The University Grants Committee (UGC) is appointed by the Governor with the following terms of reference :

1. To keep under review in the light of the community's needs :

1. the facilities in Hong Kong for education in universities and such other institutions as may from time to time be designated by the Governor;

2. such plans for development of such institutions as may be required from time to time;

3. the financial needs of education in such institutions; and

2. To advise government:

1. on the application of such funds as may be approved by the Legislature for education in such institutions; and

2. on such aspects of higher education which the Governor may from time to time refer to the Committee.