Newsletter Special Issue (2005)

OpenLetter toStaffMembers of the University Dear colleagues: 2004 was a difficult year for us all. UGC funding cuts necessitated by the government's huge fiscal deficit weighed heavily on both teaching and non-teaching units. We have experienced the austere challenges of cost saving, salary reduction, and increased workload. At the start of 2005, let me first thank you for weathering the tough times with the University. Without your understanding and support, cost-saving measures and academic restructuring could not have been implemented successfully. We owe it to you that the University has come out of the slimming exercise largely intact and eager to seek greater progress in the year ahead. The University administration is grateful to you for putting our collective interest before your own. What is gratifying is that, with the launch of cost-saving measures last April, the core objective of avoiding lay-offs and retaining as many posts as possible has been achieved. Although certain posts now exist in reduced terms, 99 per cent of over 1,000 non-teaching contracts offered for renewal have so far been accepted. This is sufficient proof of the great sense of trust in and belonging to the University among our staff force. Such solidarity is the University's most precious asset. You must have known that following the substantial funding cut in 2004/5, UGC allocation to the local universities for the 2005/8 triennium will be based on a 0-0-5 formula. The UGC has recommended, pending approval by the Finance Committee of the Legislative Council, that HK$6.36 billion be allocated to CUHK for the next three years. This represents a significant reduction from the 1995/8 allocation figure. By 2007/8 , the amount of subvention received will be 25 per cent less than that of 1997/8 (excluding reductions made in line with civil service pay cuts). To allay anxiety about the future, let me take this opportunity to explain the University's stance and give an assessment of what we shall be facing in the next three years. The figure of HK$6.36 billion is cast on the premise that funding levels for 2005/6 and 2006/7 should largely be the same as that for 2004/5, to be followed by a 5 per cent cut in 2007/8. The government has also promised a review in mid-2006, with a possibility of reducing or eliminating the 5 per cent cut. We have strongly urged the government to adopt a 0-0-0 formula, and to consider an increase in its subvention allocation to the universities in 2007/8 should the economy continue to improve. We believe this is necessary for maintaining the quality of higher education in Hong Kong. I must also point out that even with no cut introduced in the entire 2005/8 triennium, actual annual allocations over the next three years will be less than that for 2004/5. This is mainly due to the gradual withdrawal of public funding for most taught master's programmes, which according to UGC policy should henceforth be self-financing. As the government withdraws financial support to the tune of HK$100 million from these programmes in three years, the reduction in the quota for medical students will mean that we shall receive another HK$36 million less. By 2007/8 therefore, actual UGC allocation will be 2 per cent lower than that for 2004/5, and 7 per cent lower i f the 0-0-5 formula is adopted. You may have noticed that the University is stepping up its fund-raising efforts for a host of research and development projects, hoping to secure as much financial support as possible from private sources. We need to recognize however that most donations and grants are one-off in nature and usually designated for specific purposes. They can in no way be relied upon to sustain the University's regular operation. Having said that, the University administration will do its utmost to manage any budgetary shortfall within this broad framework over the next triennium. We shall also press for the adoption of the 0-0-0 formula. Provided that the 5 per cent reduction planned for 2007/8 is cancelled, there should be no need to introduce additional cost-saving measures. What has already been approved will however continue to be implemented. What we most hope to see, of course, is that Hong Kong's economy will continue to improve, affording the government the ability to increase its subvention for higher education in 2007/8. Dear colleagues, let us continue to arm ourselves with optimism and team spirit. Let us continue to advance and excel in the face of adversity, and build another glorious decade for The Chinese University. I wish you all a happy and prosperous 2005. Lawrence J. Lau Vice-Chancellor 19 January 2005