A. Introduction. A core business of the Housing Authority (HA) is to provide rental housing. This involves the management and maintenance of 167 public rental housing (PRH) estates, comprising 1,215 blocks, accommodating 2.3 million people. The Housing Department (HD), the executive arm of the HA, provides management services in PRH estates. As at 1 October 1998, the HD had a total establishment of 8,531 staff for these services.

B. In the 1998-99 revised budget for rental housing business, the estimated expenditure is $11,432 million. As the estimated income is only $9,181 million, the operating deficit will amount to $2,251 million. A recent audit review has revealed that there are certain areas in the operations of management services of the HD where improvements could be made and substantial financial benefits up to $465.9 million a year could be achieved (para. 113). This would substantially reduce the estimated operating deficits for the next few years. These areas for improvement are summarised in paragraphs C to G below.

C. Refurbishment of vacant flats. The HD on average took 144 days to refurbish vacant flats while the target was 57 days. The average time of 144 days was too long, having regard to the small size of the flats and the standard nature of the works. By meeting the time target, the HD could increase the rental income by $34.4 million a year. The families on the waiting list will also benefit from a reduced waiting time for allocation of a PRH flat (paras. 6 to 26).

D. Hawker control. The HD spends $161 million a year for hawker control. The cost-effectiveness of hawker control operations needs to be reviewed, having regard to the fact that illegal hawking activities in PRH estates are not as serious as before (71 estates or 43% were found to have no hawkers). By critically reviewing the staffing level for hawker control, a total annual saving of $59.5 million on staff cost could be achieved (paras. 33 to 53).

E. Under-utilisation of estate Artisans. The productive time of the 716 estate Artisans was only about 43%. By reviewing the staffing requirement of estate Artisans to reduce surplus staff, an annual staff cost of $73 million could be saved (paras. 56 to 69).

F. Deployment of Estate Assistants. By reviewing the staffing requirement of Estate Assistants to avoid duplication of work with Tower Guards/Tower Guard Supervisors, a substantial proportion of the $141 million a year for hiring Tower Guards/Tower Guard Supervisors could be saved. Moreover, by making better use of the service of Tower Guard Supervisors who could provide the same service of Estate Assistants at a lower cost, a further saving of $53 million a year could be achieved (paras. 72 to 82).

G. Staffing complement for estate management. In December 1997, the Government announced a Tenants Purchase Scheme whereby PRH flats in selected estates would be sold to tenants. Subsequently, the HD introduced a thin and lean staffing complement for the management of these estates. If the new staffing complement for estates of the Tenants Purchase Scheme could be applied to all PRH estates, there would be a staff reduction of 28%, or 23% in terms of staff cost. The potential staff cost savings would amount to $372 million a year (this amount subsumes the staff cost savings for estate Artisans and Estate Assistants mentioned in paragraphs E and F above). Audit considers that adopting the new staffing complement could address the problem of idle and unproductive time of staff identified by Audit in the management of PRH estates (paras. 97 to 110).

H. Audit recommendations. Audit has made the following main recommendations that the Director of Housing should:

(a) take prompt and effective action to reduce the time required for refurbishing vacant flats (para. 30);

(b) critically re-examine the problem of illegal hawking, and consider reducing the number of hawker control teams and Hawker Control Guards in the estates where no hawkers were found (para. 48);

(c) consider reducing the number of Workmen II in a hawker control team, and consider employing fewer Hawker Control Guards (para. 51);

(d) urgently address the problem of idle time and review the staffing requirement of the estate Artisans so as to ensure that they are fully utilised (para. 70);

(e) ascertain the extent of duplication of work of Estate Assistants and Tower Guards/Tower Guard Supervisors, and consider reducing the number of Estate Assistants in view of the fact that some of their duties are also performed by Tower Guards/Tower Guard Supervisors (para. 79);

(f) formulate a strategy and draw up an action plan for employing more Tower Guard Supervisors to replace Estate Assistants so as to reduce the operating costs (para. 83); and

(g) consider applying a new staffing complement to all PRH estates and devise a strategy to redeploy the surplus staff (para. 111).

I. Response from the Director of Housing. The Director of Housing has said that he is in general agreement with the audit findings. The HD has already taken positive measures to improve the situation. Good progress has been made in both cutting costs and enhancing staff productivity in certain areas (para. 115).

J. Response from the Chairman, HA. The Chairman, HA has said that, in general, she agrees with the audit findings. The audit recommendations will be carefully considered by the HA and will be put into implementation wherever practicable (para. 116).