For discussion
on 11 January 1999
Legislative Council Panel on Welfare Services
Review of the Social Welfare Subvention System
PURPOSE
This paper informs Members of the proposed way forward following completion of the Review of the Social Welfare Subvention System.
BACKGROUND
2. At the meeting of the Provisional Legislative Council Panel on Welfare Services held on 14 November 1997, Members were informed about the progress of the consultancy review on the social welfare subvention system and the proposed way forward.
The Review
3. All four phases of the Review have recently been completed. The Consultants have concluded that the existing system requires a major revamp. To address the problems, the Consultants have recommended that:-
- clearer sets of performance measurement should be introduced to make subvented non-governmental organisations (NGOs) more accountable for their service quality;
- the input-based funding system should be changed so as to provide more flexibility to NGOs to manage their resources; and
- a cultural change should be initiated to arouse the Sector's awareness of the need to deliver services in a responsive, cost-effective and competitive manner.
Service Performance Monitoring System
4. NGOs are generally supportive of the introduction of a Service Performance Monitoring System under which performance can be evaluated against a set of well-defined standards. With the advice of the Consultants and the assistance of the Sector, 19 Service Quality Standards (SQSs) (details at Annex A) have been formulated. These define the procedures for managing and controlling service quality and set out the criteria for achieving the standards. In addition, implementation handbooks for these standards have also been prepared. A performance assessment methodology to assess NGOs' compliance with these standards has also been drawn up and agreed with the Sector. A pilot study on this methodology is being conducted with the active participation of the Sector. We intend to implement the SQS assessment mechanism by phases over three years with the first phase comprising five SQSs to be introduced in the last quarter of 1998/99, and the second (another five SQSs) and third phase (remaining nine SQSs) to be introduced in the last quarter of 1999/2000 and 2000/01 respectively.
5. Separately, the Consultants have recommended that formal Funding and Service Agreements (FSAs) (a sample FSA is at Annex B), be drawn up to describe the respective roles and responsibilities of Government as a funder and NGOs as service providers. Of the 103 subvented services, agreement on 34 services has been secured. We plan to implement the FSAs on a phased basis, with the first phase of 34 FSAs to be introduced in the first quarter of 1999/2000 and the second (37 FSAs) and third phase (remaining 32 FSAs) to be implemented in the first quarter of 2000/01 and 2001/02 respectively.
6. The Service Performance Monitoring System will be applied to both Social Welfare Department (SWD) and NGO service units. The assessment process includes two elements, ie a self-assessment to be conducted by the service unit and an external assessment by SWD. Both assessments will cover the three main aspects specified in the FSA, ie SQSs, essential service requirements and performance output. During the implementation period, if a service unit finds that it does not comply with any of these aspects, it is required to prepare an action plan to set out the tasks it needs to undertake and then to implement this action plan. Each service unit will be required to report the outcome of the self-assessment annually to SWD. This will be followed by a periodic external assessment to be undertaken by SWD once every 3 years. A Service Performance Section has been set up in SWD to administer this Monitoring System. Trained assessors of the Section will conduct a desk-top audit on all the self-assessment reports received and undertake the external assessment.
Output-based Funding Model
7. On the funding issue, the Consultants originally recommended the introduction of an "Unit Grant" system to replace the existing funding system. Under this system, NGOs which deliver the same type and quality of services would receive the same level of subvention based on the average of the actual subvention for the specific service. They would be given full discretion in the use of their resources, including determining their staff structure and remuneration package. There would be no topping-up or clawing back of subvention.
8. The Sector found the "Unit Grant" approach unacceptable. Members will recall that we have subsequently proposed an improved formula. Under this Fixed Funding formula, subvention to NGOs would be based on the mid-point salary of the recognised staffing structure (minus 2% for natural wastage and turnover) plus 6.1% to meet provident fund contributions. This formula would be implemented through a transitional period of 2 years. While there will not be any topping up if an NGO incurred a deficit, NGOs would be given full flexibility in the use of their resources and would be allowed to keep an accumulation of unspent funds up to 20% of their annual subvention. NGOs could opt to join the new Funding Formula on a voluntary basis but all new units would be funded according to this new formula.
