545 Higher Education 13 (1984) 545-552 Elsevier Science Publishers B.V., Amsterdam

Printed in the Netherlands

HONG KONG UNIVERSITY A N D POLYTECHNIC GRANTS COMMITTEE

R. C. G R I F F I T H S *

Formerly Director Inter University Council for Higher Education Overseas, U.K.

ABSTRACT

The political uncertainties surrounding Hong Kong's future as a British Crown Colony have not inhibited either the Hong Kong Government or its particular version of a University Grants Committee (U GC) system from devising and planning a continuing expansion of higher education at a time when most other countries are levelling off or contracting their own. This article deals with the many unique features of the Hong Kong situation of which perhaps the most important is the nature of the Hong Kong Government - traditionally colonial and potentially authoritarian, not elected yet highly sensitive to Chinese opinion both internally and externally, and highly efficient in most of its management activities in spite of a strongly laisser faire tradition. The Hong Kong UGC system is charged with much wider planning functions throughout higher education than elsewhere and is responsible for the polytechnic as well as the two universities hence its trans-binary designation as the University and Polytechnic Grants Committee. While this has helped its overall planning and academic guidance roles, it has involved it in severe difficulties in relation to its basic financial role which requires it to develop methodologies of financial assessment of Polytechnic costs for which no overseas models exist. Its academic membership is still entirely from overseas, with inevitable repercussions on its ability to arrange adequate collective discussion and its reliance on its local secretariat who act as the Government's de facto Department of Higher Education.

The Hong Kong University and Polytechnic Grants Committee (UPGC) shares with its fellow members of the UGC family the basic role of acting as a generally acceptable intermediary between the government it serves, and which appoints it, and the state-supported institutions of higher education which that government assigns to its care. The Hong Kong U P G C is however unusual in several respects. All its academic members - currently twelve out of a total of * Mailing address: 2 St. Albans Villas, Highgate Rd, London NW5 IQU, U.K. 0018-1560/84/$ 03.00 9 1984 Elsevier Science Publishers B.V.

546 nineteen members - are serving members of overseas institutions and come together collectively in Hong Kong about one week or a little more every year on average. They also meet periodically in London. Its key Medical Sub-Committee follows much the same pattern. The UPGC Chairman is not, as in Britain, drawn full-time from academic life but is a top-ranking local lay figure serving on a part-time basis. The current Chairman is a Chinese judge of the High Court in Hong Kong; his predecessor, then Chairman of a major British firm in Hong Kong, has become Hong Kong's Financial Secretary. Overseas members also visit Hong Kong individually when need or opportunity arises. The U P G C is also exceptional in having bridged the so-called "binary line" in higher education. It has under its wing the local polytechnic as well as the two universities, the University of Hong Kong (HKU) and the newer Chinese University of Hong Kong (CUHK). It operates on a triennial, originally quadrennial, system of block grants separately recommended to the government for each of the three institutions and so far approved without amendment on every occasion. This contrasts strongly with the British UGC experience where both the quinquennial system and the basing of UGC grant recommendations on submissions of forward development planning and financial needs put forward in detailed bids by each university were swept aside in the oil crisis of 1973-74. During the same crisis, the Hong Kong Government reacted, but much less violently, by dropping to a triennial planning cycle and by inviting the UPGC, which has its own vote, to reduce the administrative expenditure of one institution, whose management arrangements they did not greatly like, by a relatively small sum. It is significant that since neither the cut nor the efforts of the UGC and the authorities of the institution concerned seemed to be making the impact which was required to put things right, the Government itself, entirely typically, set up a well-briefed external Committee on the underlying organisational problem involved. This in due course provided them with the solution they, and indeed the U P G C and others, wanted but could not easily impose unilaterally. The Hong Kong Government is always ready to follow the advice of its U P G C when this supports as it usually does - the achievement of what the Government has already decided it wants to happen; and it has not normally worried about the cost. But it is quite ready to use other means to achieve its ends if the U P G C or the institutions falter. It commissions almost innumerable external and internal reports. Where however it has no preconceived view of its own and the issue is non-controversial, UPGC advice is readily accepted. Indeed it is the nature of the government which is the truly unique feature of Hong Kong; and the U P G C like many other local bodies is affected by it. Hong Kong is a British Crown Colony; remnant of an Empire which no longer exists. Its form of government is wholly in the colonial tradition but the guiding influences underlying its actions are more Chinese than British. It continues as a colony not because Britain willed it so but because this anachronistic status

