Volodymyr Groysman to local authorities: No need for any regional agreements, funds are already at the local level thanks to decentralization

Prime Minister of Ukraine Volodymyr Groysman believes ineffective agreements on the distribution of powers between the central and regional authorities and advocates the development of partnerships using the possibilities of fiscal decentralization, Volodymyr Groysman said this opening a Government’s meeting on Wednesday, 8 June.

The Prime Minister recalled his own experience of signing regional agreements with the Government, which has proved to be ineffective. "I remember initiative of such agreements in 2008 or 2009, when the Government concluded agreements with the regions. Do you know the result? The procedure of signing. I was one of those who signed such a regional agreement. Hot air. A lot of promises, but everything remains in Kyiv, nobody gave any money," he stressed.

Instead, today revenues to local budgets have significantly increased due to the launched fiscal decentralization, Volodymyr Groysman reminded. "Today, tens of billions have been handed to the local level. You do not need any agreements, funds are already on the ground. You just have to use them skillfully, while the state will help and support you," he noted.

The Prime Minister urged the local authorities to build up partnerships with the central government. In turn, the Government will continue the transfer of authority to the local level, he pointed out.

The Prime Minister assured that the Government would keep bolstering the local government and decentralization and asked the local authorities to be efficient as people are looking forward to changes.

According to him, the decentralization reform, launched in 2014, as well as fiscal decentralization and the transfer of powers to the bottom have already shown positive results.

So, for 5 years the general fund of local budgets has received almost UAH54 billion as a result of fiscal decentralization. This is about 17 billion more compared to the same period last year, the Prime Minister informed. "In fact, our growth rate makes up about 50%. What does this mean? It means that these funds should be directed to the quality of life of people in the regions, including roads, clinics, stadiums, schools and kindergartens. We have enough money," said Volodymyr Groysman.

The Prime Minister also noted effectiveness of the voluntary association of communities. Thus, the general fund of local budgets of integrated local communities taking into account government transfers in 2016 has increased by almost 5 times, and their revenues - 2 times.

"Every citizen, every resident of the village, town, city, district, if you see road repairs, a new school, a new hospital and a new clinic, a new garden, a new boiler – these are the results of decentralization," said Volodymyr Groysman. He also urged the local authorities to talk about the achievements of fiscal decentralization.

The Prime Minister reminded that the State Regional Development Fund of Ukraine would allocate UAH3 billion to local communities as well as the resources of the Socio-Economic Development Fund. "Because of the decentralization the local authorities have funds at the regional level and at the district level as well as at the community level," he stressed.

"This is energy efficiency, this is a lot of economic things to be done for people, including for the development of the local economy," noted Volodymyr Groysman and added that the regions possess enough resources to ensure, in particular, the construction of new plants. He also urged the local authorities to promote the creation of new job and legalization of wages.

However, Volodymyr Groysman emphasized the need to change approaches of the local authorities to the effective use of these resources.

"If earlier tens of billions were concentrated in the central budget of the Ministries, today these tens of billions are in your local budgets. Show how effective you are, how competitive and give the result. What would we like to see? I emphasize: new roads, new sidewalks, efficient environment. Everything is real and possible," underlined Volodymyr Groysman.

Meanwhile, the local authorities should be controlled by society and use budgetary funds transparently. "These resources belong not to city councils, but to communities, people. It is most crucial that mayors, executive committees, councils be accountable to and under the control of people, clearly articulate on what these funds to be spent," he noted.

Volodymyr Groysman stressed that decentralization is one of the key reforms in Ukraine, which should be continued and needs a new impetus. The Prime Minister pointed out that the decentralization reform was aimed at a few things: independence of self-government, a financial base and transfer of powers, of course, under the state and public control, and provision of qualitative services [by the State].