9. Of the 179 NGOs consulted, only 6 have indicated any possible interest to join. Their main concern is that the mid-point salary provision and provident fund contribution is insufficient to meet their expenditure, particularly as the Sector matures and more staff are paid above the mid-point. Considerable unease has also been expressed by staff about any possible de-linking from the civil service pay-scale.
10. Despite a number of improvements to the Formula (ie to offer 98% mid-point salary provision immediately upon NGOs' joining the new funding formula or commencement of an operation) and a revised proposal to allow them to keep any surplus capped at 30% of their annual expenditure (against the earlier cap of 20%), this revised funding package is unlikely to bring any significant increase in the number of NGOs interested in joining the new funding scheme.
11. In the light of the concerns from the Sector and the general culture and management philosophy of the Sector, the Administration has decided not to implement the fixed funding approach at this stage.
12. However, the proposed Fixed Funding Formula is in fact quite similar to the lump sum grant model currently adopted by an integrated service project. Under this pilot project, interested agencies were encouraged to submit applications to compete for the project on the basis of quality of services to be provided (not pricing). The successful bidder is provided with a fixed sum based on the mid-point salaries of an agreed staffing structure and other charges. There is free virement of subvention between personal emoluments and other charges among the component service units, but there is no topping up of deficits nor clawing back of surplus.
13. The response of NGOs to this pilot project was very positive when it was introduced in 1997 in the Tung Chung complex. Seven agencies submitted bids for the project. The successful bidder, SKH Diocesan Welfare Council, considers this new funding model to be very effective in giving it flexibility in the use of resources, thereby improving the overall quality of service. Although the lump sum grant model currently only accounts for a very small proportion of the subvented sector, its initial acceptance in a bidding context suggests that there is room for wider application.
14. To achieve greater cost-effectiveness and to enhance productivity, we have also examined the feasibility of contracting-out selected services through open bidding by all sectors (subvented NGOs, non-profit making bodies or the private sector), taking into account their specific nature, operational requirements and service delivery mode. We intend to contract out some services on a pilot basis, beginning with new home-help service units. As the service would be open for bidding again after a finite period, this should encourage competition and in turn, improve cost-effectiveness in service delivery.
Other Streamlining Proposals
15. In evaluating the Fixed Funding formula, the Hong Kong Council of Social Service (HKCSS) has recommended that the existing subvention system should be streamlined. As a result, a package of streamlining measures to help NGOs has been drawn up with the assistance of HKCSS and some major NGOs (details at Annex C).
Cultural Change
16. The existing subvention system has been in use for many years. In order to ensure the smooth implementation of the recommendations of the Subvention Review, it will be necessary to educate and re-train practitioners in the Sector, both departmental and NGO staff. This is necessary so as to bring about changes in their perceptions and cultural values with regard to the provision of cost-effective quality welfare services to the community.
17. To achieve this goal, we will organise a series of training programmes which target practitioners at all levels, including NGO Executive Board members, departmental and NGO managerial and front-line supervisory staff. The training programmes will improve their knowledge of providing quality services and explore how such services can be delivered. We have already secured $14 million from the Lotteries Fund to organise 18 different types of training courses (comprising 168 training sessions for over 20,000 trainees ranging from senior management to service unit managers) as well as the production of marketing and training materials. These training programmes commenced in the third quarter of 1998/99 and will be spread out over three years to tie in with the phased implementation of the Service Performance Monitoring System. A proposed implementation plan for the training programmes under the Service Performance Monitoring System is at Annex D.
Central Administrative Support
18. The Administration acknowledges the need to support NGO efforts to undertake the new service performance measures. $27 million has been secured to strengthen the provision of central administrative support to NGOs. Having examined the scope of work involved in the implementation of the Service Performance Monitoring System, we consider it important to strengthen the supervisory support to NGOs. Supervisors will be required to play a direct and leading role in helping service units meet the SQSs, essential service requirements and performance output as specified in the FSA. These resources will also be used to strengthen NGOs' financial management capability through the provision of additional accounting support.
