. saving in consumption of energy and paper.
Present Position

6. The EPP initiative requires the concerted effort of both SWD and NGOs to achieve higher productivity. It is too early to report on specific initiatives to deliver the 5% productivity gains up to 2002-03. SWD will, however, through deployment of resources and productivity gains available in 1999-2000, deliver new or improved services in the coming year. In his Budget Speech, the Financial Secretary referred to the list of new initiatives in services provision to be funded by productivity gains in the coming year. These include as far as welfare services are concerned :-

  1. providing a Dementia Supplement to more elderly in residential care;

  2. strengthening SWD's Service Performance Section to implement the output monitoring system of welfare services;

  3. setting up in SWD, a Contract Management Unit to support contracting out initiatives;

  4. providing an additional 48 integrated child care centre places; and

  5. establishing five teams to examine the eligibility for admission into residential care homes for the elderly.
7. Whilst we will vigorously look for measures to achieve productivity gains, we will also ensure that these initiatives bring about lasting improvements in service quality, thereby achieving the ultimate aim of providing improved and more cost-effective services for the community. It is important to note that the quality of services will not be undermined as a result of this initiative.

Health and Welfare Bureau/ Social Welfare Department
March 1999