Supporting our Welfare NGOs

Steadfast Government support for welfare NGOs as we move forward with times

With Hong Kong facing unprecedented challenges in a fast changing economic landscape, social issues have become increasingly diverse and complicated. As we strive to remain competitive and continue to prosper, we spare no effort in caring for the vulnerable and needy of our society and have made great strides in the development of our welfare services.

We would not have risen to these challenges without the cooperation of the welfare sector. We have forged a partnership with welfare non-governmental organizations (NGOs) which currently provide 90% of our welfare services. Their contribution to Hong Kong's social welfare development has been significant. We treasure our partnership and will seek to enhance our collaboration.

To demonstrate the Government's unwavering support to NGOs and our determination to effectively implement the Lump Sum Grant Subvention System (LSGSS), the Government has decided to provide, from 2008-09 onwards, special annual funding of $200 million to welfare NGOs under the LSGSS. Our aim is to strengthen administrative support for the NGOs in the provision of quality welfare services.

Back in the 1990s, we decided to review the conventional subvention mode which was generally regarded then as bureaucratic, lacking in flexibility and accountability, and unable to respond in a timely manner to the ever changing service needs. The LSGSS, introduced in 2001, was the outcome of our extensive consultation with the sector and stakeholders.

Under this system, we no longer stipulate NGOs' staffing and salary structures or control their individual expenditure items. As a result, NGOs have greater say in their own management. They can deploy resources as they see fit and re-engineer their services to meet the ever-changing social needs in a timely manner.

The implementation of LSGSS not only demonstrates our respect for NGOs' autonomy, but also reflects our expectation that NGOs will strengthen their corporate governance and assume greater accountability whilst delivering appropriate services in a more cost-effective manner. At present, 162 out of the 173 subvented NGOs have opted to join the LSGSS. This testifies to its wide acceptance by NGOs.

LSGSS does not mean that the Government is less committed to welfare services or NGOs. On the contrary, since the introduction of the LSGSS, subventions to NGOs have increased significantly from $6.37 billion in 2000-01 to $8.04 billion in 2008-09. Having regard to the practical difficulties faced by NGOs in their transition to the LSGSS, we have also introduced for them various assistance measures. These included the Tide-over Grant and the Special One-off Grant, totalling $2.4 billion from the Lotteries Fund. With these grants, NGOs had more time and flexibility to make the adjustments necessary to meet their financial and/or staff commitments. NGOs were also supported by the Lotteries Fund to implement Business Improvement Projects to improve the efficiency of their management and service delivery.

Although the salary structures of staff in subvented NGOs are no longer linked to those of civil servants, we have provided NGOs with additional recurrent resources of $330 million in line with the 2007 Starting Salaries Adjustments and 2007-08 Civil Service Pay Adjustment. In December 2007, the Director of Social Welfare offered NGOs another package of relief measures amounting to about $300 million. The fact speaks for itself: the Government fully recognises the efforts of NGOs and is determined in helping NGOs better adapt to the LSGSS mode.

The LSGSS is the fruit of our long-time welfare subvention reform. Obviously, it has its merits. I appreciate that the sector still has a lot of views to offer over this system. I agree that it is time to review its effectiveness and explore room for improvement. I therefore decided to set up the Lump Sum Grant Independent Review Committee earlier this year. The committee is now reviewing the system in a comprehensive and objective manner. I am confident that it will provide useful and impartial advice to the Government.

Welfare subvention reform is no easy task. Its success hinges upon the full cooperation of the Government, NGOs, frontline staff and all other stakeholders. Together, we will have to share responsibilities and take ownership. My firm belief is that we all share a common vision: our welfare services should move with the times so that together we may serve the needy better.

With years of hard work, we have now laid a solid foundation for the LSGSS. Looking ahead, the Government will endeavour to perfect this system and NGOs can be assured of our steadfast support. I urge the sector to continue to join hands with us in enhancing Hong Kong's welfare services.

Ends/Thursday, March 27, 2008