Unjust sense of entitlement, or a bargain for the public purse?

It would appear that government funding in its schools is HK$50,000 per pupil, against a subsidy of HK$21,000 per child in ESF schools

PUBLISHED : Monday, 12 November, 2012, 12:00am
UPDATED : Monday, 12 November, 2012, 7:15am

There's been far too much harmony in these pages lately. Jake van der Kamp and Monitor have agreed about almost everything recently, including what a lousy idea the government's new property taxes are.

Too much consensus is a bad thing, especially among newspaper columnists. They thrive best in an adversarial atmosphere. So my eyes lit up when I read Jake's column in yesterday's Sunday Morning Post about the English Schools Foundation (ESF).

In a nutshell, Jake argued that the ESF should be no more entitled to government subsidies than any other international schools. If expatriates cannot afford to educate their children in Hong Kong in the absence of a government subsidy, they should either demand more pay, put their kids into the government's Chinese-language schools, or pack up and go home.

I have to take issue with Jake here. On a couple of points, he's wide of the mark.

First, those pestilential expats. According to the ESF's latest breakdown of its pupils' ethnic origin, 44 per cent are Chinese and another 30 per cent are other Asians or "Eurasians". Just 22 per cent are classed as "Caucasian", which means they are of European descent, not that they come from Azerbaijan.

And of the 12,922 pupils attending ESF schools last year, 69 per cent were Hong Kong permanent residents.

As a result, we can safely assume that far from having a handy home to pack up and go back to, for the vast majority of ESF pupils and their parents, Hong Kong is their home.

Second: the subsidies. For the school year ending in summer 2011, the ESF received just short of HK$270 million in government subventions.

That cash made up 20 per cent of the ESF's overall income, and worked out to a subsidy per pupil of almost HK$21,000.

That sounds generous. But to work out just how generous, we need to compare it with the money the government pays to educate children in its own schools.

I couldn't find any enrolment figures specifically for government schools, direct subsidy schools and bought place scheme schools. But working back from the number of teachers employed in the public sector and the education bureau's figures for student-teacher ratios, it appears that for the latest financial year, there were 658,000 pupils attending public sector schools.

The government provided almost HK$33 billion in direct funding for those schools, which works out at a cost to the public purse per pupil of HK$50,000.

In other words, the ESF is a relative bargain, costing the government HK$29,000 less per pupil than its own school system.

Still, Jake argues that the ESF doesn't deserve its subsidy and that it should be treated no differently from any other international schools in Hong Kong.

But the other international schools do get government subsidies, mainly in the form of favourable grants of land.

Take the private school that's just opened in Tuen Mun, operating under a franchise from Harrow School in London.

To fund construction work, the government has provided it with an interest free loan of HK$273 million.

Assuming the company running the school would have to pay HSBC's prime rate to borrow that sum in the market, the loan equates to an annual subsidy of HK$13.65 million, or HK$18,200 for each of its 750 pupils; not much less than the ESF receives.

But that's only part of the story. The government also handed the Harrow franchisee a free 3.7 hectare site that could have fetched around HK$1.5 billion at a government land auction. That's a lump sum subsidy of HK$2 million per pupil.

That makes the ESF subvention look cheap.

Of course, its fees and levies remain eye-wateringly expensive, especially considering the organisation is sitting on HK$919 million in accumulated reserves, but that's another story entirely.