It is possible to improve local govt service delivery
May 18, 2009
UGANDA is hailed as one of the countries that have successfully implemented political and administrative decentralisation in Africa. To illustrate this success, Uganda’s experiences in local government evolution and management have become case studies n
By Kundhavi Kadiresan
UGANDA is hailed as one of the countries that have successfully implemented political and administrative decentralisation in Africa. To illustrate this success, Uganda’s experiences in local government evolution and management have become case studies not only for academic institutions, but also for other developing countries.
Uganda’s home-grown decentralisation policy provided for the devolution of powers and functions from the central government ministries and departments to local governments. This mandate is embedded in the Constitution. Today, the provision of basic services such as primary education, healthcare, water and sanitation, feeder roads and agriculture extension services is left to the local governments.
However, the recent policy reversals in fiscal decentralisation have raised questions about the capacity of local governments to effectively deliver services and ensure value for money in public expenditure. Some of the Government policies which have had pervasive impacts include the creation of new districts and abolition of graduated tax. The creation of new districts has put more expenditure pressures on local governments, taking away resources that would have been used to increase and improve service delivery.
It is estimated that wages for a new district are about sh1.2b per annum. Therefore, about sh25b is being spent on the 24 new districts created between 2004 and 2009. This huge increase in the wage bill, while maintaining the same budget, means less money is available for financing service delivery in the districts.
Although transfers to local governments increased from sh613.9b in 2001/02 to sh1,152b in 2008/09, about 65% of this money is spent on wages and salaries. With the current inflation and population growth, the amount of money spent on each individual for service delivery in the districts has dropped from about sh26,000 in 2002/03 to about sh22,700 by 2007/08. As a result, after paying wages and salaries, local governments cannot improve service delivery.
One question remains: Are we serious about service delivery in local governments? Whereas the decentralisation policy was supposed to improve service delivery, the creation of new districts has hampered it. The combined impact of abolition of graduated tax, user fees in schools and health facilities and delegation of national programmes (in agriculture, education) has eroded local governments’ capacity to finance services, leading to huge financing gaps.
Local governments’ sources of revenue have declined drastically. They have to depend on central government transfers which account for about 95% to 98% of their budgets. Transfers to local governments as a percentage of public expenditure has declined from around 47% in 2001/02 to about 22% in 2008/09. This means more resources are being retained at the centre.
Amid the challenges, there are several options which could be considered by the Government to improve the impact of public expenditure and service delivery at the local governments.
First, the Government should move away from implicit financing of service delivery (such as classrooms or health units) to explicit and fully-financing defined service delivery packages.
There is also a need to allow flexibility to managers at the service delivery units to use resources availed to them creatively to achieve the desired outcomes and hold them accountable.
Secondly, local governments should be allowed to use their resources within the menu of service delivery packages developed by sector ministries. This will give comfort to sectors that their targets will be met while at the same time minimising wastages. The procedures for disbursing donor funds to local governments must be harmonised to avoid leakages as experienced with the Global Fund to Fight Tuberculosis, HIV/AIDS and Malaria.
The third critical measure is to ensure that resources are directly given to the service delivery units by cutting on public administrative costs which are not directly linked to service delivery. For instance, the high safari day allowances given to central government staff, which in some cases are more than the monthly salaries of staff at service delivery units.
Finally, the Government should allow cost-sharing to promote downward accountability and ownership by citizens at the service delivery units.
The pricing of services should take into consideration the willingness and ability of the citizen to pay in addition to equity, poverty, ownership and accountability. If the pricing is right, cost-sharing can be the second best option to not paying for services and getting poor or no service at all. Community contribution in the water and sanitation sector is a good example of cost-sharing mechanisms that can be adopted.
Given the commitment of the Government to improve service delivery in rural areas, consensus can be reached on some of the above options without politicising them. Countries that have developed efficient local government systems have had to take hard policy decisions, which in most cases, were not politically popular. They made their populations understand that improving living condition requires hard work and frugal public expenditure management through cutting down on wastages.
Uganda must send the same messages to its population and also put its money where its mouth is. Service delivery in local governments can be improved and the central Government should rise to the occasion and make this happen.
