In a move that could trigger a stalemate,
the Senate Finance and Budget Committee
has proposed the allocation of Sh465 billion
to the devolved units in the next financial
year.
The proposal is Sh60 billion more than the
Sh405.1 billion proposed by the National
Treasury.
The two proposals differ from that of the
Council of Governors, which has demanded
an allocation of ShSh547 billion.
The committee has proposed an allocation
of Sh2.35 trillion to the national government,
down from Sh2.41 trillion.
In a report on the Budget Policy Statement
tabled on the floor, the committee led by
Mandera Senator Ali Roba cited the projected growth in the economy and billions
meant for devolved functions still being held
by the national government, for its recommendation.
“The ordinary revenue is projected to grow
by 10 per cent (an increase of Sh259 billion).
Despite this, the county equitable share for
FY 2025-26 is proposed to increase by only Sh17.7 billion,” the report states.
“This does
not align proportionally with the growth in
sharable revenue, thus limiting the abilities
of counties to adequately finance devolved
functions.”
The report goes on to say that the National Treasury did not provide the criteria
used to arrive at the proposed allocation of
Sh405.1 billion.
Over the years, the National Assembly
has sided with the Treasury on matters of
budgetary allocation to the counties.
This may be the case this year, implying
a looming major standoff.
In the current financial year, the two
Houses clashed after the Senate proposed
a higher allocation than that suggested by
the Treasury and the National Assembly.
While the Treasury and National Assembly
gave the devolved units Sh380 billion, the
Senate insisted on Sh400.1 billion.
Finally, the two parties settled on Sh387
billion after weeks of intense mediation.
According to the Senate committee, after deducting mandatory allocations as
provided for in the constitutions (non-discretionary), only Sh353.4 billion remains
for distribution between the two levels of
government.
This falls short of the proposed Sh405.1
billion county equitable share, highlighting a misalignment between the sharable revenue provided under Article 203(2) and
the government’s mandatory expenditure
commitments under Article 203(1).
In addition, the committee took issue with
the Intergovernmental Relations Technical
Committee for failing to ensure that resources are released to counties to perform
devolved functions.
Last December, IGRTC
identified, delineated and transferred several
functions to county governments.
However, the BPS 2025 does not outline
a framework for allocating and transferring
the necessary resources to support these
functions.
“The absence of clear policy direction contradicts the principle that resources should
follow functions, potentially hindering effective service delivery at county level,” it said.
