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St Stephen's Girls' College has decided not to pursue for now its application to join the Direct Subsidy Scheme.
The decision by the century-old elite school was made on the advice of a task force it set up last month to study the proposal.
In its announcement yesterday, the school said that in March this year it had decided to explore the possibility of St Stephen's Girls' College and St Stephen's Girls' Primary School joining the DSS.
Since then the school council held more than 30 meetings with various stakeholders who had a divergence of views and could not reach a consensus.
In July, the school council set up the task force which analyzed the feedback collected during the consultation process and decided this was not the right time to join the DSS.
The task force said the topic has proven to be deeply divisive to the school community and has negatively affected unity in the school.
"In view of this, the council further accepts the recommendation of the task force to refrain from submitting any application to join DSS at this juncture. In this connection, the stakeholders' survey on DSS should be suspended," the announcement by the school council said.
"It is the hope of the council that in the meantime, all parties set aside their differences and instead focus on the interests of the school and the provision of quality education for our students."
The school council has requested the task force to recommend a series of measures with a view to attaining the long term development of the SSGC.
The task force has undertaken to submit a final report by the end of October.
Former pupil Joy Liu Shuk-wah welcomed the decision though she feared the school could reapply in the near future.
She said the alumni concern group wants the DSS frozen for now and will follow up on its requests made to the Legislative Council secretariat complaints division before the Legco's summer break.
She said they hoped the government will instead improve its government-subsidy scheme.
Liu added that the school appeared to be contradicting itself, as it earlier said the three-month engagement process was adequate.
She stressed that the group is more concerned about the quality of the engagement process, instead of the length of time.
"More importantly, our major concern is our school's values and the the social impact of the change to DSS," Liu said.
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