The writer is the Uganda country manager of the World Bank office.
Additional information by
Onyach-Olaa
UGANDA is hailed as one of the countries that have successfully implemented political and administrative decentralisation in Africa. To illustrate this success, Uganda’s experiences in local government evolution and management have become case studies not only for academic institutions, but also for other developing countries.
Uganda’s home-grown decentralisation policy provided for the devolution of powers and functions from the central government ministries and departments to local governments. This mandate is embedded in the Constitution. Today, the provision of basic services such as primary education, healthcare, water and sanitation, feeder roads and agriculture extension services is left to the local governments.
However, the recent policy reversals in fiscal decentralisation have raised questions about the capacity of local governments to effectively deliver services and ensure value for money in public expenditure. Some of the Government policies which have had pervasive impacts include the creation of new districts and abolition of graduated tax. The creation of new districts has put more expenditure pressures on local governments, taking away resources that would have been used to increase and improve service delivery.
It is estimated that wages for a new district are about sh1.2b per annum. Therefore, about sh25b is being spent on the 24 new districts created between 2004 and 2009. This huge increase in the wage bill, while maintaining the same budget, means less money is available for financing service delivery in the districts.
Although transfers to local governments increased from sh613.9b in 2001/02 to sh1,152b in 2008/09, about 65% of this money is spent on wages and salaries. With the current inflation and population growth, the amount of money spent on each individual for service delivery in the districts has dropped from about sh26,000 in 2002/03 to about sh22,700 by 2007/08. As a result, after paying wages and salaries, local governments cannot improve service delivery.
One question remains: Are we serious about service delivery in local governments? Whereas the decentralisation policy was supposed to improve service delivery, the creation of new districts has hampered it. The combined impact of abolition of graduated tax, user fees in schools and health facilities and delegation of national programmes (in agriculture, education) has eroded local governments’ capacity to finance services, leading to huge financing gaps.
Local governments’ sources of revenue have declined drastically. They have to depend on central government transfers which account for about 95% to 98% of their budgets. Transfers to local governments as a percentage of public expenditure has declined from around 47% in 2001/02 to about 22% in 2008/09. This means more resources are being retained at the centre.
Amid the challenges, there are several options which could be considered by the Government to improve the impact of public expenditure and service delivery at the local governments.
First, the Government should move away from implicit financing of service delivery (such as classrooms or health units) to explicit and fully-financing defined service delivery packages.
There is also a need to allow flexibility to managers at the service delivery units to use resources availed to them creatively to achieve the desired outcomes and hold them accountable.
Secondly, local governments should be allowed to use their resources within the menu of service delivery packages developed by sector ministries. This will give comfort to sectors that their targets will be met while at the same time minimising wastages. The procedures for disbursing donor funds to local governments must be harmonised to avoid leakages as experienced with the Global Fund to Fight Tuberculosis, HIV/AIDS and Malaria.
The third critical measure is to ensure that resources are directly given to the service delivery units by cutting on public administrative costs which are not directly linked to service delivery. For instance, the high safari day allowances given to central government staff, which in some cases are more than the monthly salaries of staff at service delivery units.
Finally, the Government should allow cost-sharing to promote downward accountability and ownership by citizens at the service delivery units.
The pricing of services should take into consideration the willingness and ability of the citizen to pay in addition to equity, poverty, ownership and accountability. If the pricing is right, cost-sharing can be the second best option to not paying for services and getting poor or no service at all. Community contribution in the water and sanitation sector is a good example of cost-sharing mechanisms that can be adopted.
Given the commitment of the Government to improve service delivery in rural areas, consensus can be reached on some of the above options without politicising them. Countries that have developed efficient local government systems have had to take hard policy decisions, which in most cases, were not politically popular. They made their populations understand that improving living condition requires hard work and frugal public expenditure management through cutting down on wastages.
Uganda must send the same messages to its population and also put its money where its mouth is. Service delivery in local governments can be improved and the central Government should rise to the occasion and make this happen.
The writer is the Uganda country manager of the World Bank office.
Additional information by
Onyach-Olaa