547 suited both the Chinese population of Hong Kong - now over 5 million, including accepted refugees as compared with barely half a million after its liberation from the Japanese occupation in 1945 and the economic and political interests of China, which could move in and take over Hong Kong with impunity any time it wished. For the moment, however, in many of its activities Hong Kong is a virtual autocracy, governed by an all-powerful Governor appointed by the British Foreign and Commonwealth Office (FCO) as successor to the defunct Colonial Office. While defence and foreign policy issues in Hong Kong are of interest to the FCO, its interest in higher education in Hong Kong, so long as it is going reasonably well and Hong Kong is paying for it, is negligible: nor is that of any other UK Government department any greater. The Governor, always in recent years an official and not a politician, is required to submit his policies and more important proposals for action to nominated and not elected Legislative and Executive Councils composed of influential local tycoons, both Chinese and expatriate, and top officials of the Central Secretariat (similarly mixed in race) who with the Governor, Colonial and Financial Secretaries (also appointed by FCO in London) run the government machine. Their approval, after due debate, can usually be relied upon. Government departments, such as that of Education or of Health, tend to be executive only and noticeably subordinate to the responsible officers, including a Secretary for Education, in the Central Secretariat. The whole system is thus highly centralised, which suits bodies such as the UPGC with direct access to the centre, and relies heavily on remaining acutely sensitive to Chinese opinion at all levels, internally as well as externally in China itself. The result is a wholly undemocratic but exceptionally receptive managment system. It is relatively efficient and very hard working, like the Chinese themselves. By preference it is noninterventionist, especially in economic affairs, but can act swiftly if it deems it necessary. All this is entirely acceptable to the local community. With the ending of the lease on a large part of Hong Kong territory in 1997, future relations with China and the Chinese population are uncertain; but it is by no means impossible that some local institutions improvised by the British on home models, such as the Hong Kong UPGC, might remain. Both by their nature and their situation, Hong Kong Chinese at all levels have an insatiable appetite for education and no ceiling to their ambitions in this direction. They are also, which is rarer, prepared to work at it with enviable application. As their economic prosperity continues to improve but their political future remains cloudy, their desire to acquire an internationally marketable qualification increases, as does their pressure on the Hong Kong authorities to expand, virtually without limit, the opportunities they offer for high quality higher education. Of this the UPGC and the Hong Kong Government are intensely aware, but expansion proceeds in carefully planned stages. The Government in particular finds the prospect of graduate overproduction with

548 local graduate unemployment appalling. Hong Kong has no shortage of fully qualified ('A' level standard) applicants for all available places. Indeed well over 50,000 Hong Kong students are studying at post-secondary level in various overseas countries (often as family insurance policy). Hong Kong's economy is so essentially fragile that the Government has inevitably embarked upon irreversible commitments to publicly financed social services, including education, with caution. The UPGC too, as an essentially academic body, is cautious. It is always anxious not to risk impairing academic and staffing standards and associated accommodation, library and equipment standards by undue haste in expansion. By some international standards the rate of growth of full-time student places in UPGC institutions has not been particularly fast. From under 4,000 university places in 1965, when the U PGC was created, to 11,600 in 1984 ( 15,000 planned for 1988) together with some 7,000 full-time diploma and other subdegree places in the polytechnic is not a spectacular rate of growth; nor is the fact that the 198i percentage of the relevant age group with access to degree courses was still only 2.4 percent, with a 1990 target of 6 percent. Let us not however forget the more important problems that Hong Kong has had to face during this period in assimilating its vast influx of penniless refugees; in building its economic strength with no indigenous material resources; and in finding space for additional buildings within the severe limitations of the usable land at its disposal. The standards of Hong Kong degrees and diplomas have remained as high as any in the Commonwealth and the available offerings now include two excellent Medical Schools, a Dental School and associated Hospital as well as a Law Faculty and a whole range of professional and vocational courses to meet the needs of an intensely technological manufacturing industry and the commercial enterprises on which the astounding economic growth of Hong Kong over the last 25 years has depended. These represent achievements of which any UGC system and all associated with it can be proud. Perhaps even more important is that there is in Hong Kong today a solid higher education base on which future developments can be organised. In spite of the imminence of 1997 and the consequent political uncertainties, of which early signs are already apparent in the opening in 1983 of AngloChinese talks on Hong Kong's future, higher education planning is still being vigorously pursued by the UPGC and the Hong Kong Government on a long term basis. A second polytechnic is already in the process of being established with an ultimate capacity for 13,500 full-time equivalent (fte) students. The present polytechnic, now 12,000 fte strong, is being designed and funded to reach the same figure in 1988 (of whom some 25-30 percent will by then be on degree programmes). One private sector institution, the Hong Kong Baptist College, is currently

