Abolish Block Grants, But Fix the Budget Trap

The block grant system must be cancelled. Councils are not universities to receive research grants; they should function exactly like a ministry, with a fixed budget that can only be reviewed annually. They must learn to manage their budget like any other government institution, not as separate governments that imagine projects whenever they want and spend money on whatever they want. The principle is sound, but the reform will fail unless the central government also accepts its own responsibility. Consider what happened when the government approved a councillor salary hike without providing a single additional rufiyaa to pay for it. The Feevaku council, faced with this unforeseen statutory cost, had to divert approximately 250,000 rufiyaa from its development allocation, suspending planned programmes. The Finance Ministry offered no offset. This is precisely the sort of mid-year shock that a rigid, ministry-style budget cannot absorb, and it reveals the fatal flaw in the proposal as it stands. A ministry does not have the freedom to reallocate funds at will, it is true, but a ministry also does not have to absorb salary increases imposed from above without compensation. If councils are to operate under the same discipline as ministries, the central government must also extend the same protection: when it creates a financial obligation, it must provide the funds to meet it. Otherwise, the block grant is simply replaced by an even more rigid trap, and councils will be forced to suspend core services every time the state changes the rules. The answer is not to keep the block grant as a slush fund for pet projects. The answer is to abolish it and replace it with a fixed, annually reviewed budget, while simultaneously creating a statutory mechanism for the central government to cover unavoidable cost increases that arise during the year. Councils shall learn to manage their budgets like any other government institution, but the state must learn to be a responsible parent, not a capricious one. Only then will discipline replace chaos, and only then will the reform actually work. Councils can operate under ministerial budget discipline only if the central government also shoulders unforeseeable cost increases; otherwise, the reform simply relabels the same strain.