Filenews 17 August 2022 - by Eleftheria Paizanou
At a time when the procedures for the implementation of the reform of Local Government are running, which, among other things, provides for the reduction of the number of Municipalities to 20, the state sponsorship that the 30 Municipalities will receive next year remains at the same levels as this year. The state grant, which is divided into three parts, will be worth €70.8 million. The amount of the state grant in 2023 will be €51.1 million. To these will be added an amount of €17.5 million. concerning sponsorship against the abolition of business tax. In addition, they will be granted an amount of €2.1 million the amount to the funds against the Diavlia, which were abolished decades ago.
Based on the current model of Local Government, the five Municipalities that will receive next year, the largest state support are:
-Limassol Municipality will receive an amount of €10.3 million.
-Nicosia Municipality will receive financial support of €9 million.
-Municipality of Strovolos, will receive from the state an amount of €6.5 million.
- Larnaca Municipality will be granted an amount of €5.8 million
-Paphos Municipality, which will receive a total amount of €3.4 million.
The transition to the new form of Local Government is expected in June 2024. Information meetings have already begun and in the coming months, staff training will begin to ensure that the implementation of the reform is smooth. Due to the reduction in the number of municipalities and the consolidation of the services of the local authorities, savings of €30 to €50 million are expected. According to the reform, five municipalities will be created in Nicosia district, four in Limassol district, five in Larnaca district, four municipalities in Paphos district and two in Famagusta district. Also, the way municipalities are financed is changing. In the meantime, based on the state sponsorship that will be given to the municipalities next year, if the reform of Local Government were implemented in 2023, only by reducing the number of municipalities, the state would save an amount of €7.6 million. That is, next year's sponsorship, which would correspond to the five schemes of the municipalities of the Nicosia district, would be €27.1 million, of the four municipalities in the Limassol district would be €17.5 million. of all five municipalities in Larnaca district would be €10.4 million. Moreover, in the four new municipalities in the district of Paphos the grant would be €6.1 million and in the Famagusta district would be €2.1 million.
Changing the way of financing
Based on the reform of the Local Government, the way of financing the local authorities will change. The budget of each municipality will be uniform for all municipal districts. It should be in balance or in surplus. Each year, the municipal council will determine the maximum amount of the expenditure budget for the following year of each of the municipal districts. It will also commit the available resources, in addition to its operating costs, for the implementation of projects of the municipal districts, in proportion to their population and needs. In the meantime, the state sponsorship of the new municipalities will be €117 million, except in cases where the country will be in times of severe economic recession or has entered an excessive deficit procedure. The distribution of the state grant will be made after consultation with the Union of Municipalities and the Minister of Interior.
BY IDENTITY
They will all gain from reform
Everyone will gain from the reform of Local Government. By changing the way of financing, that is, by abolishing state sponsorship and saving, resources to local government will increase in the medium term. In particular, the state will save resources due to the reduction of Municipalities and the consolidation of services. At the same time, the citizen will also benefit as he will not have to turn from Municipality to Municipality to be served. Now the big bet is the transition to the new era of Local Government in the summer of 2024. The procedures must be initiated at a rapid pace and there must be cooperation between all parties in order for the reform to take shape within the timescales.
