The Housing Department plans to delete 27 directorate posts and about 2,500 non-directorate posts, reducing its establishment by 30% in the next four years. The revamp will bring about $1.3 billion in savings a year.

Under proposals put forward by Permanent Secretary for Housing, Planning & Lands Leung Chin-man, workflow will be streamlined and efficiency improved, enabling the department to respond to service demands more effectively.

The streamlining initiatives followed a comprehensive review of the department's structure at all levels during the past six months.

The review has taken into account factors including the new housing policy announced last November, changing market conditions, and changes in service requirements and modes of delivery.

The proposed revamp is a result of the first of the two-part review, which focused on senior management. Mr Leung said it is "an essential component of the ongoing '360-degree' reform of the department".

Assuming that the proposed divestment of the Housing Authority's retail and car-parking facilities can be completed by 2006/07, 27 directorate posts will be deleted, representing a reduction of 37% of the establishment as approved by the Legislative Council's Finance Committee last December.

The deletion includes two deputy director posts (D3), nine assistant director posts (D2) and 16 chief manager/professional posts (D1), resulting in savings in annual staff cost of $60 million.

"Considering the structural changes in the authority's revenue sources and the stringent financial difficulties facing the authority, we must respond by streamlining our organisation structure to save costs and enhance productivity," Mr Leung said.

In light of the substantial scaling down of public housing production and the resultant reduced demand for staff, it is anticipated that about 2,500 non-directorate posts, including both civil service and contract posts, will be deleted through natural wastage, voluntary departure and non-renewal of contracts gradually between April this year and March 2007.

Taking into account some 1,000 posts already deleted between October 2002 and April 2003, the reduction of the department's establishment will be close to 30%.

Phase two of the review on the non-directorate structure is underway.

"We are looking at ways to reduce the number of business units and de-layer operational structures by moving away from the traditional hierarchical structure so that technical and professional grades staff can work more closely together," Mr Leung said.

Together with the divestment proposal under consideration and other external factors, there will be further impact on the department's non-directorate staffing requirements.

"While it is premature to assess the number of surplus staff at this stage, we will explore redeployment opportunities both within and outside the department, for example, on work relating to the rehabilitation of older estates and initiatives to improve environmental hygiene and cleanliness in public housing estates," Mr Leung said.

"The department is undergoing a full-fledged reform driven by various internal and external factors."