Financial Secretary Antony Leung Kam-chung pledged yesterday that basic government services would not be cut as the administration came under fire for seeking to slash spending by $3 billion. Mr Leung said all departments would be given flexibility in the way they used funds. 'We will continue to provide necessary services. They will not be cut,' he said. Mr Leung said a 1.8 per cent cut in government spending next financial year was only an 'indicator' for departments and not a definite target. He said any changes to expenditure would need to be finalised after Chief Executive Tung Chee-hwa outlined initiatives in his Policy Address in January. The government indicated on Monday it would cut its recurrent expenditure of $210 billion by 1.8 per cent in 2003-04. This is to make up for a $3 billion shortfall in savings that had been anticipated as a result of the cut in civil service pay. Mr Leung allowed for savings of $6 billion in his Budget in March. But the pay cut agreed by the Executive Council in June, based on trends in the private sector, was not as substantial as he had expected. The cost-cutting exercise to make up the shortfall will not hit payouts on Comprehensive Social Security Assistance (CSSA). Civil service pensions will also be unaffected. Debate is now focusing on where the cuts will be made. In this financial year, the education and health and welfare sectors take up the greatest share of government expenditure. They account for 24.1 per cent, 15.8 per cent and 15.7 per cent respectively. But Council of Social Services executive director Christine Fang Meng-sang said social welfare groups should not be targeted as in recent years they had endured a 10 per cent cut in spending. 'We do not wish to affect the quality of services. The room for a further cut is small,' she said. Unionist legislator Lee Cheuk-yan criticised the government for breaking its promise to increase recurrent spending by an average of 1.5 per cent a year until 2006-07. He said the spending cuts amounted to a major change in policy and the financial secretary should consult the Legislative Council. Mr Lee has written to Mr Leung urging him to make a further clarification at the Legco financial affairs panel.