Academics are warning of a severe deterioration of Hong Kong's social services when the system of public funding for non-governmental welfare organisations changes next year. Under a new government funding arrangement, special one-off grants totalling $826 million were proposed as two-year replacements for tide-over grants, which were introduced nearly five years ago to help NGOs adjust to a new funding system. The tide-over grants end next March, affecting the 163 NGOs. 'The termination of the tide-over grants will have a very severe financial impact on NGOs as the special one-off grant will not help much,' Chinese University adjunct associate professor of social work Fung Ho-lup said. A recent survey of 102 NGOs by Baptist University found more than 95 per cent of the respondents said they would have difficulty surviving without the tide-over grants. More than 85 per cent said they would face financial problems within three years of the grants ending and may have to file for bankruptcy. Only about a quarter felt the special one-off grant would offer some relief. 'The government cannot be so wishy-washy, saying that they will provide grants for two years and then no more. The special one-off grant is not a good solution,' Sammy Chiu Wai-sang, Baptist University's head of social work, said. The survey also found that 77 per cent of respondents would be unable to balance their books during these two years. Mr Fung said cash-strapped NGOs would most probably have to cut salaries or at least freeze wages. Switching to contract or short-term staff, plus layoffs would also be necessary. He said natural staff attrition from retirement over the next five or six years may help NGO finances but that service quality would still be affected.