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Review of District Organisations Consultation Paper 

27 July 1998 

Mr Michael M Y Suen
Secretary for Constitutional Affairs 
Constitutional Affairs Bureau 
3^rd Floor Main Wing 
Central Government Offices 
Lower Albert Road 
Hong Kong 

Dear Mr Suen, 

REVIEW OF DISTRICT ORGANISATIONS CONSULTATION PAPER 

With reference to your letter dated 2^nd June 1998 which invited the HKDF to submit our response to the Government's Review of District Organisations Consultation Paper, I'm pleased to submit our views. 

The HKDF believes this review is most timely, but is concerned that the consultation paper itself has failed to address the issues concerned in sufficient depth. Our view is that the opportunity should be taken to consider, from first principles, what model of local government is most appropriate for Hong Kong. 

We believe that it is important to maintain and further enhance the system of consultation that has previously been built up between the Government and the district organizations. However, in our opinion, it is now an appropriate time to move forward to seek to develop a suitable model of real, effective local government with responsibility for the provision of a range of key services, operated within the policy framework set out by the SAR Government. 

There is also a pressing need to ensure that our system of local government is properly supported by transparent and efficient management systems. 

Since the proposals put forward by the HKDF are more far reaching than the options set out in the consultation paper, we would very much appreciate the opportunity of meeting with the Constitutional Affairs Bureau to discuss them in more detail. 

Yours sincerely, 

Alan Lung Ka-lun Chairman

SUMMARY OF RECOMMENDATIONS

1. The review should consider what would be the most appropriate system of Local Government for the Hong Kong SAR (1.2). Local Government models in other jurisdictions should be studied for comparative purposes (1.3). A more effective system of Local Government than we have now needs to be established (1.4).
   
   
2. Review objectives are recommended (2): identifying and implementing a suitable local government system, empowerment, improved communication and efficiency, improved quality and compensation for council members. A variation of Option (iii) proposed by the "Review of District Organizations" consultation paper is proposed (4.1).
   
   
3. The local government should be given wider responsibilities; including broad supervision power in housing, primary and secondary education, development planning and control, health and social services within the "Area". The proposed functions of the Area Councils are suggested (5.1).
   
   
4. The Municipal Councils and District Boards should be merged (4.2) and a new body, Area Councils, should be formed (4.3) and between 5-10 Area Councils should be created (4.3). Membership of each Area Council should comprise between 25-30 councillors (4.4).
   
   
5. The SAR Government should assume responsibility for food safety (5.2).
   
   
6. The Area Councils will be required to provide their services within the SAR Government’s policy framework and financial resources approved by the Legislative Council (6).
   
   
7. Functional sub-committees need to be established within each Area Council (7.1).
   A radical overhaul of the supporting district organisation management structures is needed (7.2 & 7.3). Management of the local government should be improved. Members of the community with relevant expertise should be co-opted onto the sub-committees and remunerated for their services (8.1 & 8.2).
   
   
8. The remuneration of Area Council members should be substantially increased compared with that for present district board members (9).
   
   
9. The current terms of the Provisional Municipal Councils and Provisional District Boards should be extended to allow time for proper consultation and implementation (10).
   

1. Overview
1. The Hong Kong Democratic Foundation (HKDF) welcomes the Government’s initiative to undertake a review of the system of Municipal Councils (MCs) and District Boards (DBs).
   
2. However, the HKDF considers that the review was too superficial and under- researched, failing to address the issue in sufficient depth. Such an exercise should result in much more than a reshuffling of existing responsibilities, rather it should be the opportunity to consider from first principles what sort of local government is appropriate for Hong Kong. Our society has become too monolithic and centralised and it is therefore important to give more opportunity for diversity in all dimensions, including local government.
   
3. As part of the review, a detailed study of models of local government in various overseas jurisdictions should be undertaken for comparative purposes.
   
4. The HKDF believes that in order to fully realise the concept of "Hong Kong People Ruling Hong Kong" to improve the delivery of Government services to the people and to underpin the development of a truly democratic Hong Kong, it is essential to establish a much more effective system of local government than we have at present.
   
