A controversial public funding system for Hong Kong’s social welfare organisations is here to stay, but top executives will be forced to disclose their pay in a bid to improve transparency and accountability, a government review has recommended.
Industry representatives denounced the plan on Monday as too little, too late. It failed to address concerns about a key funding calculation formula they claim has enriched the top, led to problems in frontline talent retention and worsened services amid high demand during the Covid-19 pandemic, they argue.
In place since 2001, the annual subsidy goes toward helping NGOs cover part of the salaries, employee welfare expenditure and other administrative costs they can not pay for through their own funds or service fee income.
Do you have questions about the biggest topics and trends from around the world? Get the answers with SCMP Knowledge, our new platform of curated content with explainers, FAQs, analyses and infographics brought to you by our award-winning team.
The government has said the system simplifies public funding and offers flexibility to NGOs to spend the money as they see fit.
In the report released on Monday, a task force under the Labour and Welfare Bureau made 30 recommendations, including retaining the lump sum grant programme.
It uses the midpoint of salaries of all staff on an official pay scale, leaving top executives to decide the exact pay packets of individual workers, including that of themselves.
The task force also recommended five key areas of reform, including developing a “standing mechanism” to conduct reviews on service targets and their nature to improve quality and keep pace with the “changing needs” of users. It also suggested requiring recipients to submit proper expenditure accounts to the government and the public and to end a loophole whereby the grant can be used to subsidise supposedly self-financing activities of various NGOs.
On the enhancement of accountability and governance, the task force suggested senior executives in the top three tiers of the bodies disclose their remuneration and to make public the pay structures and starting points of regular positions funded by the grant.
The Social Welfare Department has been tasked with discussing with stakeholders and implementing the recommendations which will be gradually adopted from 2022-23.
Cheung Chi-wai, external vice-president of the Hong Kong Social Workers’ General Union and a member of the task force responsible for reviewing the subvention system, said he was disappointed in the report which had made more or less “zero progress”.
“Despite expressing the views from frontline social workers, the report did not adopt much from what we proposed,” Cheung said. “For one, keeping the subvention benchmark at midpoint salaries – which is itself a defect in the system – means [NGOs] will continue to be relatively conservative in calculating [frontline staff members’ salaries].”
He said that although some proposals by the government were more welcomed, such as having NGOs disclose the pay structure and starting points of regular posts under the grant system, a transition period of five years was “too long”.
The Hong Kong Council of Social Service, an umbrella organisation representing hundreds of NGOs, also expressed disappointment in the recommendations.
It urged the government to speed up the manpower review under the proposed standing mechanism to increase the frontline workforce properly, and warned keeping the “one-size-fits-all” midpoint salary allocation failed to recognise experience and accumulated professionalism in a worker.
Professor Wong Yu-cheung, of Chinese University’s social work department, said the coronavirus pandemic had heightened demand in social work services, especially from teenagers and the elderly. An “obsolete” pay scale based on the perceived number of social workers needed in each rank could not cope with rising demand, Wong said.
But Billy Mak Sui-choi, an associate professor of finance at Baptist University, said he believed increases in recurrent expenditure such as the lump sum grant amounting to less than HK$20 billion (US$2.57 billion) needed to be considered carefully, especially as the fiscal deficit was expected to widen further this year due to the pandemic.
This article Proposed fixes for government funding of NGOs in Hong Kong criticised as too little, too late first appeared on South China Morning Post