CONCLUSION
19. The ultimate objective of the Subvention Review is to ensure that SWD and NGOs can provide more cost-effective, customer-focused and output-driven services. Although the Administration and the Sector have been unable to agree on a new funding system, we have been able to agree and develop a clear set of measurable standards and performance-based funding and service agreements to objectively assess the performance of agencies and individual service units. Following implementation of the Service Performance Monitoring System, the welfare sector will be able to deliver services more efficiently and effectively, make continuous improvement and enhance service quality to ultimately, benefit their clients and the community.
Social Welfare Department/
Health and Welfare Bureau
January 1999
SUB11-1A.DOC
Annex A
SERVICE QUALITY STANDARDS
Principle I : Provision of Information
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| Standard 1 : | The service needs to ensure that a clear description of its purpose, objectives and mode of service delivery is publicly available.
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| Standard 2 : | The service should have available current, documented policies and procedures describing how it will approach key service delivery issues.
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| Standard 3 : | The service needs to maintain accurate, current records of service operations and activities.
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Principle II : Service Management
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| Standard 4 : | The roles and responsibilities of all staff, managers, the Management Committee and/or the Board or other decision making bodies should be clearly defined.
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| Standard 5 : | The service needs to implement effective staff recruitment, development, training, assessment and deployment practices.
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| Standard 6 : | The service needs to have an effective mechanism by which clients, staff and other interested parties can provide feedback on the service's performance.
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| Standard 7 : | The service is required to regularly review and evaluate its own performance.
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| Standard 8 : | The service has to demonstrate effective financial management.
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| Standard 9 : | The service should comply with all relevant legal obligations and professional codes of practice.
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| Standard 10 : | The service has to take all reasonable steps to ensure that it provides a safe physical environment for its staff and clients.
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| Principle III : Service to Clients
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| Standard 11 : | The service unit is required to ensure that clients have clear, accurate information about how to enter and leave the service unit.
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| Standard 12 : | The service unit needs to have a planned approach to assessing and meeting client needs (whether the client is an individual, family, group or community).
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| Standard 13 : | The service has to ensure that, as far as is practical, it co-ordinates its activities with other services to promote the best quality outcomes for clients.
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| Standard 14 : | The service needs to support the maintenance of client family relationship and social relationships.
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Principle IV : Respect for Client Rights
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| Standard 15 : | The service needs to respect the client's right to self-determination as far as is practicable.
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| Standard 16 : | The service needs to respect the client's rights in relation to private property.
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| Standard 17 : | The service needs to respect the client's rights for privacy and confidentiality.
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| Standard 18 : | Each client and staff member should be free to raise and have addressed, without fear of retribution, any complaints he or she may have regarding the agency or the service.
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| Standard 19 : | The service is required to take all reasonable steps to ensure that clients are free from abuse.
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ref: sqs.doc
Annex B
Funding and Service Agreement
Social and Recreational Centres for the Disabled
I Service definitionIntroduction
Social and Recreational Centres for the Disabled provide disabled persons with opportunities to participate in and to organise a variety of activities which meet their social, recreational and developmental needs.*
Purpose and objectives
The overall aim of Social and Recreational Centres for the Disabled is to facilitate the integration of disabled persons into the community.
The objectives of centres include:
- to enable disabled persons to make meaningful use of their leisure time
- to provide opportunities for disabled persons to develop their potential and well-being
- to encourage the development of interpersonal skills and enhance the development of personal relationships
- to encourage the active participation of disabled persons in the community.
Nature of the service
The focus of service provision may vary from centre to centre in order to meet the special needs of different target groups.
* The sector perceives it as cost neutral and does not mean to require additional resources by inclusion of "developmental needs" under Introduction.
II Performance standards
The service operator will meet the following performance standards.