   
2. Objectives
1. The HKDF considers that the objectives of such a review of district organisations should seek to:

• Identify a proper and suitable system of local government for the SAR
  
• Maintain and enhance the system of consultation between the Government and district organisations
  
• Empower its system of local government with fiscal responsibility and full accountability for the services it is to provide
  
• Improve the effectiveness and efficiency of local government institutions through good management practice
  
• Encourage high quality candidates to stand for election
  
• Improve the terms of compensation for elected members
  

3. Deficiencies of the Present System
1. Our existing two-tier system of district organisations suffers from the fundamental flaw of being a hybrid. The Provisional MCs operate as a very limited organ of local government in their very narrow areas of responsibility; food safety and environmental hygiene, arts and culture, sports and recreation. In these areas they have been conferred with political power in that they can set and implement policy and are allocated funds to carry out these responsibilities.
   
2. On the other hand, the Provisional DBs are limited to the role of purely advisory bodies.
   
3. Both sets of organisations have also seen their democratic credentials emasculated and a diminution of their elected membership, through the retrograde step of the re-introduction of appointed members. While the HKDF acknowledges the value of the availability of expert opinion to the deliberations of the MCs and DBs, we believe there are other, more effective ways of providing this, which we will propose later on in this paper.
   
4. It is also our view that the remuneration of the members of these organisations and of the DBs, in particular, is too low to adequately compensate for the work required and this may deter some talented members of the community in seeking election.
   
   
4. Consolidation
1. The HKDF recommends a variation of option (iii) proposed by the "Review of District Organization" consultation paper.
   
2. We agree that the MCs and DBs be merged into one single organization.
   
3. Our recommendation is that between 5 to 10 new Area Councils (ACs) be created.
   
4. Membership of each AC will comprise around 25-30 directly elected Councillors, depending on AC population size.
   
   
5. District Council Functions
1. Although we would like more in-depth study into the appropriate form of local government organization to be continued, our recommendation at this point is that serious consideration be given to empowering ACs with responsibility for the following functions:
   

Environmental Hygiene
Recreation & Culture
Environment
Housing
Primary & Secondary Education
Development Planning & Control
Health
Social Services


2. The HKDF agrees with the consultation paper that the Government should assume responsibility for food safety.
   
   
6. Scope of Responsibilities
   While the concept of local government devolves responsibility and accountability for providing the selected services to the relevant area organization, these responsibilities need to be undertaken within the policy framework set out by the SAR Government and financial resources approved by the Legislative Council.
   
   
7. Management Structures
1. To enable the ACs to carry out their functions more effectively there will be a need to establish a system of functional sub-committees.
   
2. Recent experiences, such as the problems with the Hong Kong Stadium and the library design process have shown an urgent requirement for a radical overhaul of the supporting district organization management structures and the implementation of performance management and monitoring programmes.
   
3. There has also been evidence from the operation of our MCs that more objective and critical judgement could be exercised in the spending of public funds. Appropriate criteria and management systems should be introduced to improve this area of decision making.
   
   
8. Expert Advice
1. We propose that in the place of appointed members, members of the community with relevant expertise be co-opted onto the various sub-committees to provide expert advice during the deliberations.
   
2. We further recommend that co-opted members be appropriately remunerated for their services.
   
   
9. Remuneration
   We recommend that the level of remuneration for the new AC members be increased substantially compared with that of Provisional District Board Members, in recognition of their increased responsibilities and to enable them to devote a greater amount of time to their duties.
   
   
10. Role of Other District Level Institutions
    The role of other district level institutions, such as the Mutual Aid Committees, Owners Corporations, Area Committees and District Management Committees should also be evaluated as part of a comprehensive review of district organisations.
    
    
11. Extension of Term of Municipal Councils and District Boards
    To better facilitate the smooth implementation of this more comprehensive system of Local Government, the HKDF recommends the present terms of the Provisional Municipal Councils and Provisional District Boards be extended for a further 6 to 12 months beyond the end of 1999.
    
    
12. Conclusion
    In addition to fulfilling the Objectives, as set out in paragraph 2.1, a purpose of this proposed comprehensive system of Local Government is to create competition among the various ACs in the provision of effective services. ACs with better quality services will serve as benchmarks for the provision of services. This in turn will exert pressure on ACs providing lower standard services to upgrade, in the face of the threat of the failure of their councilors to achieve re-election by dissatisfied voters. As a result the community as a whole will benefit from an ongoing effort to continually improve the standards of the services provided by the ACs.