Expeditiously conducting a comprehensive review of the Government's service outsourcing system（2017/02/08）

Deputy President, the Government's service outsourcing system is one of the methods of public service delivery adopted by government departments. It offers the advantages of making full use of the experience and expertise of private organizations to minimize the recurrent financial burden of the Government in the most cost-effective way. In the past, there was the view that outsourcing services can counteract the notion of "iron rice bowls" in some government departments. At present, it is estimated that the Government has employed 50 000-odd outsourced workers and the majority of them are employed under the Food and Environmental Hygiene Department, the Government Property Agency, the Housing Department and the Leisure and Cultural Services Department. It is estimated that if the Government employs the aforementioned employees on civil service agreement terms, the cost of wages will drastically increase by over 30%. However, an increase in cost does not necessarily result in enhancement in the standard of service. Optimizing the use of social resources through the outsourcing system is a feasible method. 

The current problem lies in the fact that the Government is not only the party which has entrusted the provision of public services to contractors but also the institution of policymaking and the overseer which assesses their effectiveness. If the Government fails to effectively monitor the operation of outsourced service contractors and the remuneration of their employees, grass-roots workers who do not have any bargaining power will be subject to unreasonable exploitation and become resentful. As a result, the quality of municipal services provided by them will become unstable, especially the services which the public encounter on a daily basis, such as the cleansing of streets and the management of housing estates. The public certainly do not accept services of an unstable quality while the Government, which has entrusted the provision of services to contractors, has a responsibility that cannot be shirked. If this problem remains unresolved, it will definitely affect the Government's prestige in governance.

Deputy President, some Members consider that it is inappropriate of the Government to invite tenders according to the "lowest bid wins" principle which gives rise to the problem of outsourced service contractors providing inferior services at lower prices and creating negative consequences. Yet, I think we should first resolve the problem concerning the philosophy of supervision of the Government. When assessing the quality of contractors, the Government places greater emphasis on their hardware facilities for services provision and ancillary software but it seems that there is still some room for improvement in certain areas, such as examining whether the contractors have provided reasonable remuneration according to the existing labour legislation or whether they have exploited their employees' rights and benefits (such as setting unreasonable terms of employment and evasion of making severance payment). According to the statistics of the Labour Department, from 2013 to October 2016, there were two convicted summonses on violation of requirements under the Employment Ordinance against the outsourced service contractors of the Government. On the surface, it seems that two cases are not a huge amount but come to think about this. With the support of such a large-scale outsourcing business of the Government and under the supervision of a dedicated system, there are still people who disregarded employees' rights and benefits in violation of the law. We cannot say that this is not a serious situation, and we should not take it lightly.

I think the Government can consider increasing the relevant penalties if necessary so as to achieve a deterrent effect. Apart from increasing the penalties, the Government should also improve the existing working guidelines, step up inspections and carry out objective assessments of contractors regularly, strictly enforce the demerit point system for outsourced services and impose severe punishments on contractors in breach of labour legislation or safety requirements, rather than handling and following up cases after complaints are received. In terms of supervision, the Government can also consider inviting the participation of members of local communities, including the District Councils and Area Committees. Their participation can monitor the effectiveness of outsourced services in a more objective manner. 

With regard to the approach of inviting tenders, the Government should also study the possibility of further tightening the demerit point system and improving the Standard Employment Contract to strive to eradicate exploitation of employees' rights and benefits by contractors so as to protect grass-roots workers. The Government can also consider giving priority to social enterprises which are non-governmental organizations when awarding certain outsourced service contracts. Such an approach will not only support social enterprises but also introduce competition. It can explore the possibility of creating a trend of outsourcing services to social enterprises and create new directions for outsourcing of services. 

To encourage contractors to treat their employees well, the Government can consider introducing a "Meritorious Service Award Scheme" to directly award certificates and financial rewards to contractors and frontline staff with outstanding performance so as to recognize the effectiveness of their work. Meanwhile, the Labour Department can consider establishing a hotline for the frontline staff of outsourced service contractors to make enquiries and lodge complaints. In terms of enhancing transparency, the Government can carry out researches again through the Efficiency Unit to collect more information which provides data for assessment of the relevant outsourced service contracts in future. The data should also be uploaded onto the websites of the relevant government departments for public inspection. 

Deputy President, the service outsourcing system has been proven in capitalist societies and it should not be discredited completely. If we describe it as the culprit causing the disparity between the rich and the poor, I believe no one will agree with such a claim. We can correct and review the problems caused by the service outsourcing system, and the results thus obtained can be used for choosing suitable contractors and projects. I have reservations about the approach of replacing the existing outsourcing arrangements with employment on civil service agreement terms across the board because so doing will only increase the financial burden of the Government without enhancing efficiency and the quality of services. 

I understand that the motion proposed by Mr LUK Chung-hung is helpful in responding to people's demands and reminding the Government of the need to protect the well-being of outsourced employees and tighten the regulation of contractors, thereby enhancing the service quality overall. Yet, I have reservations about certain parts of the original motion and therefore I will abstain on it.

Deputy President, I so submit.