Bureau to restart ESF funding talks after 6-year pause

Foundation says it will fight for parity with government and aided schools

Liz Heron Sunday Morning Post - Dec 12, 2010

After a hiatus of more than six years, education chiefs are set to resume talks with the English Schools Foundation over its funding.

The Education Bureau says now is "an appropriate time" for a review of the ESF's subvention, which was withdrawn amid rancour over dysfunctional operational procedures and financial mismanagement.

The announcement was welcomed by chief executive Heather Du Quesnay and parents, who said they would fight for the subvention to be restored to its original level of parity with funding per student in government and aided schools.

"Given that the ESF has established its board of governors and various committees and has also by now put in place a series of reform measures under its governance structure, we consider that it is an appropriate time now to conduct the subvention review with the ESF," the bureau's statement says. "We would commence formal discussion with the ESF shortly and would work out the timetable with the ESF. The review will cover a number of areas including the ESF's role and positioning, its service targets, financial management and fee-related arrangements.

"We will take into account the series of governance and financial reform measures undertaken by the ESF since late 2008, and will review the education services currently provided by the ESF in examining whether the government should continue with the existing mode of subvention and other ... matters."

The ESF's Du Quesnay said: "We have been waiting for the government to start a review for a very long time. I didn't know that they were going to do that today. But I am pleased that they have.

"It is good news that they have set out their intentions so clearly. We know that the subvention has shrunk very significantly since 2003, when it was at its highest, and we do need to see it restored to a higher level.

"I will argue for the restoration of parity and we will put that on the table along with everything else. But I think we need a whole new basis for calculating and deciding what the quantum should be."

Dr Ada Cheng, spokeswoman for the ESF Concerned Parents' Group, which is campaigning against fee increases in the ESF, said: "These talks are long overdue but we are glad that they are finally taking place.

"All ESF students are children of taxpayers in Hong Kong and nearly 70 per cent are permanent residents. So we support the restoration of parity of funding with other Hong Kong children in publicly funded schools."

A government review of the ESF's public funding was put on hold in 2004, when the ESF called in the Audit Commission following claims by its former chief executive Jonathan Harris of dysfunctional management and poorly controlled finances.

Both the ESF's damning 2004 audit report and the 2005 Public Accounts Committee report that followed it called for the bureau to complete its review of the ESF's subvention quickly.

But then Secretary for Education and Manpower Arthur Li Kwok-cheung insisted the ESF complete the governance reforms recommended by the accounts committee before the bureau would resume discussions on the future of the subvention.

Revisions to the ESF Ordinance were passed by legislators in March 2008, with the key reform replacing its bloated 130-member foundation with a 26-seat governing board. That board sat for the first time in October 2008.

But the subvention has since remained static, amounting in the last school year to HK$269 million - 20.6 per cent of the foundation's income compared to 27 per cent in 2000-01, according to the ESF.

The ESF's government grant was frozen for three years at HK$300 million in 2000 following a government review in 1999 that recommended it should be phased out. It was cut by 12 per cent over the three years up to 2006-07, when it was HK$264.7 million.