Balance needed on Hong Kong social welfare subsidies
Non-government organisations provide valuable services to those in need, but they must also be accountable for the public funds they receive
Non-government organisations providing social services ranging from caring for the elderly to rehabilitating drug addicts are an integral part of the city’s welfare net.
Rightly, to provide financial certainty and enhance NGOs’ autonomy and flexibility in allocating resources, the government subsidises them with lump sums to pay salaries and other costs not covered by service-fee incomes. This is instead of reimbursing costs.
Reasonably, lawmakers expect these subsidised NGOs to comply with basic guidelines of accountability for expenditure of public funds advanced to them, such as reviewing and disclosing the pay of top employees annually.
In this particular regard, the Public Accounts Committee of the Legislative Council has specifically aired its dissatisfaction with the Social Welfare Department’s enforcement of the pay-disclosure guideline, part of general concern about lax supervision. The committee called for a proper and transparent monitoring system to help identify underperforming organisations.
The amount of money entrusted to these NGOs is not insubstantial. In 2016-17, the government granted a total of HK$12.5 billion in lump-sum grants to 165 NGOs. The committee is not the only watchdog to express concern. It was in fact responding to an earlier Audit Commission investigation, which found deficits incurred by subsidised NGOs rose by nearly 60 per cent to more than HK$57 million in the previous financial year. At the same time, some accumulated unspent reserves. The auditor also criticised the department for continuing to subsidise 14 agencies in full, despite their failure to meet performance targets five years in a row.
An issue that concerns lawmakers is rising staff turnover among subsidised groups and the impact on the quality of services. They urged the department to look into pay structures. Social work sector lawmaker Shiu Ka-chun said inequality of salaries between NGO and government social workers was one of the main problems with the lump-sum system. Subsidisation of social welfare must reconcile accountability and compassion.
Hopefully, a review of the system by a government-appointed task force since last year will strike this balance.