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Administrative costs at local self-governments to be reduced at 10%

December 15, 2016
 
Lado Bitchashvili, Shida Kartli

The 2017 draft budget of the local self-governments were amended after the Prime Minister of Georgia Giorgi Kvirikashvili announced initiative to reduce administrative costs of local authorities at 10%. It is one of the major priorities of the Prime Minister’s initiative – so called “larization”, which aims to reinforce the national currency. Considering that, the next year budget of Gori city was amended. Namely, the City Hall cut down the administrative costs at 10%.

Deputies of the Gori city council from opposition political parties declared after having read the draft budget that reduction of the administrative costs at 10% mostly affected the salaries. Council member from the Free Democrats Tamar Tedliashvili said the local authority spends 80% of its budget on public law legal entities and reducing the rest 20% at 10% will affect either salaries of employees or will cause personnel reductions in the city hall. 

“Cutting the next year administrative costs at 10% happened only in the public law legal entities of the city hall. However, the administrative costs were not reduced in the city hall and city council. The ministries started reduction of personnel so it is not excluded that the same will happen in local authorities too. Reduction of salary funds will result into firing employees; moreover, when 80% of the budget goes to the salaries in the public law legal entities,” Tamar Tedliashvili told humanrights.ge. 

The representatives of the financial service at the City Hall also confirmed that the next year budget was amended; however, they deny information that it will affect reduction of salaries or personnel.
“The administrative costs were cut off at 10% in the public law legal entities of both the City Hall and the City Council. The saved money will be spent on infrastructural projects. Reduction of salaries or personnel is not planned at this point,” head of the financial service at the Gori City Hall Dali Tlashadze said.
Economist Tamar Edisherashvili told humanrights.ge that “larization” initiative will not achieve its goal if it means only reduction of administrative costs at 10%.  

“We already have such uncontrolled situation that 10% will not be able to affect the problem. Until now we could calculate the devaluation process but now we do not get enough information why the rate of the national currency is falling. I have not heard any well-grounded answer from the government except blaming the journalists in creating panic. As for the 10%, it is interesting which concrete articles of the budget will be affected by it. However, it is good that they started reduction of administrative costs but it is too small in comparison to the overall burden of the budget,” Tamar Edisherashvili said.

Gori City Hall has 23 public law legal entities under its auspices. The city council members do not exclude that in 2017 the need of the entities will be re-considered and then optimized. Like in Gori City Hall, the Gori municipal board also started working on reducing the administrative costs at 10%.

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