English Schools Foundation - Government Subsidy Debate

Government Subsidy Debate

Unlike most other international schools in Hong Kong, schools run by the ESF receive an ongoing subsidy (called a 'subvention') from the Hong Kong Government. The reason for this is historical and lies in the foundation's statutory basis. Until recently, it was generally accepted that this subsidy was fair and that the foundation had a reason to be subsidised.

There has been some controversy regarding subsidies to the foundation. The fiscal deficit suffered by the Hong Kong Government following the Asian Financial Crisis forced the government to cut costs. There were also allegations that the foundation has misused funds on entertainment and over-extravagant recruitment procedures. A report criticising the ESF's use of funds was published by the Hong Kong Government in November 2004, resulting in a continuing debate about whether the subsidy should be cut or even suspended. The subvention was cut for several years in line with a general reduction in government expenditure and then frozen.

Those in favour of keeping the subsidy argue that:

1. Students of ESF schools should be allowed the same subsidy that is provided to students of schools in "local" schools. Without the subsidy, some parents could not afford the higher fees and their children would be forced to leave the ESF system.
2. English is an official language of the HKSAR and there is only limited provision for English language education outside the ESF.
3. The style of education is different from what is available in "local" schools. Although the government also has the Direct Subsidy Scheme (DSS) to provide funding to schools which operate more independently than typical local schools, most DSS schools were formerly top-tier local schools and continue to offer the local curriculum.
4. ESF schools provide better quality education than some other international schools in Hong Kong.
5. ESF already does not have enough money for lots of other educational equipment. Cutting off subventions would make it even harder for ESF to maintain its status as a good quality international school foundation.

Those who argue for the subsidy to be reduced further or stopped put forward several arguments:

1. Other international schools are not subsidised, so it is not fair that the ESF should be subsidised.
2. The subvention allows the ESF to charge lower fees and pay higher salaries to teachers than other international schools. This creates unfair competition.
3. Most students in ESF schools could attend other schools and so do not need a government subsidy.
4. The ESF has been criticised for its governance and extravagance, which has caused many to question whether the public's money is being used correctly.

The ESF has recently addressed concerns about governance by putting forward a new Ordinance that will change the way the organisation operates.

It is generally accepted that the government will not allow the ESF to expand any further under the existing subsidy arrangements. Future ESF schools will have to be under the "Private Independent School" scheme with no "subvention". One (Renaissance College) opened in Ma On Shan in August 2006 and Discovery College in Discovery Bay, which opened in August 2007.