Summary of Achievements in 2000-01

In 2000-01, bureaux, departments and subvented organisations together will deliver savings of $1,148 million, which is 1.2% of the total recurrent operating expenditure subject to EPP§. These savings have accordingly been reflected in their reduced provision sought in the 2000-01 Estimates.

In principle, we allow bureaux, departments and subvented organisations to set their own pace in meeting with the 5% savings target by 2002-03. However, in order to release more money for meeting earmarked growth, we have stipulated a 1% mandatory savings requirement for 2000-01. As it turns out, more than 40% of bureaux, departments and subvented organisations have over-achieved this target.

Three have completed their 5% target in one go. Four are fairly close to 5%. Individual achievements are listed below. Those achieving savings more than 1% are marked with an asterisk (*).

§ There are some recurrent expenditure items which are exempted from achieving EPP savings.

These include expenditure on providing financial assistance to the needy (such as social security, student financial assistance and legal aid), pension payments and school expenditure.

Chief Executive's Office, Bureaux and Beijing Office

Departments

Subvented Organisations

Notes

1. Where the bureaux, departments and subvented organisations have started to deliver savings in 1999-2000, the amount reflects the cumulative savings achieved.
2. The new Environment and Food Bureau, the Food and Environmental Hygiene Department and the Leisure and Cultural Services Department established on 1 January 2000 are deemed to have fulfilled the 1% requirement in 2000-01 through considerable savings delivered upon the reorganisation of municipal services. They are required to achieve a cumulative 5% EPP savings by 2002-03.
3. Some of the savings of other subvented organisations are summarised here whilst others are subsumed under the responsible bureaux and departments.

Analysed by type of expenditure, the total amount of productivity savings of $1,148 million is made up of :

Personal emoluments and personnel related expenses include civil service staff salaries and allowances and other staff costs. Departmental expenses and other charges are the day-to-day operating expenses of departments. Subventions cover recurrent payments to non-government bodies in support of their on-going expenses.

The Environment and Food Bureau (EFB), the Food and Environmental Hygiene Department (FEHD) and the Leisure and Cultural Services Department (LCSD) have only been established since 1 January 2000 upon the reorganisation of municipal services. In the reorganisation, total savings of some $700 million were generated. Of this amount, $96 million were savings in direct expenses incurred by the former Provisional Municipal Councils. The remaining $604 million was derived largely from institutional efficiency, economies of scale, streamlining of staffing structure and other enhanced productivity initiatives. As $604 million well exceeds 1% of the aggregate annual recurrent expenditure of the new structure, EFB, FEHD and LCSD are deemed to have achieved the 1% savings required for 2000-01 under EPP. Like others in the Government, the new Bureau and Departments will be required to deliver the remaining 4% savings by 2002-03.

As in last year, although not incurring government expenditure and hence technically not subject to EPP, the Housing Authority and the five Trading Fund departments, namely the Companies Registry, the Electrical and Mechanical Services Department (other than those divisions which are funded from Government expenditure), the Land Registry, the Office of the Telecommunications Authority and the Hong Kong Post Office have also undertaken to reduce their operating expenditure through enhanced productivity. The five Trading Fund departments will reflect productivity gains achieved under EPP in the pricing of their services. Their savings are summarised below :

# i.e. projected recurrent expenditure for 2000-01 to meet the expected increases/decreases in business volume since 1998-99.