Hong Kong public schools face ‘alarming' 10% cut in grant amid city's budget deficit

South China Morning Post

22-05-2025

Hong Kong's public primary and secondary schools will experience a 10 per cent reduction in government funding for the upcoming academic year. Some industry stakeholders have described these cuts as alarming.
Apart from cuts to the Expanded Operating Expenses Block Grant, schools under the direct subsidy scheme (DSS), which are regarded as semi-private in Hong Kong, would also face a 2 per cent funding reduction under the government's proposal.
Education Bureau officials met school sector representatives on Tuesday to announce proposed cuts to its expenditure, saying the total reduction would amount to 7 per cent from 2024-25 to 2027-28.
The distribution of cuts would be 1 per cent in 2024-25 and 2 per cent in each of the following three school years.
The bureau earlier told the legislature it had already reduced its recurrent expenditure by 1 per cent internally in 2024-25 without slashing funding for the school sector, but would share the 2 per cent annual cuts in subsequent years with the industry.
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Cuts to major source of government funding for public schools
Lee Yi-ying, chairwoman of the Subsidised Secondary Schools Council and a secondary school principal, who attended the bureau's briefing, said there would be a major cut of 10 per cent to the Expanded Operating Expenses Block Grant – one of the largest sources of public funding for the city's public schools.
She said the figure was 'alarming' and 'of course will affect schools', adding the education sector understood the government was now dealing with a financial deficit.
The block grant for a secondary school with 24 classes is currently around HK$8 million (US$1.02 million), and the proposed cut means each school will receive around HK$800,000 less in the coming school year.
The block grant covers 30 school expense items, including subsidies for boosting English and Mandarin, hiring clerical staff, furniture and equipment, air-conditioning, lift maintenance, speech therapy, educational psychology and curriculum development.
The bureau allows schools to use subsidies and surpluses under each item of the block grant flexibly.
The government said it would not adjust subsidies under the grant based on the composite consumer price index, even though they were increased slightly due to annual inflation levels in the past.
Lee Yi-ying, head of the Subsidised Secondary School Council, says the cuts to the Expanded Operating Expenses Block Grant are 'alarming' and will significantly affect public institutions. Photo: Yik Yeung-man
Changes to other grants
Lee said the government would also combine the Life-wide Learning Grant, a subsidy for schools to launch different activities to broaden students' horizons, and the Grant for the Sister School Scheme, a subsidy for schools to pair up and conduct exchanges with mainland Chinese institutions.
Both grants would be based on the number of students enrolled in a school, rather than the number of classes it operates.
'If the school has sufficient students, the amount of money the school receives will not have a big difference from the past,' she said.
Starting from the coming academic year, the government will also increase the threshold for the Grant for Supporting Non-Chinese Speaking Students with Special Educational Needs, requiring schools to admit at least six students with such needs to obtain the basic grant of around HK$106,000.
'If schools only admit one to five non-Chinese students with special education needs, they will no longer receive funding and have to use their own teachers or assistants and social workers to support them instead,' Lee said.
Under the bureau's proposal, schools under the DSS would face a 2 per cent cut in their lump sum grant from the government.
Lee said it was still unknown how the funding cut in public schools would be implemented in 2026-27 and 2027-28.
She suggested that schools would have to think of ways to expand their sources of income, such as renting out campus facilities to different organisations during non-school hours, raising donations from alumni and parents, or applying for other grants from the government.
Potential changes in threshold for public funds
According to another source, education authorities said in the briefing that they were also considering allowing schools that currently operate four Form One classes – a number generally favoured by parents – to apply to operate five classes in the future.
Lawmaker Chu Kwok-keung, who represents the education sector, said he opposed such an idea, as it would create unhealthy competition for students and cause academically weaker schools to be placed under greater pressure and survival risks.
Lee added that bureau officials would review the threshold requirement for operating a class in secondary schools, with the headcount exercise conducted in Form One and Four every September serving as a benchmark for the government to allocate resources.
Authorities were now considering to extend the headcount exercise to other grades including Form Five or even Form Six, in which schools had lost students for different reasons, she said.
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Government funding for secondary schools is based on the number of classes each operates, meaning the more classes a school has, the more resources it may obtain.
Under current rules, schools with 26 and 51 students are given resources to operate two and three classes, respectively.
Schools with only one Form One class have to submit a plan for survival.
A secondary school principal who spoke on condition of anonymity said some schools, particularly elite and academically weaker institutions, could face funding cuts due to reduced student numbers in Forms Five and Six.
Elite schools had students who may leave for overseas studies or switch to other local schools for their international curriculum, while academically weaker schools had higher drop-out rates, resulting in lower student numbers. Both cases affected the eligibility of those institutions for funding, the principal said.
'There will be a situation that the popular schools will be proactive in admitting in-year admissions in Form Five and Six, which they seldom do now,' the school head said.