CHAPTER 1: BACKGROUND TO ALTERNATIVE POLICY STATEMENT
1.3 Outline / Structure
Following the background above, this Alternative Policy Statement provides a situational analysis of the Ministerial Policy statement FY 2014/15; the alternative policy statement itself; and a summary of the alternative policies being advanced.
7 CHAPTER 2: SITUATIONAL ANALYSIS OF MINISTERIAL POLICY STATEMENT 2.1 Budget Allocation
2.1.1 Inadequate Funding of Local Governments (General)
Budget allocation is an indicator of how priorities have been ordered. The expectation is that local governments should be provided with adequate resources to provide services and undertake development in their areas. However, the fundamental problem of inadequate funding of local governments has not been properly addressed. Local Governments lack adequate finances to provide services at the required level and in the required quantities, because transfers to local governments are based on available resources and not on the actual cost of delivering the services. What is more, up to 95%
of central transfers to local governments are conditioned, meaning that local governments have been turned into mere agents of the central government.
The key issue is that the percentage of fiscal resources transferred to local governments as a percentage of the national budget has been declining over time as indicated below.
Table 1: Transfers to Local Government (Ushs billion)
FINANCIAL
Source: Local Government Financial Commission This raises concerns over government’s commitment to enhancing service delivery at local level.
Quite independent of this, the proposed budget allocations indicate a sharp rise in money provided to some administrative activities even when local governments do not have enough money to deliver services. Examples include the following:
8 Table 2: Budget allocation on select items (Ushs million)
VOTE
FUNCTION ACTIVITY FY 2013/14 FY 2014/15
221002 Workshops and seminars 1,342.4 2,721.0
221003 Staff training 933.4 3,417.9
221007 Books, periodicals and
newspapers 22.8 135.0
221009 Welfare and entertainment 132.0 289.0
225002 Consultancy services – Long term 800.2 5,210.6
Source: MoLG, Ministerial Policy Statement FY 2014/15, pp. 102-103, 227.
Such budgetary allocations should be re-examined in favour of service delivery at local government level.
2.1.2 Unfunded Priorities
Although the Parliamentary Committee on Local Government recommended in FY 2013/2014 that Government should, under the non-wage component of Unconditional Grant, provide local governments with additional Ushs. 21bn so that they can effectively monitor and supervise Government programmes, this has not been catered for in FY 2014/15. According to the MoLG Ministerial Policy Statement for FY 2014/2015:
“Despite the Committee’s recommendation to increase unconditional grant by Ushs.
21bn for FY 2013/14, no change was effected and the figure is programmed to remain the same at Ushs. 60.3bn for districts and Ushs. 19.2bn for urban councils for FY 2014/15.
This implies that LGs will continue to face serious constraints on operational funds to cater for operations and maintenance of Local Government investments, administration and management of council activities, finance, planning and internal audit functions as well as monitoring and supervision” (p.7).
Additionally, the list of unfunded priorities on p.32 of the same Ministerial Policy Statement includes the following items:
9 Table 3: Significant unfunded priorities
UNFUNDED PRIORITIES BUDGET
(Ushs Billion) 1. Special investigations and routine inspections 1.50 2. Procurement of bicycles for village and parish
chairpersons 8.58
3. Physical planning in Urban Councils 0.50
4. Capacity building for MoLG and LGs 2.00
5. Alignment LGs’ development Plans to the NDP 0.50 6. Rent (for new projects- funded by IDB) 0.50 7. Support to professionalizing LGs Accountants and
Auditors staff 0.60
TOTAL 14.18
Source: Ministerial Policy Statement FY 2014/15, p.32.
All these interventions are crucial for the effective performance of local governments. In the case of bicycles, 52 districts received their share in FY 2013/14 and the remaining of 59 districts expected to receive theirs this financial year. Leaving them out will create a huge imbalance that will affect service delivery negatively.
2.2 Key Activities/ Outputs/ Indicators
Madam Speaker, while the activities, outputs and indicators are for the most part supportive of the goals and objectives of decentralized governance, there several examples of inconsistencies in ranking of priorities, especially when comparisons are made with expenditure proposals in some other policy statements that have implications for local government. For example, the Office of the President has been allocated Ushs 27.69 billion under Output 161103, Masses mobilized towards poverty reduction, peace and development, which includes hosting 60 delegations from districts; and a further Ushs 92.69 billion has been allocated to Output 161106, Community outreach programmes and welfare activities attended to, which includes meeting local leaders.
