Lecture 3 - Social Welfare Reform in Hong Kong PDF

SS1011 Social Welfare Services & Issues Lecture 3 – Social Welfare Reform in Hong Kong  Welfare Reform in Hong Kong It was introduced by SWD in 2000-01 to discount Gov’t expenditure in social security & subvention to NGOs Most social welfare services are operated by NGOs with heavy fina...

SS1011 Social Welfare Services & Issues Lecture 3 – Social Welfare Reform in Hong Kong  Welfare Reform in Hong Kong It was introduced by SWD in 2000-01 to discount Gov’t expenditure in social security & subvention to NGOs Most social welfare services are operated by NGOs with heavy financial support from the Gov’t at that time. Roles of the Gov’t Roles of NGOs ⚫ Formulate policy, ⚫ Formulate service service standards and policy & standards operational ⚫ Operate the welfare requirements programmes ⚫ Provide financial ⚫ Manage the services resources by subvention to meet the output ⚫ Monitor service standards performance  Welfare Reform in Hong Kong Relationship of SWD & NGOs before the mid 1990s ⚫ SWD laid down input standards for services ⚫ Cost of new service was calculated by a standard cost ⚫ Allocation of subvention was determined by track record & proposal on service content – NOT by cost proposal ⚫ Full reimbursement – an input control approach – a repayment system based on actual costs ⚫ Security of funds for NGOs ⚫ No explicit output standards – Poor performance? ⚫ Partnership between NGOs & the Government  Welfare Reform in Hong Kong Reform measures since the Mid 1990s ⚫ In 1995, SWD initiated a review to examine the way in which NGOs are funded & their performance monitored ⚫ The review provided a framework for the management of the delivery of social welfare services in Hong Kong. Weaknesses of the original subvention system Subvention from government: sole source of funding →dependency from NGOs →many types of management, some chaotic or poor in managing, not much incentive to improve Excessive bureaucracy and complexity in administration Inflexibility and restrictive rules Insufficient emphasis on performance and accountability Lack of incentives and sanctions Endless argument about amount to be claimed (Coopers and Lybrand 1995)  Transition into Lump Sum Grant mode of subvention 1987: Working group on welfare subvention: Standard cost 1995-7: Review of social welfare subvention: Fixed funding grant 1998: Competitive bidding 1999: Service Performance Monitoring System (SPMS) 1999- 2002: Enhanced Productivity Program (EPP) 2001: Lump Sum Grant Subvention system (LSG) 2003: Enhanced SPMS 2003: Efficiency Saving 2008: Lump Sum Grant Independent Review Committee 2011: Best practice Manual – Consultancy study  Welfare Reform in Hong Kong Change from an input staffing standard control subvention mechanism to an output control subvention system. The changes include: Service Performance Monitoring System (SPMS) ⚫ 16 Service Quality Standards (SQS) ⚫ Funding and Service Agreement (FSA) Competitive bidding (for new services) Lump Sum Grant (LSG) Service Performance Monitoring System (SPMS) Subvention allocated based on: ⚫ Performance of service units. ⚫ Funding & Service Agreement (FSA) ⚫ 16 Service Quality Standards (SQS) ⚫ Performance audit (internal & external) New Subvention System started in April 1999 = ⚫ LSG + SPMS (FSA + SQS) Output control mechanisms are devised (FSA) to ensure the service cost-effectiveness of NGOs. Service plan by NGOs (3 to 5-year medium term planning cycle) + an annual service plan by service units to its target service population, e.g. non-engaged youths. 8  Welfare Reform in Hong Kong Service Performance Monitoring System (SPMS) ⚫ 16 Service Quality Standards (SQS) ⚫ Funding and Service Agreement (FSA) ⚫ Implemented in phases since 2000 Implications ⚫ Subject to a system of performance measurement by quantifiable outputs ⚫ Contractual relationship vs partnership ⚫ Management responsibility is to achieve accountability for the use of public funds ⚫ Sanction will be imposed  Welfare Reform in Hong Kong Competitive bidding ⚫ The bidders are to propose financial forecast for the service open for bidding ⚫ Competitive bidding for Home Care and Meal services since 2000 Implications ⚫ Open up possibility of participation by the private sector in the provision of welfare services ⚫ Small agencies with less resources may lose out in a system of competitive bidding ⚫ Competition reduces exchanges beneficial to the development of services ⚫ Continuity of service vs market competition Funding and Service Agreement (FSA) Agreement between SWD and service unit ⚫ Contractual relationship ⚫ SWD as funder/purchaser, NGO as service provider ⚫ Funder /provider split: objective assessment Two parts ⚫ The generic section common to all FSA ⚫ Service-specific section varies from service to service Standardized measurable performance standard and indicators ⚫ Output, outcome standards ⚫ Essential service requirements  Examples of FSA: Children & Youth Centers Performance Standards under FSA: ⚫ Total no. of