Disbursement of 2017 subvention to local gov’t councils well underway- Minister Bulkan

GINA, GUYANA, Wednesday, May 3, 2017

Minister of Communities Ronald Bulkan has informed the Government Information Agency (GINA) that 51 of the 65 Neighborhood Democratic Councils (NDCs) have already had the first half of their 2017 subvention programmes approved. This translates to approximately $2Million for each of the 51 councils.

The disbursement of the remaining 50 percent of the NDCs subvention would be dependent on the council meeting the criteria under the Fiscal Transfer Act.

Minister Bulkan explained that under the Act, to be eligible for the remaining 50 percent, there are certain deliverables each council has to demonstrate. These deliverables consist of such achievements as efficiency in their rate collection among others.

Minister Bulkan also reported that eight out of the nine have had their subvention, which totals $146Million, approved. The sole exception is the Georgetown Municipality, which “has been a bit tardy.”

The issue of financing has been the Achilles heel of the local government system and the councils, in particular. Most, local government councils, with very few exceptions, do not have sufficient financial resources to undertake their annual work programme. The councils are largely dependent on Central Government subvention to execute these works.

In recognising this, in 2017 the administration increased the subvention to the local councils. From the amount of $3Million that was subvention in the past was increased to $4Million per each NDC.

It is however, expected that the local councils be self-financing (generate their revenue.) The challenge with that though has been the issue of property assessment, which is the rate that a local council is legally authorised to exact from each property owner.

The dis-functionality of this assessment regime has led to challenges in all of the councils not being able earn the revenue that should accrue to them via their rates on properties.

The government has been working to address this deficiency. Through the Ministry of Finance, earlier in the year, the Inter-American Development Bank (IDB) loan was approved for a technical consultancy to upgrade the capacity valuation office to better provide the local councils to enhance and modernise their property assessment capability, and the property assessment system.

Minister Bulkan said that once this process begins, it will permit the local councils to increase their financing, and allow them to become less dependent on Central Government.

Of the 2017 Budget approved funding for the Ministry of Communities; a significant portion ($1.043Billion) covers the provision of subvention to the local councils.

The sum of $206Million covers the Municipalities, $264Million the NDCs, and $556Million the inclusion of an aspect of the Community Improvement Programme under the functions of the local councils.


By: Macalia Santos