Report on Assessment of Village Development Committee Governance and the Use of the Block Grants Launched

10 Sep 2009

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The report, Assessment of Village Development Committee Governance and the Use of the Block Grants was launched today in Kathmandu by the Honourable Vice Chairman of the National Planning Commission, Dr. Yuba Raj Khatiwada. The report is expected to help guide the work of the Government, the VDCs, civil society and the donor organisations involved in supporting local governance and development.

“There is no debate that we should pump more resources to local governments, however the capacity of the local bodies should also be developed simultaneously,” said Dr. Khatiwada.

This is the first ever study on Village Development Committee Governance and the current use of block grants, undertaken across a representative sample of 25 districts and 202 VDCs covering all regions.

The report reveals that 43% of the 202 VDC buildings were destroyed in the armed conflict - and only 10% has been rebuilt since then. 62% of the VDC secretaries in the study’s high hills districts and 37% in the Midhills districts are assigned to look after more than one VDC.

The report states that 62% of the expenditure of block grants goes for physical infrastructure projects including road building (37%), electrification (12%), drinking water and sanitation (11%), and irrigation and agriculture (2.5%) and 17% on education (teachers’ salaries and school improvements).

According to the data 2006/2007 and 2007/2008, VDC block grants accounted for the majority of VDC revenue in almost all the 202 VDCs. On average, 77% of revenue of the high hills VDCs, 70% of the revenue of the Midhills VDCs and 53% of the Terai VDCs’ revenue came from VDC block grants. While it was only the Terai VDCs that generated significant amounts of revenue from internal sources (land revenue and other taxes and fees).

According to the study, the block grants were often not received on time by VDCs to fund their programmes due to late authorisation by the Ministry of Finance for District Development Committees to release the funds in the third trimester, delays by DDCs in submitting VDCs’ disbursement requests to district treasury office, late approval of plans and budgets by VDC Councils and non-submission of required documents by VDCs.

The report recommends performance based funding for VDCs and calls for a better coordination with line agencies. The report recommends more participation of women and disadvantaged groups in the planning and implementation of VDC projects. According to the study, so far only 16% women participate in VDC council meetings and 16% women and 17% disadvantaged group represent in user committees.

The study results are presented in a set of three reports

·         An assessment of the VDC block grant programme with a strategy for effective implementation

·         A compilation of 25 case studies in Nepali

·         And, User friendly version of the Government’s VDC block grant guidelines in Nepali

During the launch, UNDP Country Director Anne-Isabelle Degryse-Blateau stated, “Local Governments are also the means to bringing the citizens and the government closer to each other, and through feedback from the bottom, up for supporting the central government in better targeting policies and resources to local realities and needs.”

Commissioned by the Ministry of Local Development and the United Nations Development Programme, the study was undertaken by the Institute of Local Governance Studies (Inlogos) in association with the Centre for Empowerment Innovation and Development-Nepal (CEMID).