It is with great pleasure that I present this foreword for the Annual Report 2002-2003 for the first time as the Chairman of the Council since my appointment by the Chief Executive in April 2003.

In the ninth year since the inception of the Institute, the academic year 2002-03 was both fruitful and eventful. The Institute, being the largest provider of professionally trained teachers in the tertiary sector of Hong Kong, has made remarkable progress in maturity and academic quality.

The Council is particularly glad to have received the University Grants Committee's (UGC's) Teaching and Learning Quality Process Review Report in January 2003, which highly commended the fine quality of the Institute and serves as a testimonial of the progress it has made. The President will elaborate on this in his Overview.

In the course of the development of the Institute, we are also aware of the urgent and important need to be constantly defining and redefining its role and position in the ever-changing social context. The UGC Report on Higher Education in Hong Kong written by Lord Sutherland published in March 2002 recommended that tertiary institutions in Hong Kong should develop and define their roles and mission in order to achieve differentiation and provide for the community's diverse needs.

The Council, the staff and students endorse the need for a diversity of institutions in Hong Kong with distinctive missions. We also acknowledge the need for the Institute to plan ahead to address the declining resource situation. Hence, the Council set up a Task Force on the Future Development of the Institute in December 2002. Subsequently, three focus groups were formed to examine its long term role and positioning, medium-term and long-term financial and staffing review, the identification of cost improvement opportunities; and the Institute's governance structure to ensure strategic focus, fiscal responsibility and transparency.

While a full report is expected to be produced by early 2004, I am glad to relay that the Focus Group on Resources has moved at a faster pace to recommend the implementation of annual savings of about $60 million through austerity drives and efficiency gains. It also drew up a range of staffing related plans such as redeployment, freezing of vacancies, introduction of a voluntary departure scheme for non-teaching staff, and in the longer run, de-linking the staff salary structure from that of the civil service.

Effective communication is the key to success in implementing such change plans. Two major rounds of staff consultation and briefings were held in March and June, to inform and advise staff and listen to their views.