Hong Kong’s civil service expected to cut contract staff amid deficit

Some Hong Kong government departments are expected to cut the number of contract staff as authorities seek to reduce spending amid a deficit that is forecast to reach nearly HK$100 billion (US$12.9 billion), the Post has learned. Sources revealed the strategy ahead of Financial Secretary Paul Chan Mo-po’s annual budget address on Wednesday, as academics and lawmakers also called for the use of artificial intelligence (AI) to reform the civil service and replace roles such as typists. Insiders said some departments began reducing the number of contract staff last year and were expected to make further cuts to the Post-retirement Service Contract (PRSC) Scheme and Non-Civil Service Contract (NCSC) Staff Scheme. “Civil servants will then shoulder all the work done by the axed contract staff,” one of the sources said on Friday. The insider added the government would not fire the workers immediately, but instead wait until the contracts finished and simply decline to renew them. The NCSC Staff Scheme was established in 1999 to provide a more flexible approach for employing temporary and short-term contract staff. Launched in 2015, the PRSC Scheme allows departments to adjust staffing levels and workforce composition more easily by engaging retired or retiring civil servants. In a reply to the Post, the Civil Service Bureau said government departments had the full authority and discretion to decide on the employment of contract staff under the two schemes, which were financed by the departments’ own budgets. “Given the nature and purpose of the employment, the number of contract staff in a department would vary from time to time,” the bureau said. It noted that the contracts were mostly short-term, with maximum durations of two years. The civil service employed 10,267 full-time NCSC workers as of June last year. Apart from contract staff, about 173,000 civil servants were employed as of March 31, 2024, a slight drop of 0.3 per cent compared with the year before. The figures indicated about 19,000 jobs were left unfilled. There have been growing calls to freeze or reduce wages of government workers, as staff-related costs soared to HK$156.2 billion in 2023-24, accounting for 25.98 per cent of operating expenditure. Some have also called for top officials such as the chief executive, ministers and 90 lawmakers to have their salaries reduced to demonstrate their willingness to endure tough times with ordinary residents. The government has implemented a policy of zero growth in the civil service headcount since the 2021-22 financial year. There will be 2,000 fewer civil service posts by the end of March this year compared with the staffing levels in the same month of 2021. Some scholars and lawmakers said the budget crisis represented a chance to reform the civil service through making better use of AI. Some also suggested slashing the pay of senior officials and downsizing the establishment by cutting certain jobs such as typists and meter readers. John Burns, professor emeritus at the University of Hong Kong’s department of politics and public administration, said AI was a key tool for improving civil service performance. “The use of AI and Web3 could trigger a third civil service reform in Hong Kong,” he said, advocating for a task force to examine their applications across the government. Burns emphasised that AI could enhance efficiency and accuracy in public service delivery, saying the technology was powerful in areas such as recognition of handwriting and speech, as well as problem-solving. The civil service underwent reforms in 1995 and 1999, with the former focused on streamlining management, training and development to improve public services. The 1999 reform, which was made in response to the economic challenges posed by the Asian financial crisis, aimed to cut costs and restructure the civil service. Measures included slashing the starting salaries for civil servants and introducing voluntary early retirement. Burns pointed to the clerical employment grade as particularly “ripe” for AI-driven changes, suggesting the chief executive and the city’s No 2 official push the initiative to ensure widespread adoption. He added that salary cuts among the chief executive, ministers and legislators would be “mostly symbolic but could indicate that our leaders are serious about tackling the budget deficit”. But the academic cautioned against across-the-board salary cuts, as they could negatively affect vital services. He recommended focusing on positions with low vacancy rates and stressed the need for a strategic approach to reducing salaries. Lawmaker Peter Koon Ho-ming said he supported salary cuts of about 10 per cent for principal officials as a symbolic gesture of responsibility, but was opposed to similar measures for civil servants, as their wages were determined by existing mechanisms. He suggested downsizing the civil service capacity from its current 190,000 to about 150,000, using Singapore’s leaner workforce as a benchmark. Koon noted the growing use of AI in government, such as online registration at the Education Bureau and the Hospital Authority’s use of generative AI for medical reports. He also called for increased AI adoption in elderly care and the use of big data analysis. Fellow lawmaker Paul Tse Wai-chun echoed the calls to axe unnecessary civil service positions and use AI to improve efficiency. He said automation could be used in clerical work, typist jobs and speech-writing roles. Tse also urged the government to reduce the number of staff accompanying officials at events. He said he supported salary reductions for legislators and top officials as a gesture of solidarity during tough times but cautioned against cuts for low-ranking civil servants. Wilson Wong, associate professor at the Chinese University of Hong Kong’s data science and policy studies programme, recommended shrinking the civil service by about 10,000 through productivity gains enabled by AI and new technologies. The reduction could be managed by limiting recruitment and relying on retirement and natural attrition, without requiring lay-offs, he said. He identified positions such as official language officers, water meter readers and typists as potential targets for cuts. But Federation of Civil Service Unions CEO Leung Chau-ting said typists were needed for handling documents, such as those for tenders, because of the diverse information, technical details and legal issues involved. “You cannot just copy and paste. It will be a big problem,” he said. “Only 130 typists remain now. Whenever any of them leaves, the position will be removed, until all the typist positions are eliminated.” Alexa Chow Yee-ping, managing director of executive search agency ACTS Consulting, urged workers to acquire skills resistant to AI replacement, such as counselling and creative work. She also warned that any reduction in civil service pay might lead to some quasi-government organisations following suit. Former housing and transport minister Anthony Cheung Bing-leung said he was not in favour of civil service pay cuts due to their potential negative impact on domestic consumption, recommending a salary freeze for civil servants instead. But he supported a clear plan for public sector reform, including restructuring, streamlining procedures and increasing digital technology adoption. In a reply to the Post on Friday, the Digital Policy Office said it had been promoting the use of innovative technologies, including AI, across various government departments to enhance service delivery and operational efficiency.

Hong Kong’s civil service expected to cut contract staff amid deficit

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Sources say civil servants will ‘shoulder all the work’ of axed contract staff, as some experts single out roles ‘ripe’ for AI disruption

Sources say civil servants will ‘shoulder all the work’ of axed contract staff, as some experts single out roles ‘ripe’ for AI disruption