Finance ministry to monitor council block grant spending, president says
The 2025 budget, which totals MVR 56.6 billion, allocated MVR 1.4 billion in block grants to councils.
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President Mohamed Muizzu said on Thursday that the Ministry of Finance will take on a monitoring role to oversee how block grants allocated to local councils are utilised.
Speaking during his weekly ‘Rayyithunnaa Eku’ podcast on Thursday, the President said the decision comes in response to concerns about how some councils are using public funds, particularly block grants.
He said the aim is to ensure that the allocated funds are used in the public interest.
“The government has decided to introduce a system to ensure that the funds received by councils, including block grants, are spent in the best interest of the people, with the Finance Ministry having a role,” the President said.
He noted that some councils have used the funds for overseas trips, which he described as unrelated to service delivery.
“There are instances where block grant money is used for trips labelled as ‘experience visits’ to places such as Bangkok, with the entire council travelling. This does not provide any benefit to the people,” he said.
The President also said that some councils are holding onto block grant allocations without spending them, even as their responsibilities under the Decentralisation Act remain unfulfilled.
“Block grants are given to councils to carry out responsibilities assigned by law. Each council receives an allocation to their account to use for these purposes,” he said.
In addition to addressing the use of funds, the President outlined structural reforms planned for local councils. These include:
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The abolition of Provincial Councils
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Allocation of five councillors for islands with a population above 2,000, and three councillors for islands with fewer residents
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Maintaining the current number of councillors in city councils
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Increasing the reserved quota for women in councils from 33% to 40%
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Direct election of chairpersons for Women’s Development Committees in both urban and rural areas
The government has also moved to reduce the percentage of the national budget allocated as block grants to councils. While the Decentralisation Act mandates that 5% of the annual budget be allocated for this purpose, only 2% was included in the current budget.
The 2025 budget, which totals MVR 56.6 billion, allocated MVR 1.4 billion in block grants to councils. The government later adjusted the contingency budget to address the shortfall in line with the legislation.
