Infrastructure subvention for AHs is in the agenda of specialised parliamentary committee

In Ukraine, state guarantees to provide the minimum amount of financial support to the voluntary amalgamation of hromadas in course of five years, starting from the year following amalgamatiom, are intended to be legislatively enshrined. The relevant Governmental draft law was considered at the meeting of the Verkhovna Rada Committee on State Building, Regional Policy and Local Self-Government.

MinRegion stated that this would allow the state to pay equal attention to all hromadas that amalgamate volantarily and to financially assist them in the infrastructure restoration and development during the first five years.

The subvention for infrastructure development of amalgamated hromadas has been envisaged in the state budget annually, starting from 2016. The volume of such subvention to be received by each AH is calculated based on the number of rural population and the size of the rural area of ​​such hromadas.

However, given the fact that the number of AHs is increasing each year, the amount of subvention per capita is decreaseing annually. MinRegion considers this state of affairs to be discriminatory in relation to those hromadas that have switched to direct interbudgetary relations in 2019 or will switch in subsequent years.

Thus, in 2016, when the first 159 AHs switched to direct interbudgetary relations, the total infrastructure subvention amounted to UAH 1 billion or UAH 1107 per one hromada resident. In 2017, there were already 366 AHs, and out of UAH 1.5 billion of subvention provided by the state budget, the sum per citizen reached UAH 764. Last year, this figure amounted to UAH 536, as 665 AHs switched to direct interbudgetary relations, and the total infrastructure subvention amounted to UAH 1.9 billion.

In 2019, AHs may receive even fewer subvention funds per capita. This year, already 806 AHs work on direct interbudgetary relations with the state budget, and the volume of infrastructure subvention is UAH 2.1 billion and UAH 495 per AH resident – twice less than in 2016.

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So that newly formed AHs at the very start of their own development process receive no less state support than that the one received in previous years by other AHs, and in order for those amalgamated hromadas, that will be voluntarily form in this and subsequent years, also have a guaranteed minimum financial support, the Government proposes to enshrine it legislatively. The proposed norm presupposes that the state will provide financial support for the voluntary amalgamation of hromadas by providing AH with a subvention for a period of five years starting from the year following amalgamation.

For example: according to the results of four years (2016 – 2019), UAH 1107 were accrued per one AH resident (2016) + 764 (2017) + 536 (2018) + 495 (2019) = UAH 2902.

“This will be fair regarding those hromadas that could not amalgamate earlier of the reform. And this is just as fair with regard to those hromadas that have been receiving such support for several years already and have been able to solve many problems and, moreover, have started earning their own money. Those, who amalgamated later, face the same problems as those hromadas formed in 2015. Therefore, they should receive no less assistance from the state,” commented Vyacheslav Nehoda, First Deputy Minister of Regional Development, Construction, Housing and Communal Services.

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