UGC > UGC Publications


	Home UGC Publications Major Reports from the UGC Higher Education in Hong Kong - A Report by the University Grants Committee 1999 Supplement (May 1999) Chapter 10 : Unit Costs


	Chapter 10 : Unit Costs

Section B The Costs of Higher Education
Chapter 10 : Unit Costs

(cf Chapter 36 of "Higher Education in Hong Kong" (1996))

10.1

The crudest measure of unit cost is to take the non-specific annual expenditure of an institution (corresponding fairly closely on the income side to grant, if any, plus fees, if any) and to divide it by the fte number of students (Table 10.1).

Table 10.1 Unit Costs

	HK$/student year
	1995-96	1997-98
Primary School
Government	19,041	22,155
Aided	15,394	18,409
Secondary School
Government	31,241	37,549
Aided	22,222	27,212
UGC Institutions ¹	201,842	230,000
HKAPA	199,042	215,568
VTC Technical Colleges	87,500	93,300
HKIEd ¹	136,281	N/A ¹

Notes:	¹ HKIEd became a UGC-funded institution in 1996
Source :	UGC Secretariat and institutions concerned

According to this analysis, higher education in UGC HEIs is eight times as expensive as secondary school work. The figure for higher education is, however, regarded by some as misleading. There is a good deal of activity in universities which is not closely related to teaching students, of which the largest component is usually research. The unit cost for UGC institutions in Table 10.1 might possibly therefore be reduced by a factor somewhere in the range 0.6 to 0.9 and the ratio with secondary school costs then becomes about six. Whether the removal of the research component of cost is legitimate is a matter of some controversy, since proximate research undoubtedly enhances teaching.

10.2

The figures quoted in paragraph 10.1 are crude average unit costs. Within higher education, however, as we noted in paragraph 8.1, there are wide variations in student/staff ratios between subject areas and these, and other factors, lead to wide variations in unit costs. Taking the unit cost of a typical humanities department (excluding languages) as 1.0, the likely range of relative cost weightings is shown in Table 10.2.

Table 10.2 Range of relative Cost Weightings (teaching)
by Academic Programme Category

Academic Programme Category	Relative Cost Weightings
Clinical medicine	4.8 - 5.4
Clinical dentistry	5.9
Pre-clinical studies	2.2 - 2.5
Subjects & professions allied to medicine	1.4 - 2.4
Biological sciences	1.3 - 3.8
Physical sciences	1.3 - 3.2
Engineering & technology	1.2 - 2.3
Built environment	1.0 - 1.6
Mathematical science	0.9 - 1.5
IT & computer science	0.9 - 1.5
Business & management	0.8 - 1.6
Social sciences	1.0 - 1.6
Languages	0.8 - 1.5
Humanities (ex languages)	0.9 - 1.2
Arts, design & performing arts	1.3 - 1.8
Education	0.9 - 1.4

Source : UGC Secretariat and institutions concerned

Using the current distribution of students by subject in UGC HEIs, the average factor is 1.56. This corresponds to the overall average unit cost (when the non-teaching element has been removed).

10.3

Higher education is not homogeneous as to level. The UGC institutions, HKAPA and OUHK engage in postgraduate, undergraduate and sub-degree teaching. The Technical Colleges and most other providers of higher education in Hong Kong offer sub-degree courses or CPE. The unit costs of sub-degree, taught postgraduate and research postgraduate teaching tend to be about 64%, 105% and 176% respectively of those of undergraduate courses. Calculations of unit cost are also sensitive, of course, to the factors used when converting headcounts of part-time students to full-time equivalents. There are various ways of determining these factors, but those based upon completion times are probably the most satisfactory.

10.4

Overall unit costs are determined by very many influences, some permanent, some temporary, some structural and some related to quality. Between 1990-91 and 1997-98 the gross unit cost of the UGC institutions increased from HK$186,000 to HK$230,000 (at mid-1997 price level). This 24% increase was due in part to a substantial growth in research activity, in part to a change in student mix towards the more expensive levels and subjects, in part to "front-end loading" (the provision of staff ahead of students in rapidly expanding institutions in order to plan and organise new courses), and in part to the introduction of various UGC initiatives to try to improve quality such as grants for language enhancement, teaching development and inter-institutional collaboration. There were also increases in remuneration for doctors and some staff not formerly paid on university scales, and improved housing benefits.

10.5

The unit costs which we have considered so far have been on an annual basis. They have to be multiplied by course length to obtain the total cost of a particular stage of education. Taking the unit costs from Table 10.1, but reducing the figure for higher education by 25% to allow for non-teaching activity, we obtain the costs for each stage of education shown in Table 10.3.

Table 10.3 : Unit Costs

	1995-96			97-98
Stage	Unit Cost	Length	Cost	Unit Cost	Length	Cost
Stage	HK$ / student yr	years	HK$ / student	HK$ / student yr	years	HK$ / student
Primary
Government	19,041	6	114,246	22,155	6	132,930
Aided	15,394	6	92,364	18,409	6	110,454
Secondary
Government	31,241	7	218,687	37,549	7	262,843
Aided	22,222	7	155,554	27,212	7	190,484
First Degree	151,500	3	454,500	172,500	3	517,500

Clearly, increasing course length at any stage or transferring a year to a higher category is likely to be very expensive, even after allowing for some consequent modification of unit costs. At present, the three-year length of most of our first degrees makes them very cost-effective compared with longer courses elsewhere in the world.