549 being taken into the publicly funded higher education system and the UPGC is deeply involved in working out with the College its precise future role within the planned total system and the costs involved. For the longer term, a site is to be reserved for a third university or other major institution of higher education in Hong Kong. UPGC Sub-Committees have been set up to deal with the second polytechnic and the Baptist College. The extent of the UPGC's responsibilities for higher education planning in Hong Kong is greater than in any other UGC system. It has indeed been in the forefront of its activities from the beginning although only formally added to its terms of reference in 1981-82. Otherwise its task is defined similarly to that of the UK UGC and others in covering both academic and financial matters and operating "in the light of the community's needs". The creation of a polytechnic, rather than a third university, in 1971, was a UGC recommendation. This no doubt accounts for the later government decision, against some stiff opposition, to invite the UGC to take it over and become the UPGC, with additional relevant overseas membership, instead of putting it, like the Hong Kong Technical College from which it developed, under the Education Department. The latter is however responsible for the new Technical Institutes in Hong Kong which have taken over from the polytechnic, which happily shed its lower level work and its ordinary level technician courses as soon as possible. The dependence of the UPGC on its secretariat is unusually heavy; and it is fortunate in the quality of the officers appointed by the Hong Kong Government to serve it. Apart from the infrequent appearances of the whole Committee in Hong Kong, the Secretary carries out all day-to-day contacts with the three institutions and with his fellow civil servants in the Central Secretariat. On matters of academic development he speaks with the voice of the U P G C if it has uttered on the subject. On all others, UPGC views, if any, are subject to his interpretation and presentation unless important enough to require clearance by correspondence or informally with the locally-based but extremely busy Chairman. In financial matters and methodology, he tends to guide the Committee almost totally, leaving the members the opportunity of adding a few million dollars here or removing a few thousand there and informing them of what the Government is or is not likely to accept. The Secretary, rather than the Committee or its Chairman, is the Accounting Officer for the UPGC vote. His effective power is thus considerable. This is perhaps enhanced by the tendency of overseas academic members to be more interested and more expert in giving academic advice based on their own experience and subject areas to their counterparts in Hong Kong; or, if they are or have been heads of comparable institutions, to ensure that although the institutions' bids may have to be trimmed back in the light of the prevailing methodology, they will not find themselves short of money during the triennium ahead. They insist that any new developments asked for by Government are separately funded in full by the Government outside the block

550 grant and usually earmarked for several triennia to prevent them being raided for other institutional needs regarded as more pressing by the institution itself. The Secretariat operates, without reference to the Committee, the student grant and loan schemes for the Government and is, in a real sense, its Department of Higher Education. The conscientious desire o n the part of the UPGC secretariat to keep Committee members fully informed of everything of any possible concern to them and of every possible factor bearing on the main decisions, whether on higher education planning or provision of financial resources, which will be coming before them, results in the constant movement of mountains of papers few of which can be either read, absorbed or fully appraised by members busy with their main preoccupations. The institutions are kept perpetually busy preparing submissions to the UPGC at the request of the secretariat, particularly on their academic activities and intentions, their financial situation and on their capital building programme (which is, as in the UK, not on a block grants basis but subject to individual building approvals of a detailed character). In the year before the start of each triennium, each institution is required to submit to the U P G C their detailed proposals for the next triennium covering all departments and all levels and modes of study. These form the basis of discussion with U P G C members collectively by the faculties and central authorities of the institution at the triennial visitation exercise in Hong Kong and are followed by the presentation to U P G C of formal triennial estimates based on the outcome of the discussions. Cost figures appear for the first time in these estimates. Members then reassemble to consider the grants they are, largely on the advice of the Secretariat, prepared to recommend to the Government. In 1982-83 the total grant to the three institutions exceeded HK$ 1000 million (approx. 11 HK$ = s sterling) for recurrent and capital expenditure. This represents some 4 percent of total public expenditure. In spite of the size of the sum involved, the U P G C does not or did not until recently make any attempt in its triennial submissions to indicate to the Government how they arrived at the total sums which it recommends for each institution, only how much less it is than the sum asked for and what broad developments and rates of expansion of numbers have been provided for. It is typical of Hong Kong's recent fiscal position of almost invariable budgetary surpluses that they should be more interested in knowing the sums proposed for each institution than the total, which they have so far accepted without demur. As the instance mentioned earlier indicates, any warning signs of falling revenue and vanishing surpluses could lead the Hong Kong Government to cut back on authorised grants without hesitation. The system has however got so used, over the years, to a fairly lavish standard of public financial support that the task of reducing unit costs or overall expenditure will be traumatic; and it is difficult to see, on past experience, the U P G C being able or willing to take the lead in saying what could be cut back.

