The National Assembly has backed the Treasury’s plan to allocate Sh302 billion to counties for the next financial year.
The national government will be left with Sh1.09 trillion in the plan approved by the Liaison Committee, whose report on the Budget Policy Statement was approved by MPs on Thursday evening.
Treasury is now required by law to use the budget ceilings set by Parliament as it prepares the actual budget estimates, which should be presented to MPs by April 30, two months to the end of the financial year.
Parliament will get no more than Sh29.4 billion while the Judiciary will be allocated not more than Sh17.3 billion.
By siding with Treasury, the committee chaired by Deputy Speaker Joyce Laboso refused to heed the argument by the Commission on Revenue Allocation, which wants the counties given Sh377 billion.
The Liaison Committee said it was concerned about the need to introduce financial discipline in the counties and made its decision with the low revenue collections, which have forced the Treasury to put pressure on the revenue authority.
“The committee in particular noted the flagrant spending on non-essential items like non-essential travel and allowances. Equally, the committee was concerned about inflated expenditures and contracts and corruption which continues to bleed scarce resources,” said the committee in its report.
In the debate on the report in the afternoon, some ODM MPs asked Parliament to reduce the allocations to the President and Deputy President from the Sh5 billion they are slated to get.
“What projects does the Office of the President and the Deputy President undertake to get this money?” asked Deputy Minority Leader Jakoyo Midiwo.
South Mugirango MP Manson Nyamweya also backed the proposal.
The Liaison Committee said the decision to give the counties that much was also based on the growth of revenue. While the Treasury puts this at 7.9 per cent, CRA said it was 15.09 per cent.
The MPs said revenue allocations should also consider the amount counties raise through the various fees, levies and rates they charge. They raised Sh33 billion in the 2014/15 financial year.
“The total allocation to counties is equivalent to 32.2 per cent of the most recent audited revenue approved by the National Assembly.
“This allocation is therefore realistic given the expected revenue collection, expected economic growth and ongoing fiscal austerity policies being implemented by the government,” said the committee.
The committee also asked the Treasury to speed up the setting up of the manner through which the Equalisation Fund will be spent.
The fund has been allocated Sh6 billion in the next budget and the creation of the board that will coordinate its spending by the various ministries has been pending for some time.