Hong Kong scout association set for big subsidy cut after profiting from its Tsim Sha Tsui hotel

Home affairs minister Lau Kong-wah admits ‘inadequacies’ in handling subventions given to the group and promises to cut future subsidies

PUBLISHED : Tuesday, 27 June, 2017, 8:04pm
UPDATED : Wednesday, 28 June, 2017, 1:15pm

The Scout Association will see a substantial cut in its government funding after the charity came under fire over big earnings from a hotel it runs in Tsim Sha Tsui, the home affairs minister said on Tuesday.

The revelation was made in an audit report released in April which revealed gaping loopholes in government rules over the handling of discounted land and the tax-exempt status of charities.

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The report pointed to one charity which it said received HK$300 million from the Social ­Welfare Department and the Home Affairs Bureau over the past two decades, even though it had accumulated a net profit of HK$829 million between 1994 and 2012.

Secretary for Home Affairs Lau Kong-wah admitted there were “inadequacies” in handling the subventions given to the group and promised to cut future subsidies.

“The target of cutting subventions for the group was not up to speed and scale,” Lau told the Legislative Council’s public accounts committee on Tuesday .

He did not identify the group, but did not deny it when lawmakers asked questions about the Scout Association, which built a headquarters and hotel on Austin Road.

The land was granted by the government at a heavily discounted price of HK$30 million in 1989.

“The association was only charged for the car park, but now it is earning hundreds of millions every year from the hotel upstairs,” Civic Party lawmaker Tanya Chan said.

She criticised the government for overlooking the profit-making nature of the group and being too lenient in giving out subsidies.

The Scout Association of Hong Kong replied on Wednesday morning, saying that it will work closely with the Home Affairs Bureau and other related government departments on plans to reduce subventions to the association.

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In the 2014-15 fiscal year, the Home Affairs Bureau gave the association HK$25.66 million – 70 per cent more than in the previous year and double what was planned– even though it said in 2013 that subsidies should be cut for four consecutive years.

The bureau agreed that the large funding injection in 2014 was the result of Chief Executive Leung Chun-ying’s policy of doubling subventions for all uniformed groups to boost youth work.

Lau admitted too much public money was given to the group, which contradicted the original policy of granting a concessionary site to allow the association to stand on its own feet.