I refer to your editorial of June 21 headlined, 'Obstacle course'.

Regarding the subvention system, we agree that change is necessary, because the existing system is too inflexible, complex and bureaucratic. The Hong Kong Council of Social Service recognises that the proposed Lump Sum Grant (LSG) package is, in fact, introducing a fundamental change to the current social welfare system, not merely an administrative change. It will have implications for social welfare planning, financing, quality of service, government and non-governmental organisation (NGO) partnerships, monitoring systems, human resources and financial management, as well as labour relations in the NGOs. In short, it will involve cultural change in both the subvented and the governmental social welfare sectors.

The revised LSG package is not so 'generous' as perceived by your editorial which talked about 'officials being so generous when offering more money to entice the 181 NGOs into accepting the scheme'. Although 'the concerns about adequate funding for provident fund contributions on behalf of veteran staff and to offset insufficient tide-over grants have been met', most agencies are still worried about financial difficulties in the long run, because the calculation of the benchmark is based on mid-point salaries.