The government has proposed amendments to the Decentralization Act to control the financial affairs of local councils. The first reading of the bill, submitted by the government through Ibrahim Hussain, Member for Fuvahmulah South Constituency, has been scheduled for tomorrow’s session of the People’s Majlis. Various government officials have been complaining in different forums that some councils are taking undue advantage of the significant leeway given by the law in terms of spending.
Among the amendments proposed by the government to the Decentralization Act to restrict the financial independence of councils is the requirement to follow guidelines set by the Ministry of Finance and LGA when conducting financial matters in the final year of the council’s term. The amendment states that if there is one year or less remaining until the end of the council’s term as specified in the Constitution, the council must not decide on certain matters unless they are in accordance with the guidelines set by the Ministry of Finance and LGA. These include:
1- Hiring permanent staff or contract staff for the council office or council administration.
2- Leasing or granting land, lagoon, and reef areas within the council’s jurisdiction.
According to the bill, these matters can only be carried out within the guidelines set by the government during the final period of the councils’ term. Another important aspect of the bill is that although Local Authority Companies in council areas are given the power to conduct economic activities, they must fulfill certain conditions. These include, as per the bill:
1- The economic activity or business should not be one that is already being conducted by a private party in the island or islands to which the Local Authority Company belongs.
2- The work should not be essential for the urban development of the island or islands.
3- The investment or capital amount of the work should not exceed 10 million rufiyaa.
According to the bill, rent cannot be charged for land or buildings leased to various parties by the government for providing basic services to the public. This includes rent for leased land, lagoon, and reef areas, as well as council buildings and property. The bill states that council bank accounts must be operated within guidelines set by the Ministry of Finance. It also states that if the Ministry of Finance requests a statement of a council’s bank account, that information must be provided to the ministry.
The MDP has expressed concern today about these amendments proposed by Member Ibrahim Hussain on behalf of the government. The party said that the bill would completely strip power from the system and therefore called on the government to withdraw the bill.
