25 October 2016
Small kindergarten operators in Hong Kong are worried that they could be driven out of the market in the long run. Photo: HKEJ
Small kindergarten operators in Hong Kong are worried that they could be driven out of the market in the long run. Photo: HKEJ

Drawbacks in the free pre-school education program

During his election campaign in 2012, Chief Executive Leung Chun-ying promised that he would press ahead with free kindergarten education and that he will make it a permanent program.

After four years into his term of office, Leung finally delivered on that promise as he announced in his Policy Address in January this year that the Education Bureau will implement free kindergarten education in the city starting from the 2017/18 school year.

I am delighted that the chief executive has fulfilled a key pledge. However, I want to point out some fundamental flaws in the government’s proposal, flaws that have already raised considerable concerns among many kindergarten operators.

According to the Education Bureau’s recent announcement, the amount of government funding each kindergarten is entitled to will be determined by its enrollment size, which means the more students you have, the more money you will get. The arrangement is likely to put small kindergartens at a huge disadvantage.

These kindergartens might be smaller and have lesser students, but their operation costs are still astoundingly high, not to mention that they cannot benefit from the kind of economies of scale that big kindergarten chains have, which can often spread their costs evenly among the schools in their groups.

Many small kindergarten operators are worried that they could be driven out of the market in the long run.

Meanwhile, according to the government’s latest announcement, subsidies for each student at half-day kindergartens will stand at HK$33,190 per year, while the amount of money for each student enrolled at whole-day kindergartens and kindergarten-cum-child care centers will be HK$43,150 and HK$53,100 respectively.

This might sound a lot, at least for half-day kindergartens, but for whole-day kindergartens, and particularly kindergarten-cum-child care centers, this amount only represents the bare minimum.

It is because even though funding for these schools is 1.3 and 1.6 times higher than that of half-day kindergartens, it can hardly cover their costs once the free kindergarten education scheme is fully implemented, under which the amount of school fees they can charge will be strictly regulated.

Worse still, these kindergartens cannot take in more students, in order to maximize the funding they receive, due to the size of their school premises and fire safety requirements. Many of these kindergartens, which are already run on a shoestring, fear they may be put out of business after the full implementation of the program.

I believe these are some of the key issues that the Education Bureau must address in order to guarantee that the free kindergarten education program will deliver the desired results for students, parents and kindergarten operators as a whole.

This article appeared in the Hong Kong Economic Journal on Sept. 29.

Translation by Alan Lee

[Chinese version 中文版]

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Director of Hong Kong Society for the Protection of Children

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