Parliament will have voted for the reform of local government before it disbands in April, ahead of May’s legislative election, Interior Minister Socratis Hasikos said on Friday.
“I am hopeful that the reform bill will be passed before the House disbands,” he told state radio.
Following months of consultations, the government has drafted and submitted to parliament three bills – one creating ‘district clusters’ to take over many of the responsibilities and administrative duties of local authorities, and the other two allowing for the administrative clustering of municipalities and local councils.
“The object here is to improve the services offered to the public at the lowest possible cost,” said head of the municipalities’ union and mayor of Famagusta Alexis Galanos.
According to Hasikos, cost-cutting will be achieved via reductions in staff, either through voluntary redundancy or transfer to the broader public sector, as well as operating expenses. “What we expect is 20 to 25 per cent cuts in cost,” the Interior minister said.
One stumbling block in the government’s proposal is the ambiguity over whether district cluster members will be elected or appointed. “We left this part open because there had been disagreement during the consultations,” Hasikos said. “In my view, there needs to be ‘indirect election’. That is, to elect municipal councils, which will then be represented proportionally in district clusters.”
According to House interior committee chairman Yiannos Lamaris, there are strong arguments in favour of Hasikos’ view. “For example, the Ayia Napa municipality correctly argues that, out of 39 municipalities, it ranks 7th in revenues, but dead last in population,” Lamaris said.
“What chance do they have of winning direct election to the clusters?”
Another contested issue is the debt local authorities have amassed over the years, which they are now unable to service, and their overall financial viability. “Municipalities have some debt that was incurred exclusively to serve their own needs, and some others that can be considered as going towards government projects,” Hasikos said.
“The finance ministry needs to sift through them, to see which fall under each category. But in any case, after the reform, municipalities will be able to repay their debt, on the one hand because their costs will drop substantially, and on the other, because they will have increased and sustainable revenues. The clusters will become licensing authorities, and municipalities will take over the collection of the Immovable Property tax.”
But this was met with scepticism by Lamaris. “We thought this tax was levied due to the economic crisis, and that it would be lifted at some point,” he said. “It seems that the government plans to leave it in place.” In any case, he added, the House committee will pick up the pace of its scheduled meetings, in order to be in a position to vote on the bills by April.
“There were six sessions planned until the end of April – we’ll make them twelve,” Lamaris said.
“It’s a lot of work, but given the good will shown in the initial session, discussion will help solve the remaining disagreements.”