23 October 1998

Sir Sidney Gordon, JP
Chairman
Standing Commission on Civil Service
    Salaries and Conditions of Service
Room 701, 7^th Floor
Tower Two, Lippo Centre
89 Queensway
Hong Kong

Review of Civil Service Starting Salaries

        I am writing to invite the Standing Commission to carry out a review of starting salaries in the civil service. The proposed terms of reference for this review are attached.

        We are most grateful for the advice and recommendations given by the Commission following the last overall review conducted in 1989. We remain of the view that the civil service pay policy objective set out in the Commission's report no. 23 remains appropriate. Civil service pay should be sufficient to attract, retain and motivate staff of a suitable calibre to provide the public with an effective and efficient service. Such remuneration should be regarded as fair both by civil servants and by the public which they serve.

        Central to our policy is that civil service pay should be broadly comparable to that of the private sector. We need to ensure that this remains the case. However economic and social developments as well as changes in education standards since the last overall review in 1989 might have changed the relativity between civil service pay and private sector pay. With the lapse of 10 years, we consider it appropriate now to conduct another review.

        We have considered whether a review should take the form of an overall review, similar to that in 1989, or a review of starting salaries only. We recognise the difficulties in comparing salaries beyond starting level and the greater difficulty inherent in, and longer time required for, an overall review of all grades and ranks. We have therefore concluded that it is appropriate at this time to focus on a review of starting salaries. We shall consider the need for further reviews in the light of the findings of the review on starting salaries.

        In the last two overall reviews conducted by the Commission, an education qualification method was used to compare jobs in the civil service and in the private sector. We note the merits and general acceptability of this method and feel this would be an appropriate method to use again. That said, we would not rule out other methods if the Commission considers them to be more appropriate on this occasion.

        We would appreciate if the findings could be made available to us by May 1999. We hope to be able to have your recommendations on how to take these forward by about mid-1999.

        I understand that your initial thinking is to set up a Steering Committee to oversee the review. We support this approach as an effective means to ensure the review is taken forward in a balanced and efficient manner.

        In view of the implications of the review on the disciplined services, we feel it would be appropriate for a member of the Standing Committee on Disciplined Services Salaries and Conditions of Service to be involved in this exercise. The Standing Committee have indicated that they are prepared to nominate a member or members to represent them. I would like to thank you for agreeing to have a member of the Standing Committee attached to your Steering Committee.

        A press release to announce the review is enclosed for your information. This will be issued next week.

        This review is an important exercise one which will unavoidably result in Commission members having to devote a considerable amount of their time and effort to ensure a successful completion. I would like to assure you that the Government will render all necessary assistance to facilitate the review.

(W K Lam) Secretary for the Civil Service

c.c. SG, Standing Commission

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