Welfare's bottom line
A FREE ECONOMY and fair competition, these are concepts which have long been close to the hearts of most people in Hong Kong. Indeed, lawmakers, especially those from the Democratic Party, have spent years pushing for legislation to ensure open competition, arguing this would bring down prices and improve the quality of services.
But it is a different story when it comes to social welfare, a service industry which costs the Government more than $6.4 billion each year.
Legislators, social workers and academics argue that introducing competition in this area would not cut costs and, instead, would adversely affect the quality of services, including those provided to the most vulnerable in society such as children, the elderly and the disabled.
This contradiction is why Carrie Lam Cheng Yuet-ngor, the Director of Social Welfare, looked so agitated and frustrated last week. The Government is now trying to open to the private sector the market for residential-care services to the elderly but is facing strong opposition. A Legco panel even passed a resolution last week opposing the scheme.
'I came from the Finance Bureau, and we believe in the free economy. That's why some people say I am not suitable to be the Director of Social Welfare,' Ms Lam joked.
At present, most social services are delivered by non-governmental organisations (NGOs) through the provision of subsidies. There is almost no competition among these groups, and the price paid by the Government is fixed.
This system has long been criticised as inflexible and inefficient. For example, a typical home for the elderly has 13 ranks of officers, from senior welfare officers to cooks and cleaners.
The Government wants to change the situation. It launched a pilot test in 1999 on meal services for the elderly by contracting out projects for competitive bidding between the public and private sectors. The results were impressive, cutting costs by 20 per cent and exceeding estimates of how many meals would be served by 26 per cent. A survey of the elderly people involved in the test found they were generally happy with the service.
'I think the market should have a role to play in social services,' Ms Lam said.
She said services for the elderly were an area ripe to be opened to more operators, as there were already many private homes in operation.
'Five years ago, there was no regulation of elderly homes. But now, 500 out of 516 homes are licensed, and the rest will be so by the end of the month. The monitoring system is already here,' she said.
And there is room for economy. Residential care for the elderly in a Government home currently costs $8,918 per month per resident. This does not include rent, furniture and equipment. But if the Government buys bed space in a private home, the cost is only $6,492 including rent, additional facilities and even a profit for the operators.
'These figures can tell the likely scope for higher productivity,' said Ms Lam.
She stressed money was not the prime concern, because under the proposed new scheme, bids made in an open tender would be judged mainly on the quality of the services offered. Only 20 per cent of the points credited under a scoring system would be allocated to the price.
However, legislators and social workers have strongly objected to the proposal. They claimed service quality would worsen and workers would be exploited because private operators always wanted to make a bigger profit. Hui Yin-fat, the director of the Hong Kong Council of Social Service, an umbrella group for the SAR's 180 NGOs, said the Government's proposal was not aimed at efficiency but cost-cutting. 'The Government keeps saying that it is not doing it for cost-cutting. If not, why does the Government do it?'
The veteran social worker pointed out that 'compassion' was vital in the provision of welfare services. 'Does the private sector have it? All it has in mind is profit-making.'
Mr Hui said the NGOs would not be opposed to private companies running government homes for the elderly if quality could be ensured. But this was unlikely. 'Just look at the many reports about poor-quality homes for the elderly. How can the administration say that quality can be guaranteed?'
Peter Cheung Kwok-che, president of Hong Kong Social Workers' General Union, said quality of service was hard to evaluate. 'You can measure the nutritional content and temperature of a meal to tell whether the delivery service is good or not. But you can never measure the attitude of the staff towards their clients,' he said.
Mr Cheung noted staff in privately run homes for the elderly had to work 12 hours a day, while employees of NGOs worked eight hours a day.
But Ms Lam rejected these comments: 'We have the responsibility to make the best use of money to serve the maximum number of people. In other words, if we find a service rated 80 marks which helps 100 elderly people, we will opt for it rather than a service rated 100 marks [which serves fewer].
'A responsible government is not just going to take care of clients in the residential homes but also other elderly people who sleep on the streets or live in their own home.'
Ms Lam said she was puzzled that welfare groups could not face up to the challenge. She said the NGOs were capable of being highly competitive, as was shown by the pilot test on meal services. Only 1.5 out of nine contracts were awarded to the private sector. 'If you ask me whether there is a level playing field under our existing proposal, my answer is no. They are still in an advantageous position, with their strong experience.'
She said she was surprised by the strong opposition and the bureaucratic culture among NGOs. 'It has been suggested it is too troublesome to write project proposals [for the bidding] which cost $20,000 each. Oh, come on! For a service with an annual value of $63 million, is it too much to spend $20,000 for a proposal? This is not a waste of money; this is part of the process to ensure that we get value for money.'
Ms Lam said the Government had no plans to extend the proposed scheme to other areas, such as caring for the disabled and services for families, because there was no ready private sector in place.
'But I think we have to accept the fact that after the financial crisis, if we want to be competitive, life will not be as easy as in the past.'
'If we want to be competitive, life will not be as easy as in the past'
Martin Wong is a staff writer for the Post's news desk (firstname.lastname@example.org)
Quinton Chan is a staff writer for the Post's Editorial Pages (email@example.com)