Ad hoc committee to reassess municipal funding after summer

An ad hoc committee to determine state funding for municipalities will be established after the summer holidays, following an agreement between Interior Minister Constantinos Ioannou and the Union of Municipalities on Friday.

The new funding formula will take into account factors such as inflation and rising costs.

Ioannou met with a delegation from the union, led by its president Andreas Vyras, to assess progress since the introduction of local administration reforms roughly a year ago.

Vyras said local administration was better off since the reforms and Ioannou pointed out that the aim was to gradually adapt to the new environment and serve the public more effectively.

Ioannou mentioned solutions that have already been promoted, such as funding for municipalities that have lost around €12 million in revenue from the transfer of building permits to the district government organisations.

He also said that another €15 million would be earmarked for roads of primary importance.

Furthermore, projects already in the implementation phase will share €6 million so that the communities can complete them.

“Although the state grant has increased by €45 million, we have agreed with the president and members [of the union] that the funding needs to be reviewed,” Ioannou said. “We have repeatedly said that specifying a fixed amount in the law, without provisions for inflation or cost increases, is not sustainable.”

He added that, “therefore, an ad hoc committee will be appointed in September, with the participation of the finance ministry, so that by the end of October or early November the formula can be found and the necessary amendment to the law can be made to resolve this issue as well.”

Addressing the role of deputy mayors – positions created after smaller communities were incorporated into larger municipalities – Ioannou said their responsibilities had been finalised last week.

These duties include supervising cleanliness and infrastructure maintenance, managing parks and green spaces, addressing social welfare and cohesion issues, and attending meetings convened by the mayor.

However, he noted that the role of deputy mayors “needs to be re-evaluated.”

Vyras reiterated that the reforms had improved local governance and expressed satisfaction with the announced funding, particularly the €15 million designated for roadworks.

He added that reform is not a static process, but one to be continuously improved.