551 Like all UGC systems it works better in forward gear then in reverse; indeed it has yet to be demonstrated that the Hong Kong UPGC system has a reverse gear. The methodological problems involved, for any UGC system, in converting the planned growth over a period of time of student numbers with a given mix of levels of work and subjects of study, into precise aggregate financial needs for public subventions, are complex. For its two universities the Hong Kong UGC from the outset adopted the British UGC methodology based on UGC-determined unit costs and numerical distribution of full-time degree course students among the various subject groups. It still does so, although in Britain the abandonment in 1973-74 of quinquennial estimates from the universities and the pre-determination by the Government of the aggregate university grant year by year rendered the methodology pointless. In Hong Kong it can at least be said that the U PGC's own assessment of each university's financial needs for the next triennium is looked at against the university's own detailed bids and academic proposals before the final allocations are determined. When the UPGC and its Secretariat came to try to integrate the Hong Kong Polytechnic into its triennial grant determination system, it came up against the real difficulty that the students were not, and should not become, predominantly full-time and degree level. The adaptation of the universities' methodology to the polytechnic proved to be beyond their capabilities and there was no overseas experience to guide them. They had to depend almost entirely on the inevitably well-padded estimates of the polytechnic itself. Few UPGC members were greatly worried about this as they knew from experience that their methodology was never questioned and their recommendations were always accepted. The result was, however, that from the outset polytechnic grants - like those earmarked for of the CUHK Medical School, the HKU Dental School and Hospital, to which similar methodological difficulties applied were noticeably more generous than those for HKU and CUHK bearing in mind the far smaller research expectations and very much lower level of scholarship involved and qualifications offered. No attempt was made by the UPGC to monitor the planned mix between full-time, part-time and evening students (not because of any shortage of statistics), all of which counted towards the polytechnic's fulltime equivalent totals. In the universities, following UK practice, virtually no account was taken of extra-mural students (HKU runs some 800 courses catering for 22,000 students, mostly vocational, and C U H K similarly) who are expected to be virtually self-financing. Its relative affluence has meant that the polytechnic has been able, far more than the universities, to follow its own developmental inclinations, and while grateful for U PGC support in these when it is forthcoming, is able to manage quite well without it. It provides much less part-time, evening and lower level work than was originally intended while its full-time and now degree courses have been given top priority - a pattern not obviously reflecting the needs of the community.

552 Taken as a whole however, the U P G C , the Government and the three institutions have served each other and the needs of the Hong Kong community well. The present higher education system is well capable of further development in any desired direction if the resources continue to be available. Its main handicap is not the political uncertainties ahead but the high cost nature of the institutions, which may be difficult to sustain in the longer term. It would help if the U P G C or the Government were to set in train a fundamental reexamination of the financial processes by which desired developments are related to the consequential sums which Hong Kong taxpayers are asked to provide. A rather tougher approach will almost certainly be needed as the number of institutions to be dealt with grows. The time has come when the establishment of a set of quantitative indicators of progress might well be desirable. These might cover the regular presentation of staff/student ratios, the student mix, by level and mode of instruction, and unit costs in the main areas of activity. All these need to be watched and any apparent aberrations over time investigated. On the other hand, rather less academic guidance from U P G C members in particular subject areas and less detailed control of capital and equipment grants, perhaps moving to a modified block grant system, could usefully reduce the Committee's work load. The situation to be avoided, if and when public money ceases to be so readily available, is that one or other institution will come to the conclusion that a measure of direct lobbying of Government might serve them better than the U P G C system. The introduction at this stage of a few selected local academic members on to the main Committee would probably help (which it would not have done in earlier days) to retain that degree of local confidence in the system without which the U G C idea cannot long survive.