Seventeen Neighbourhood Democratic Councils (NDCs) have received $4 Million subventions from Central Government to finance their activities while 19 others have gotten smaller sums under historic local government legislation.
The sums were provided under the Fiscal Transfers Act which sets out criteria through which resources are to be allocated to local authorities. The application of the Act is seen as a key part of revitalising the local government system following the March 18 elections – the first since 1994.
In this year’s budget, $401 million has been approved for subventions to municipalities and NDCs. During the budget debate, Minister Ronald Bulkan had told the House that$153 million will be for the nine municipalities while the remaining $248 million will support the 62 NDCs. It has since been explained by the ministry that of the lump sum, $24 million has been budgeted for Georgetown, $16 million for the municipalities of New Amsterdam and Linden, $15 million for the other six municipalities and $4 million for each NDC.
In June Minister Ronald Bulkan had explained that the ministry is prepared to provide each NDC with the subvention provided that they were able to submit an appropriate work programme.
Since that time 59 NDCs have submitted the requested work programme and have consequently had sums approved for their use.
Of that number 17 have received the $4M, 19 have received partial allocations due to adjustments in the submitted work programmes and 23 had been approved to receive the sums which were being processed by the Ministry of Finance,
Three NDCs, Malgre Tout/ Meerzorgen and La Grange/ Nismes of Region 3 as well as Seafield/Tempe of Region 5 have not submitted the requested programme.
The data provided by the ministry shows that the adjusted sums allocated range from $370,160 for the Blairmont/Gelderland NDC to $3,939,926 for the Kilcoy/ Hampshire NDC. Malgre Tout/Meer Zorgen is one of the five LGAs whose March 18 elections results saw the APNU+AFC coalition gaining the same number of council seats as the PPP.
In total the Ministry has released $89,921,975 of the budgeted $248M.
Meanwhile, each municipality has received 50% of their allocated subvention. According to the Ministry they are expected to submit “financial requests” in order to access the other 50%.
The Fiscal Transfers Act is designed to prevent “arbitrary or capricious allocations”; rather it allows for the use of objective criteria in the funding of Local Government Authorities (LGAs).
According to Clause 6 (1) of the Act: “The annual subvention or fiscal transfers, from central government to local authorities shall be based primarily on a set of conditions and stipulated performance indicators so as to form an aggregate sum referred to in the Schedule.”
The Act defines “sets of conditions” as “the criteria used to determine the sum of money appropriated by Parliament annually to local authorities and of which fifty percent is allocated equally among those local authorities with the remaining fifty percent being allocated to the local authorities in accordance to variables, such as population size, geographical area or stipulated performance indicators which may be changed by the Minister by regulations.”
It defines “stipulated performance indicators” as “the rate of collection of taxes by each local authority.”
Though it does not stipulate a “work programme” as a requirement for the receipt of allocations the ministry has set this criteria as a means of encouraging “some sort of financial responsibility”, Permanent Secretary of the Ministry Emile McGarrell had told Stabroek News.
He had noted that while there is still work to be done to ensure complete adherence to its provisions, the ministry has begun using the Act to compute the government subvention to be provided to each of the local authority areas.
So far the poor collection rate of many NDCs has curtailed a strict adherence to the provision as such would see LGA’s being provided with much less than they required, McGarrell had explained.
“It’s kind of like the chicken and egg. The local government areas are not collecting revenue so they can’t access funds. If they can’t access funds then they can’t provide services to the citizens and if the citizens are not provided with services, then they don’t want to pay rates and taxes which starts the cycle all over again,” he had said.