[See: Ministerial Statement on the Presidency, FY 2014/14, pp. 108-110].
Madam Speaker, considering the significance of the unfunded priorities listed in table 3 above for the effective performance of the local government system, we propose that the finances required for them, i.e. Ushs 14.18 billion should be extracted from the outputs in the Ministerial Policy Statement for Office of the President FY 2014/15 just cited.After all, the two outputs in the Ministerial Policy Statement for the Presidency have a lot to do with local govenments and communities.
10 Madame Speaker, there are a number of proposed expenditures in the MoLG Policy Statement on Local Government FY 2104/15 that are not clear, for which some explanation is required. Some prominent examples include the following:
Table 4: Some proposed expenditures that require explanation
OUTPUT/
billion - Why buy vehicles when priorities critical for LG functioning (table 3) are unfunded?
- What is the price of each vehicle?
- Can the money cover all chairpersons?
- Purchase of the vehicles has started even before Parliamentary approval of the policy statement (New Vision, July 21, 2014, p.38)
134923 95 Retreats for MPs 60 million The Local government and public service committee of Parliament has its own budget for this
1323 118 Formulate and disseminate market regulations
The Market Act should be amended instead
132105 115 Procuring address systems for 12 municipal and14 town councils
million 570 -Which municipalities and town councils, and what criteria was used for their selection?
Where will the ministry operate from as its office building is being constructed?
134977 94 Purchase of office and residential furniture and fittings
100
million Who is the residential furniture for?
134971 95 Acquisition of land
by government 3,42
billion What is this land for? Where is it located?
132173 115 Rehabilitation of 1,318 km of community access roads (CAR)
79,98
billion Where are the community access roads located?
134977 123 Settling debts for solar equipment in northern Uganda under a World Bank project
1,67
billion Where in northern Uganda is the equipment located?
How was the debt incurred?
134979 124 Procurement capital assets to support Naguru-Nakawa housing project
100
million What capital assets?
11 The above examples indicate a general problem with the presentation of the Ministerial Policy Statement, in that insufficient details make it difficult to understand the rationale behind some of the proposed expenditures.
2.3 Gaps and Linkages, Opportunities and Risks/ Implementation Challenges
A major issue of concern is that a number of key challenges that were stated in the Ministerial Policy Statement on Local Government for FY 2013/2014 (see pp. 27-28) are still prominent in the Ministerial Policy Statement for FY 2014/15 (see pp.29-31). These include inadequate finding of Local Governments, which greatly impacts on service delivery; weak capacity of local governments resulting from low staffing and inadequate technical capacity; and weak downward political accountability due, mostly to senior political leaders being paid (and therefore controlled) from the centre.
2.3.1 Local Government Capacity
Studies on Uganda’s local government system have indicated that there is a severe shortage of manpower in local governments, with filled positions ranging from 25% to 65% in most local governments. Up to 80% of the filled posts are mainly administrative, common cadres, drivers, office attendants and askaris.1
Regarding staffing of strategic positions in local governments – i.e. CAO, Deputy CAO, Principal Personnel Officer, Chief Finance Officer, District Planner, District Education Officer, District Health Officer, District Production Officer, District Engineer, District Community Development Officer, and District Internal Auditor – there is a very big variation across districts as indicated by a few select examples below:
Table 4: Variation in staffing of strategic posts in select districts2
DISTRICT PERCENTAGE
Agago 8%
Adjumani 25%
Amolatar 17%
Amudat 8%
Budaka 33%
Bugiri 67%
1 Source: Ministry of Local Government, Comprehensive Review of Local Governments: Review and Restructuring of Local Government Structures, September 19, 2013, p. 53.
2Source: MoLG, Ministerial Policy Statement FY 2014/2015, pp.331-334
12
This means that while Kapchorwa has all 12 strategic posts filled (the only one), Agago has just one position filled – that of the CAO. The problem is quite significant when considered in aggregate terms. For example, 31 districts out of a total of 111 do not have CAOs; 56 do not have Chief Finance Officers; 55 do not have District Planners; 56 do not have Principal Internal Auditors; and 47 have less than 50% of the total establishment of strategic posts filled. Regarding municipalities (totaling 22), 3 do not have Town clerks; 6 do not have Principal Treasurers; 9 do not have Senior Planners; 3 do not have Principal Internal auditors; and 5 have less than 50% of the total establishment of strategic posts filled. [See: Ministerial Policy Statement FY 2014/15, pp.
331-334].
