CIVIL SERVICE REFORM - CONSULTATION DOCUMENT
12 May 1999
Civil Service Bureau
10/F, West Wing, Central Government Offices
11 Ice House Street, Central
CIVIL SERVICE REFORM - CONSULTATION DOCUMENT
We are writing with our comments on the above consultation paper.
Most of the reform proposals are of a human resources nature and
concern the rank and file of the Civil Service. As such, many of the
reforms are unobjectionable, and if implemented, helpful.
However, the reform is being conducted at the wrong level. If the
Civil Services performance is unsatisfactory and it is losing public
confidence - which we believe to be the case - the responsibility for
this lies with the senior ranks, not with the rank and file. The main
problem is that the policy secretaries, and the Chief Executive
himself, are failing to accept responsibility for their mistakes. This
in turn is due to the absence of any proper system of accountability
of the executive to the people. Meaningful reform of the Civil Service
must start by addressing this fundamental issue of accountability to
The second fundamental issue that must be addressed is the
separation of the policy-making level of the Civil Service - which
should be politicised and politically accountable - from the
bureaucracy - which should be politically neutral. Such separation can
be achieved by removing the post of Policy Secretary from the Civil
Service proper. Policy Secretaries are politicians and should be
accountable for their actions, to the extent of losing their jobs in
case of failure of their policies. This would be equivalent to the
ministerial system practised in virtually all democracies.
We attach for your reference an article from our newsletter which
sets out more comprehensively the full scope of reforms that we
believe are needed in Government:
Reform of Government –
towards an Agenda.
Thus the scope and aims of the exercise are much too modest. A much
more fundamental review is needed along the lines set out above. And
even the human resource issues covered by the present exercise should
be addressed much more radically than they are in the paper. Further,
the tone of the paper is such as to leave little confidence that even
the modest reforms proposed will be carried out.
Our detailed comments on the consultation paper are as follows:
- We wonder why the paper makes no reference to the various Civil
Service management reform initiatives that have taken place over
the years, such as the financial management initiatives of the
mid-1980s, the Public Sector Reform announced in 1989, the
performance pledges, departmental resource accounting, etc. Surely
it would be logical to first consider what, if anything, was
achieved under those exercises before embarking on a further
exercise. Was anything achieved? Are there any lessons to be
learnt in respect of the current exercise?
- We also wonder why no reference is made to overseas experience
of Civil Service reform. Such omission is surprising, because most
developed countries have gone through major fundamental programmes
to reform their civil service over the last couple of decades, and
a wealth of experience is available for Hong Kong to tap. In many
of these countries, activities formerly performed by the civil
service have been privatised or contracted out to the private
sector, or have been transferred to specialist agencies operating
independently but in accordance with publicly determined
objectives. No reference is made in the paper to these important
overseas developments, which, on the face of it, are applicable to
- We find the above omission particularly surprising in view of
the fact that the Financial Secretary referred in his budget to
changes in the mode of providing public services. The changes he
envisaged included privatisation, contracting out public services
on a competitive basis, private sector participation, and
corporatisation of government services. These initiatives, if
carried out, will surely impact the civil service reforms proposed
in the present consultation paper, and in fact require a much more
- We also question the appropriateness of the review being carried
out by civil servants themselves. In other countries reform was
often initiated by ministers – i.e. not civil servants - and
made use of independent consultants and experts. We wonder why
there appears to be no independent input in the present
- No reference is made to the effect of policy of localisation,
which whatever its merits, must have stripped the Civil Service of
a significant part of the talent and experience that it formerly
- Section 1.5 Principles of Reform. These purported
"principles" are in fact all constraints or limits on
the exercise. For example, it is proposed that the reforms must
not affect stability, must be gradual, must take due account of
broader considerations, etc, etc. While we would not deny that
these six factors must come into consideration, we would not
expect them to be elevated to the status of
"principles". Giving them such status makes it easy for
the civil service to resist reforms. For example, almost any
measure could be represented as affecting "stability".
Instead, we would expect as principles factors relating to
external objectives: the need to ensure value for taxpayer’s
money, the need to ensure performance, the need to ensure
- Section 1.6. Objectives. The objectives, while unobjectionable,
are not ambitious or clear enough. They are incremental rather
than fundamental, and are too vague for it to be clear whether,
after implementation of the initiatives eventually adopted, they
have been achieved or not.
- Scope (1.7). As stated above, the scope is too narrow.
- Entry system. We agree that employing new civil servants on
agreement terms is a promising idea. However, it should be applied
not only to new civil servants but also to existing ones. It is
not acceptable that fundamental reforms of this nature should only
apply to new recruits: this would mean that it would take a
generation for the reforms to feed through the entire civil
service. We are aware that in overseas jurisdictions, such as the
UK, entire units have been forced to resign and reapply, under
open competition, for their former jobs. Measures of this kind are
needed, in appropriate places, to effect real change.
- Appointment system (2.7). We support the recruitment of
outsiders, on a competitive basis.
- Permanent terms (2.8). We agree with the redefinition of
"permanent" to ensure performance.
- Retirement system (2.9). We support the idea of funding
retirement payments to civil servants. At present, pension
liabilities are unfunded, which means a very large hidden burden
is passed on to future generations of taxpayers. This is unsound
fiscal policy and unsustainable in the long run. Funding
retirement payments to civil servants will inspire more confidence
in civil servants that they will actually be paid when they
retire. However, we would not agree with the conversion of the
current pension (defined benefit) scheme to a provident fund
(defined contribution) scheme. Notwithstanding that provident
schemes are the norm in the private sector, a pension scheme meets
the needs of the retiree much better, and need not be excessively
expensive if sensibly framed.
- Management-initiated retirement (2.12 and 13). In cases of
unsatisfactory performance the non-performing staff should simply
be fired, as they would be in the private sector, rather than
merely forced to retire.
- Pay principles (3.1). Broad comparability with the private
sector may not be an appropriate objective since the nature of
work, risks and rewards are so different. The difference has been
highlighted by the current recession, in which many in private
sector have lost their jobs, or suffered loss of salary, while the
civil servants experience neither. Private sector salaries are a
reference point, but substantial account must be taken of the
fundamental differences between the public and private sectors.
- Performance pay (3.5). We agree with the considerations set out.
As regards cost-neutrality vis a vis the current system, this must
not be taken to mean that any performance element should be
restricted to the monetary equivalent of the current increments.
This would result in the performance element being far too small.
Rather, a substantial proportion of the current base salary should
be converted into a performance element, and paid in accordance
with performance. As concerns civil service remuneration as a
whole, we suggest that the Singaporean system, of giving civil
servants a bonus related to economic growth, and cutting their
salaries in a recession, is worthy of consideration.
- Fringe benefits (3.9). We agree that these should be encashed,
and therefore, in effect, cease to exist, i.e. all civil servants
should receive cash remuneration out of which they would fund all
their housing, travel and other expenses themselves. This
principle should not be restricted to new recruits, but should be
introduced across the Civil Service.
- Performance management (5.1). We suggest consideration be given
to peer- and user assessments, to supplement assessments by the
We hope that the above comments are helpful.
Thank you for your attention
Alan LUNG Ka-lun
Enclosure: "Reform of
Government – towards an Agenda", HKDF Newsletter, Issue 9,
|Policy Paper - page revised 23-09-2002
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