FROM DAY ONE of the short history of Hong Kong as a special administrative region, boosting the quality and quantity of education has been a priority of government. Chief Executive Tung Chee-hwa recognised that Hong Kong's future success lay in the quality of its people, and was ready to increase government spending accordingly. Statistics of what has been achieved since 1997, published by the Education and Manpower Bureau (EMB) this year, look impressive. Despite the economic woes since those heady pre-handover days, there has been no scrimping on education, with spending increasing every year, from $37.9 billion in 1996-97 to $61 billion now. Education is the largest single item of government spending, accounting for 23.8 per cent of total expenditure. Its share of GDP has grown from 3 per cent in 1996 to a more internationally respectable 4.8 per cent today. But the days of ever-increasing spending are gone, sending morale across schools and universities into the biggest tail-spin since the handover. The question now is whether they can take the cuts, and what the impact will be. Education, like other sectors, is being asked to make savings to help cut the budget deficit. 'Reprioritizing', 'reorganising' and 'reengineering' are the buzz words from the Education and Manpower Bureau (EMB) for its handling of the cuts. Universities so rapidly built during the twilight years of British rule face the brunt of the storm, but the drive for savings affects other areas too. Dozens of village schools face closure while lack of funding means that there is unlikely to be any early reduction in the numbers of students squeezed into standard classrooms. Money is being withdrawn from associate degree and taught postgraduate programmes. Students who threatened to strike this week, and their teacher supporters, fear that the cuts are a serious threat to the quality of Hong Kong education. Last week, Permanent Secretary of Education Fanny Law Fan Chiu-fun indicated that core basic education might not be spared some cuts, sparking concern among teachers. They know there is little fat to trim. Despite the investment since 1997, Hong Kong still spends only 60 per cent of the OECD average on schooling, according to the Programme for International Student Assessment (PISA) published this year. Cheung Man-kwong, legislator representing the education sector, opposes any cuts. Times are tough for most families. 'Their only hope is their children,' he said. Cutting the education budget would inevitably affect its quality, whether at school or university level. 'The Chief Executive promised to the public that he would invest more and more in education, even during hardship. Now he has broken his promise.' But some academics agree that the education sector can no longer remain immune from cuts. Professor Mark Bray, dean of the University of Hong Kong's Faculty of Education, who has written extensively on the financing of education, said: 'Yes, we are living beyond our means, not least because our means have declined.' The question, though, is how the smaller cake should be divided. Public debate began last winter, when Secretary for Education Arthur Li Kwok-cheung floated various options, from increasing student fees - since ruled out - to cutting the subvention for the English Schools Foundation - still on the agenda. But the universities are on the frontline for retrenchment, with the severity and speed of pending cuts causing widespread alarm across the sector. Although spending has increased this year because of commitments to on-going capital projects and reforms, the EMB is responding to the Financial Secretary's demand that public spending be cut by 11 per cent by 2008. Details were spelt out in March in a five-page budget paper to the Legislative Council's education panel. For the EMB, that would mean having to find savings of $4.95 billion in the coming four years, though Professor Li told students this week he would be urging the Financial Secretary to minimise cuts from 2005 to 2008. In the spring document, Professor Li reaffirmed a policy held since 1997, that the priority for investment should remain basic education - the kindergarten and school sectors - and maintaining the momentum of education reform. The thinking is that there is no point in having well-endowed universities if we have not invested enough in preparing school students for tertiary education and the workplace. This was not the case in the colonial era, when the kindergarten sector had the lowest priority and primary schools were not much better off. Compared with OECD countries, and competitors within the region, Hong Kong in the 1980s and 1990s lavished an unusually high proportion of its recurrent spending on the tertiary sector, which was expanded to cater for up to 18 per cent of the age cohort, up from about 5 per cent in the early 1980s. Between 1995 and 1997, for example, the tertiary sector accounted for 37 per cent of public education expenditure, compared with 25 per cent in the US and 12 per cent in Japan. The pre-primary and primary level received just 21.9 per cent in Hong Kong, while in the US it accounted for 38.7 per cent, and 41.8 per cent in Japan. Today, the tertiary sector here accounts for 29 per cent of the spending, compared with 59 per cent for the primary and secondary sectors. Changes in pedagogical understanding have occurred alongside macro economic change. It is accepted among policy makers and educators that unlike in the days when manufacturing underpinned Hong Kong's strength, the new service-based, 'knowledge economy' demands critical thinking and language skills among a far greater proportion of young people. Education reforms launched in 2000 are attempting to change the school system accordingly, though the impact remains limited. Schools have been poorly equipped for such a task, with standards below first world levels well into the 1990s and arguably still so today. Forty per cent of primary schools still share campuses, with morning and afternoon sessions. Teachers normally face between 35 and 45 students in a class, making it difficult to abandon traditional teaching styles. According to the Standing Committee on Language Education and Research's review published earlier this year, only 10 per cent of primary language teachers are trained to optimum levels, with relevant degrees and teacher training. At secondary level, 36 per cent of English teachers and 51 per cent of Chinese teachers are educated to such standards. While students and educators fear cuts to school and tertiary education, there is a consensus that when looking for savings, bureaucracy should be targeted before the classroom. Savings from measures such as merging the EMB and former Department of Education are said to total $906 million. Other bureaucracies under the EMB's umbrella that oversee sectors of education, including the University Grants Committee, the Vocational Training Council, and Student Financial Assistance Agency have been identified for a 10 per cent cut - $29 million. The budget paper also indicated that the EMB would be looking to the peripheries of the education system for other savings: hiving off non-core activities such as adult education; closing what it deems high cost and ineffective schools; reviewing the subvention for the ESF and the funding for education support services such as ETV, its Web site Hong Kong Education City and parent education drives. Yet despite Professor Li's assurances this week that he would fight for smaller cuts, universities still fear they will bear the brunt of the cuts. Ten per cent will be slashed from the UGC's block grant for the 2004-05 academic year but further cuts are expected for the triennium beginning the following year. Professor Cheng Kai-ming, senior adviser to the vice-chancellor at University of Hong Kong, is most concerned about the political environment in which vital decisions about the future of Hong Kong's education are being made. He said universities accepted that they could not remain immune from wider economic realities. 'But what is absent is sincerity and frankness,' he said. 'It has to be dealt with directly, to find real solutions, not by playing one side off against the other.' The tertiary sector, he said, was being targeted partly to avoid conflict with the more militant unions in the school sector. 'The tendency is to befriend the unionists and students - the most likely candidates to take to the streets - and to solve financial problems by concentrating on the weakest,' said Cheng. According to Bray, education has long suffered from piecemeal policy making by government, even though Hong Kong has had an Education Commission for more than two decades to act as a planning think-tank for the sector. 'All the expansions came without consultation with education bodies,' he said, particularly in universities and it was no different today. In 1989, governor David Wilson announced a dramatic expansion of tertiary education as a response to the Tiananmen Massacre and plummeting public confidence. 'The Education Commission was left in the dark,' he said. The same happened when Tung Chee-hwa announced in his 2000 policy address his target that 60 per cent of the age cohort should be educated to that level. 'Where does that come from? The tertiary sector is always gasping to reach new targets but never quite catches up. Sixty per cent comes out of a quasi politician's hat. You have whopping goals but can't pay for them with a very small tax pay. Nothing comes for free.' Cheng summed up the challenges: 'There are three issues to address: to what extent should there be a reduction in allocation for higher education, how that reduction is handled and what are the future directions for higher education? These should all be negotiated constructively. But what is happening now is a media war.'