Outputs
- Total number of organised social, recreational and sporting activities within one year shall be
| 240 | for S & R Centres* for the visually impaired persons
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| 270 | for S & R Centres* for the hearing impaired persons
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| 470 | for S & R Centres* for the physically handicapped persons
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| 670 | for S & R Centres* for the mentally handicapped persons
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| 1500 | for sports associations for the mentally/physically handicapped persons
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- Total attendance of persons with and without disabilities** at organised social, recreational and sporting activities within one year shall be
| 5800 and 1930** | respectively for S & R Centres* for the visually impaired persons
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| 3080 and 1030** | respectively for S & R Centres* for the hearing impaired persons
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| 3380 and 1130** | respectively for S & R Centres* for the physically handicapped persons
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| 9170 and 3060** | respectively for S & R Centres* for the mentally handicapped persons
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| 19000 | for sports associations for the mentally / physically handicapped persons
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* S & R centres" refer to Social and Recreational Centres
** Figures with ** refer to persons without disabilities
The ratio/proportion of disabled and able-bodied persons is set at 3:1 (except 2 sports associations in which no ratio/proportion is set).
Essential service requirements- Services will be open for at least 11 sessions per week and a minimum of 44 hours per week (time of opening may vary but shall be reported by individual service operator).
Opening Hours *: _______________________ .
- There will be input from registered social worker**
- Different staffing requirements would be made for Hong Kong Association for the Mentally Handicapped and the Hong Kong Association for the Physically Disabled to exempt them from employing registered social worker due to their unique service nature.
Quality
Service operators will meet the requirements of the Service Quality Standards.
* The time of opening is to be specified by the agency for each centre.
** Social worker is to be governed by the social Workers Registration Ordinance.
III Obligations of SWD to service operators
The SWD will undertake the duties set out in the General Obligations of SWD to service operators.
IV The basis of subvention
[This section will, in due course, set out the basis on which SWD subvents this service.]
Annex C
Review of the Social Welfare Subvention System
Agreed Streamlining Measures to the Existing Subvention System
1 SWD will produce a handbook on staff appointment to facilitate Non-Governmental Organizations (NGOs) in making their own assessment when vetting staff qualification and working experience for employment purpose.
2 SWD will speed up the release of conditional PE by releasing the conditional grant upon NGOs' application and production of supporting documents, and by conducting the detailed vetting of these applications afterwards.
3 SWD will waive the need for NGOs to submit supporting documents when applying for supplementary subvention for the employment of relief workers, provided that these documents are properly kept by the NGOs for audit inspection by SWD.
4 SWD will lift the expenditure limit for the item of repair, maintenance and minor purchases under Other Charges (OC), provided that food cost is separated from OC provision.
5 SWD will review and provide a more up-to-date and comprehensive list of unrecognized items of expenditure under OC to facilitate NGOs in exercising proper use of the subvention on recognized items only.
6 SWD will review the application forms for the annual subvention allocation with a view to simplifying the information required and reducing the number of forms to be completed.
7 SWD will automatically adjust the amount of conditional PE (in respect of vacant posts) and unconditional PE (in respect of filled posts) in the annual subvention allocation based on the latest staffing position capturing staff changes of NGOs before 31st of March, without requiring NGOs to apply for such adjustment.
8 SWD will release subvention allocation for new service units which commence operation after the cut-off date of the financial year if application for subvention is received before the cut-off date.
9 SWD will allow holding-against of Typist post by Clerical Assistant because these two posts share the same mid-point and that NGOs prefer to employ Clerical Assistants to Typists.
10 SWD will allow holding-against of senior posts by junior posts upon demonstration of recruitment difficulty. To avoid abuse, reference lists of permissible holding-against arrangements will be drawn up and NGOs will be required to report any holding-against arrangements to SWD for record/inspection purpose.
Annex D
Implementation Plan of the SPMS and the Training Schedule
First 5 SQSs in Phase 1 : Nos. 1, 4, 10, 11 & 18
Second 5 SQSs in Phase 2 : Nos. 3, 12, 16, 17 & 19
Third 9 SQSs in Phase 3 : Nos. 2, 5, 6, 7, 8, 9, 13, 14 and 15
Ref: IP