Thus the long standing freeze on recruitment in local governments that has been imposed by the Ministry of Public Service has greatly complicated the functioning of local governments.
2.3.2 Local Government Councils
2.3.3.1 The election of Local Council 1 chairpersons has been pending for too long. The position of LC1 is mandated by the Constitution. Since there has been no election for LC1 chairpersons since 2001, all those individuals that have been carrying out the functions of LC1 chairpersons – e.g. recommending passport/travel document applications, recommending university entry, issuing identity cards, etc. – have been doing so illegally.
This has not been addressed up to now.
2.3.3.2 The capacity of local councillors to perform their functions is still low due to education qualifications not being considered for those aspiring to office at local level.
The argument for leaving educational qualifications out in considering candidates for local councils was reasonable in the past, but with the introduction of Universal Primary Education (UPE) and universal secondary Education (USE) a large pool of literate and numerate Ugandans has emerged from whom effective local councillors can be elected.
Time has come to address this problem head-on so that we can have effective councils in Uganda.
2.3.3.3. Furthermore, the local government system is incurring huge expenses by carrying such a large number of councillors. Currently there are 111 districts, 22 municipalities, 56 municipal divisions, 1,116 sub-counties, 174 town councils, 207 town boards and 66,037
13 villages/cells. Clearly, given the limited resources available to the local government it is imperative to reduce the number of councillors for each local government.
CHAPTER 3: ALTERNATIVE POLICY STATEMENT
Madam Speaker, there are several issues that have to be addressed to ensure that the local government system attains the objectives of Uganda’s decentralisation policy. The following constitute some of the most important areas on which we should focus in the immediate future. I wish to draw your attention to the follow:
3.1 Key Focus Areas/Interventions i. Local Government Financing
Local government financing should be looked at afresh, especially with respect to national budget allocation. Local governments are grossly underfunded and this is impacting very negatively on service delivery. The percentage of local government transfers relative to the national budget should be revised upwards to 38% in line with previous parliamentary recommendations. This will bring funding in line with the actual needs of service delivery.
Considering significance of the unfunded priorities to the effective performance of local governments, they should be funded from vote of the Office of the President in section 2.1.2 above.
ii. Local government technical capacity
Local government technical capacity is weak due to the low numbers of core staff in position. The situation is dire if the local government system is looked at as a whole.
Currently 33 Districts do not have a CAO and 3 Municipal Councils do not have a Town Clerk; 56 districts do not have a Chief Finance Officer (CFO) and 6 Municipal Councils do not have a Principal Treasurer; 55 Districts do not have a District Planner and 9 Municipal Councils do not have a Senior Planner; and 56 Districts and 3 Municipal Councils do not have a Principal Internal Auditor3. This is unacceptable. The vacant positions should be filled and accountants and internal auditors should be assisted to obtain professional qualifications in order to enhance technical accountability.
3 MoLG, Ministerial Policy Statement FY 2014/2015, pp. 331-334
14 iii. Local Governments Act
The Local Governments Act should be amended to enhance the effectiveness of local councils, and the Force Account mechanism. The number of local councillors should be reduced in order to reduce expenditure, and minimum educational qualifications for councillors should be set in order to raise the capacity of local council to analyze the policies they pass and documents they consider (e.g. budgets, strategic and work plans, reports etc.).
iv. KCCA Act 2010
The KCCA Act should be amended to enhance management efficiencies in, and improve planning, for the city. The Act provides for a Greater Kampala Metropolitan Area (GKMA) but this has not yet been given effect.
v. Regional Governments
Currently the country has numerous fragmented administrative units of varying sizes comprising: 1 Authority, 5 Authority divisions, 111 Districts, 22 Municipalities, 56 Municipal Divisions, 1,116 Sub-counties, 207 Town Boards, 174 Town Councils, 7,138 Parishes/ Wards and 66,036. This arrangement fragments resources, does not allow broader administration and planning, and has led to conflicts – such as those in Kasese.
While the Constitution has provisions for regional governments to be formed through arrangement between any two or more consenting districts, this is optional and is not a viable way in which to reform administration in the country. What is needed is a uniform system of regional governments that is acceptable country-wide, and which is preceded by careful study and country-wide consultation. Some of the current small administrative units will remain under the Office of the President.
vi. Force Account
Uganda’s National Construction Industry Policy, which was approved in 2010, is intended to develop the local road contraction industry so that local road constructors can compete favourably with foreign firms in road construction and maintenance in the country. In line with this policy a large number of local road construction companies, some of which were formed even before the policy came into being, have been engaged in road construction and routine and periodic maintenance, especially in local governments. However, even before the main provisions of the policy were implemented Government introduced Force Account in FY 2012/13 under which routine and periodic road maintenance has been made the exclusive preserve of local
15 governments, cutting out the local road construction companies that have been providing this service.
