Ministry says 'effective' reduction is 2.4 per cent

The Ministry of Justice and Home Affairs has put the effective budget cut to be imposed on local councils at 2.4 per cent instead of five per cent, saying the rest of the amount would consist of a withdrawal of the funds allocated for e-government projects.

The ministry was replying to criticism of the budget cut made by Labour spokesman Chris Cardona on Wednesday, who had described it as a "cold shower" for the councils, which would now be in for a hard time.

The five per cent cut was first revealed by the Association of Local Councils on Tuesday.

"Unjust and inappropriate" was how the ministry described Mr Cardona's comments yesterday.

It said the budget adjustment was part of the broader attempt to reduce the deficit, which was a national problem whose solution required everyone's participation.

In order to minimise the financial impact on councils, the adjustment in their allocation would come partly by withdrawing funds earmarked for e-government, while the rest would be reduced proportionately for each council.

"In this way, the effective reduction would be of 2.4 per cent," the ministry said.

It recalled how the Labour government had reduced council budgets to Lm5.8 million between 1997 and 1999, and contrasted it to the current budgetary allocation of Lm10.15 million, even after the adjustment.

The ministry also pointed out that 151 former shipyard employees had been posted to the local councils last year, while 100 Public Works Department workers had been assigned to the councils in 1999. The councils had not been asked to pay a cent for their services.