The Taxpayer Support to Regions has Increased Thirtyfold, to UAH 15 Billion, an Expert Says

The amounts of government financial support for the development of communities and local infrastructure have substantially increased. The aggregate amount of that support totals approximately UAH 15 billion.

It was so informed by Yanina Kaziuk, Financial Decentralisation Coordinator of the Central Office for Reforms at the Ministry of Regional Development (with the assistance of the U-LEAD with Europe Programme).

She reminded that, on 2 August 2017, there were published amendments to the State Budget of Ukraine for 2017 (Law No. 2137), whereby amendments the amount of funds allocated to local budgets was significantly increased.

Subject to those amendments, in addition to social expenditures, the funds to local budgets for the development projects were increased up to UAH 5.27 billion, including UAH 270 million for the construction of football fields with artificial turf in the regions of Ukraine.

Also, a new type of government grant to local budgets has been introduced - for the implementation of measures aimed at the development of the health care system in rural areas, the amount of which government grant totals UAH 4.0 billion. The Ministry of Regional Development has been determined as the primary manager of funds of that government grant, which ministry is responsible for the implementation of the reform of local self-government.

"Under the conditions of reforming the health care industry and of decentralisation of power and devolution of financial powers, those funds should help the bodies of local self-government to create proper conditions for rural health care and ensure the development of the infrastructure of primary care facilities", Yanina Kaziuk noted.

Hence, the financial support to local and regional development for 2017 is provided for in the amount of approximately UAH 14.9 billion:

UAH 5.0 billion - the government grant for social and economic development;

UAH 270 million - the funds for the construction of football fields with artificial turf in the regions of Ukraine;

UAH 4.0 billion - the government grant from the state budget to local budgets for the implementation of measures aimed at the development of the health care system in rural areas;

UAH 3.5 billion - the State Fund for Regional Development;

UAH 1.5 billion - the government grant for the formation of infrastructure in the amalgamated territorial communities.

In addition, UAH 650 million is appropriated for the regional development projects in 2017 to be implemented for the account of funds of the state budget received from the EU under the Agreement on Financing the Sector Policy Support Programme - Support to Ukraine's Regional Policy.

Consequently, the total amount of budgetary aid to regions has increased thirtyfold in comparison with 2014, which fact gives ground to speak about the efficiency of budget decentralisation.

"Now, it remains to expect that local authorities actively develop and implement interesting projects aimed at the improvement of services to the community residents, the improvement of infrastructure, social facilities, and roads condition", Yanina Kaziuk summed up.

Reference information

In 2014, the state budget appropriated only UAH 0.5 billion for the support of the social and economic development of regions. In 2016, the amount of finance for the implementation of infrastructure projects increased by almost UAH 7 billion and totalled UAH 7.3 billion.

For the account of those funds, 5,904 projects have been implemented, which projects are aimed at the support of local and regional development. 523 bodies of local self-government received funds for projects of social and economic development.

In 2016, the amalgamated territorial communities received a UAH 1 billion government grant from the state budget for the support of infrastructure, 95% of which funds they managed to use and implement 1,383 projects. 

The Financial Monitoring Team of the Central Office for Reforms at the Ministry of Regional Developmen

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