This inconsistency in government policy on the road sector has generated a lot of confusion. While use of Force Account is necessary in instances where it is more feasible for local governments to undertake routine and periodic road maintenance themselves, it is not in national interest to undermine development of national capacity in the road construction sector. Development of this capacity promotes national independence by enabling local firms to gain valuable experience and move up the construction ladder; it also supports national poverty reduction strategies by providing income to local people who are hired by the local construction firms.
District roads cannot be maintained by Force Account alone. First, only 29 districts out of a 111 in the country have district engineers; and only 11 municipalities out 22 have principal engineers (see Ministerial Policy Statement FY 2014/15, pp. 331-334). Secondly, the current local government structures were not designed for Force Account; Force Account is labour intensive and requires district works department staff to spend large amounts of time in the field, leaving little time to attend to office work. Third, the limited equipment availed to local governments is insufficient for them to cover all the roads in their jurisdiction in a single financial year. For example, Mukono district has 500 km of road but the district works department can only maintain 120 km by mechanized means annually due to limited equipment and personnel; Mayuge district has 428.5 km of district roads and 80 km of urban roads, of which only 200 km (manual labour maintenance) and 30 km (mechanized) can be maintained through Force Account;
similarly, the works department in Iganga district can only maintain 180 km of road out of the available 284 km annually through Force Account.
Force Account and private road contractors should operate side by side in road construction and maintenance at the local level, so that local governments can benefit from the advantages of both modes of road construction and maintenance.
Concerns have been raised in a number of local governments over the quality of road equipments procured from china. Many of the graders that were given out to districts, Municipalities and selected Town Councils are for light grading as opposed to road opening and construction. Despite the fact that these machines are running on a warrant the workshop managed by the Supplier of these machines are charging exorbitant amounts of money for servicing and regular mechanical works as a result of regular breakdown. The a full road equipment to implement a Force Account policy on road should be composed of the following machines; motor grader, vibre-roller, Wheel
16 loader, Bull dozer, Water Boozer, at least two dumper trucks, mobile Workshop van, Pick-up truck, excavator/ backhoe machine, hand roller and low bed truck for transporting machines. Currently local governments have been given one motor grader, a dumper truck and one pick up, hence contributing to the failures in the road works in local governments.
Furthermore, a number of districts have these machines packed because they lack operators and others have deserted their jobs due to non-payment. Many of these Operators are not on district pay rolls. As a Country we lack an institution for skilling technical operators of road machines, Heavy plant mechanics, road inspectors, road overseers, man Labour and road gang workers.
Local Government Accountability Framework
The accountability framework for the local government system has for too long been focusing on administrative compliance with centrally determined performance criteria and parameters. Local government have traditionally been assessed and evaluated in terms of their capacity to plan, budget, procure, manage finances and human resources, and produce final accounts within prescribed formats and time frames – as determined by the centre The institutions that play a key role in enforcing this technical and administrative accountability include Local Councils, the Ministry of Local Government, the Ministry of Public Service, line ministries, the Office of the Auditor General (OAG), the Inspector General of Government (IGG), and Parliament . Once these institutions are satisfied with the performance of local governments on the criteria described above, that is where matters stop. However, while we recognize that administrative compliance is essential, it is even more important to ensure achievement of results and impact from all the interventions so that there is a real change in people’s lives.
We note that Government has declared intent to focus on results and impact in democratization and local service delivery4. We hope this will not remain just a statement of intent, but will be given real effect so that Ugandans can obtain the full benefits of democratic decentralisation.
3.2 Key Outputs
The outputs for this Alternative Policy Statement are derived from the analysis above, as well as other significant areas that the Ministerial Policy Statement FY 2014/15 has not addressed directly. They are:
4 MoLG, Decentralization Policy Strategic Framework (DPSF) 2013-2023, p.21; and MoLG, Local Government Sector Strategic Plan Framework (LGSSP) 2013-2013 p.12
17 i. Local Government Financing
The percentage of transfers to local governments relative to the national budget is revised upwards to 38% of the national budget in line with the recommendation of the
The percentage of transfers to local governments relative to the national budget is revised upwards to 38% of the national budget in line with the recommendation of the