new & renewed members in the year ending March 31st = 1,000 ⚫ Total no. of core program sessions within 1 year = 700 ⚫ Total attendance at the core program sessions within 1 year = 9,660 ⚫ Rate of achieving core program plans conducted with goals achieved in a year = 85%  Another example of FSA: Day Care Centres for the Elderly Service Output Performance Standards: 1. Average enrolment within 1 year = 42 members (i.e. 105% of capacity); 2. Average daily attendance = 36 members (i.e. 90% of capacity) 3. Rate of formulation of individual care plan = 90% of the members within 1 month & the rest within 3 months after admission 4. Rate of individual care plans reviewed within 1 year = 90% 13  Service Quality Standards 16 standards in total, emphasis on whether certain processes are in place Four alleged principles: ⚫ Principle 1: provision of information - clearly define purposes and objectives of service, more transparency for the public. ⚫ Principle 2: service management - manage resources effectively with innovation and quality improvement. ⚫ Principle 3: service to users - encourage NGO to identify and respond to specific service users’ needs, include the changing needs. ⚫ Principle 4: respect for service users’ rights - to see own records, to voice complaints, to evaluate service.  Assessment and Follow-up Mechanism of inspection, monitoring and auditing ⚫ Self assessment reports ⚫ Review visits and on-site assessment by SWD ⚫ Interviews with staff and service users Correction of deviations ⚫ Action plan of service operator ⚫ Taking more vigorous monitoring measures by SWD ⚫ Withdrawal of subvention  Welfare Reform in Hong Kong Lump Sum Grant (LSG) Personal Emoluments (PE)(Staffing costs): SWD will determine the benchmark lump-sum grant of each NGO on the basis of Mid-point salaries of the existing pay scales of its recognized staffing establishments as at 1.4.2000 The present sector-wide average Provident Fund (PF) employer’s contribution of 6.8%  Calculations of LSG Using mid-point as salary calculation Degree holder -its salary scale lasts from point 16 to 33 (HKD$31,685 to HKD$70,090) Mid-point is 24 – that is around $50,000 If one centre needs 3 degree holders, then salary subvention will be ($50,000 x 12 months x 3 persons) x 1.05 MPF A lump sum amount of programme fees is offered. For those NGOs, they need to keep a balanced budget, so that expenditure control will be tight. Strategies include: (1) keep the highest salary of a social worker at the mid point, (2) use contract / project staff, and (3) appoint young and junior staff. Lump Sum Grant in Hong Kong https://www.youtube.com/watch?time_c ontinue=45&v=gYtEuCW38os  Alleged Merits of the LSG system 1. Streamline procedures to achieve greater efficiency & effectiveness: output based instead of input based 2. Improve service quality & performance: SPMS and FSA to be agreed upon and implemented 3. Encouraging innovation in service delivery: competitive bidding for new services 4. Enhancing accountability: Performance monitoring system on regular basis 5. Providing flexibility in the deployment of resources to meet evolving priorities & changing community needs: opening up of additional funding sources (tripartite structure)  Drawbacks of LSG system Deterioration of service quality; Loss of experienced long-service staff Salary of social workers delink from salary scale of civil servants - fewer incremental points Same grade, different salary – internal conflicts Conflicts between senior management and front-line workers Low morale of social workers More turnover rate of social workers Unreasonable fee charging on clients Insufficient support for central administration (some non-subvented posts)  New Management Approach to Social Services Market like mechanism in place, e.g. competition to achieve best value for money Objective assessment for service quality based on established standards and agreement Accountable to and assessed by stakeholders (including clients) based on evidence Managers are allowed flexibility to provide customer service under changing situation and needs.  Report of the Lump Sum Grant Independent Review Committee: Executive Summary (2008) 1. The Lump sum grant (LSG) has its merits but also needs improvement. 2. A Best Practice Manual for NGOs on areas such as human resource policies, level of reserves and their gainful deployment, corporate governance should be developed. 3. The additional funding provided in line with civil service salary adjustments should be spent solely on staff in subvented services by NGOs;  Report of the Lump Sum Grant Independent Review Committee: Executive Summary (2008) 4. NGOs need to factor in pay adjustments in budgeting for non-subvented services; 5. The Government should set up a $1 billion Social Welfare Development fund to support training, capacity enhancement initiatives and service delivery enhancement studies. 6. SWD should set up a help desk to provide management advice to small NGOs…. (more recommendations in this Website: www.lsgir.hk)