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Chapter 24: The Future of CPE and its Funding
24.1 The volume of CPE in Hong Kong is already high. In a survey in 1991 by F.T. Chan and J. Holford of SPACE, the authors concluded that 900,000 adult students were taking part-time continuing education courses each year, and were paying fees of nearly HK$2,500m. 35% of the students were attending courses run by private profit-making organisations and only 20% those which were provided by UGC institutions or the OLI. Not all of these students were registered on courses which we would regard as higher education, and of those that were, many would be engaged on "second chance" attempts to gain an initial tertiary qualification, an activity which we have excluded from the present chapter. Nevertheless, we estimate (see paragraph 12.7) that there are left 320,000 students currently taking higher level CPE courses, with a full time equivalence of 46,000. This compares with 56,000 fte students on first degree courses and another 22,000 fte students following courses leading to higher diplomas or their equivalents.

24.2 World-wide there is continuing growth in CPE and a convergence between it and initial higher education. This is consistent with the policy advocated by OECD for more than two decades of reducing the "front-end loading" of traditional higher education and distributing post-secondary learning more uniformly over a student's lifetime. The same point has been made in evidence given to us in response to our Interim Report. There seems little doubt that Hong Kong will follow this world trend, but there is more than one possible route of future development. At the international conference on "Developments in Continuing Education: An East-West-Perspective" (Baptist University, 1993), P. Jarvis distinguished between two CPE needs: that of the primary sector of the labour market, which is knowledge-based; and that of the secondary sector which is concerned with basic occupational skills. He emphasized the growing importance of recognised qualifications in the primary sector, so that even in-house courses were now awarding or seeking credit. Employees in the primary sector wished to have a personal portfolio of qualifications in order to improve their job opportunities. Those in the secondary sector, by contrast, required a range of skills, which might extend from those needed for diverse occupations, to social and life skills which may be helpful both in gaining work and in achieving social identity. There is some evidence that in Hong Kong we need to devote more attention to the secondary sector.

24.3 Another distinction which needs to be made in discussing the future provision of CPE is between courses linked to professional and occupational development and those concerned with the cultural and leisure interests of the individual. The difference, as we have noted earlier, is not absolute and in many cases may depend on the motivation of the student, but there is some evidence in affluent societies that continuing general education is becoming important. Jarvis cites the example of the UK Open University, whose non-vocational distance learning courses are expanding rapidly throughout Europe. The evidence in Hong Kong is not clear. The CHL survey, from which we quoted extensively in the last chapter, reports a growing need for professional education specifically targeted at well-defined client groups, and this demand has been drawn to our attention by both providers and employers.

24.4 On general interest themes, the School of Continuing Studies comments that there has been a decline in recruitment to its own short self-enrichment courses, but ascribes this to competition. SPACE and SCE report no diminution in demand and both in evidence to us have stressed the importance of provision for personal development and "quality of life". We have eschewed in this chapter "generic" continuing education i.e. courses essentially providing part-time alternatives to conventional full-time tertiary education - but the CHL survey reports a decline in demand for this due to growing full-time provision. Most providers agree that there is a decline, but it is uncertain whether this is a short-term or long-term phenomenon.

24.5 Government has not hitherto been involved in the planning and financing of CPE in the ways in which it has for full-time post-secondary education. There are many reasons for this, including the fact that CPE is largely self-supporting, that much of it is market driven and responsive to need on quite short time-scales, that CPE mainly uses marginal resources, and that compared with full-time education it is not a major financial enterprise. So if at present CPE is small, costs little, and does not need long-term planning, government can ignore it. But for the future, all of this may change. At present, the number of fte students in CPE is about one third the number in conventional higher education and the subsidy from public funds is largely limited to a transfer from block grant of HK$2.7m at SCE, HK$3m at PACE, HK$5m at SCOPE and HK$29m at SPACE. For demographic, employment and cultural reasons, however, that ratio is likely to increase.

24.6 One way of providing the resources for the expansion of CPE is to take them from conventional higher education and achieve the more uniform spread of learning over a life-time which the OECD advocates (see paragraph 24.2). It has been argued in evidence to us, and more generally by a number of eminent educators worldwide, that a shorter undergraduate course is an adequate preparation for initial employment (even in the sciences) and that this should then be built upon throughout a career as specific needs become more apparent. Assuming that the people of Hong Kong were willing to continue their present level of spending on higher education, this through-life education could be largely paid for by government, since it would cost no more than the front-end loaded system, with three-year undergraduate courses, which we have at present.

24.7 Although the redistribution of learning resources described in the previous paragraph has a number of attractions, it represents too draconian a break with present practice for it to commend itself in an affluent society. A more probable scenario is that CPE will grow, but that initial higher education will continue to need at least its current level of resource. In any case, it seems likely that in a knowledge-based society, the learning required of an individual will increase absolutely, not merely require more uniform temporal distribution. We are left, then, with the question of how an expanding CPE is to be funded.

24.8 The present financial arrangements have grown up largely as a matter of historical accident and contain many inconsistencies. Very similar courses in the same institution have attracted substantial public subsidy or almost none, depending on the details of the provision. By and large, courses provided by UGC institutions, statutory bodies and charities and other non-profit organisations tend to have an element of subsidy, although this may not be readily discerned. Courses provided by private profit-making firms are at economic cost. Those given in-house by government or the larger companies are provided from their normal operating costs and no charge falls upon the student. The current system works well and is responsive to the needs of both the market and the individual: it may be wondered why the UGC needs to express an opinion at all. The reason is that we believe that expanding CPE is important to the future economic and social well-being of Hong Kong, that this will proceed better if given some small financial encouragement by government, and that this support should be limited to certain specific objectives.

24.9 In considering our recommendations we have noted carefully the advice given to us during the consultations following our Interim Report and that contained in the CHL Report. We believe that courses leading to an initial higher education qualification, not covered in the present chapter, some of which are given by CPE units, are worthy of public support (see Section I). Excluding those courses,
  1. support of the infrastructure or "core staff" of units engaged in CPE should be determined by their non-CPE role and by the objectives in (iii) and (iv) below;

  2. the costs of all established courses which may contribute to professional or employment enhancement should be covered in full by fees;

  3. the "start up" costs of some new courses which it is in the public interest to establish may be too heavy to be recovered in total from subsequent fees. A development fund, to be agreed with the parent institution, should be made available to a CPE unit for this purpose; and

  4. courses whose primary purpose is social benefit (such as the upgrading of teachers and social workers) may be subsidised.

If our recommendations are accepted, the permanent staff of CPE units would be largely supported by student fees (particularly from (ii)) and by public funds accruing from their contribution to initial higher education qualifications (see paragraph 22.1).

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