Ukraine is undergoing a challenging period of transformation that requires efforts at the national and local levels. The 2014 decentralization reform aims to enhance the role of local authorities in addressing municipality issues and facilitating community development. However, for the reform to be implemented effectively, it is essential to allocate sufficient resources, including financial, human, and institutional resources.
The analysis of the budgets of the united territorial municipalities for 2022 and 2023 reveals several noteworthy trends. First, there was an increase in general fund revenues* without transfers (mainly own revenues, which include tax revenues) of local budgets in 2023 amounting to +11.0% (+UAH 43.8 billion) compared to 2022. Secondly, there is a need for more effective state regional and recovery policies ** in the areas where active hostilities are ongoing. It is essential to develop and implement mechanisms to support local municipalities in these regions.
In these circumstances, there is an urgent need for capacity building of Ukrainian municipalities and regions, particularly in collaboration with international partners who can provide financial, technical, and expert assistance. Some international organizations have already initiated pilot projects for municipalities, but there is still a significant need for further support. In particular, there is a shortage of skilled professionals capable of preparing grant and project documents that meet the rigorous standards set by international partners.
The objective of the survey of BDO in Ukraine was to ascertain the level of involvement of Ukrainian municipalities in collaboration with international partners in the context of recovery and sustainable development. Additionally, the survey aimed to identify the needs and challenges faced by these municipalities in this regard. The study was conducted via an online survey distributed to representatives of local communities.
The survey, which covered more than 28% of Ukrainian municipalities, revealed that the majority of them are actively involved in various grant programs.
Main results of the research
Municipalities in submitting grant applications based on the results of BDO in Ukraine’s study.
Based on the result of the study, BDO in Ukraine proposes the following measures for capacity building of Ukrainian municipalities and regions:
*Local Budget Analysis for 2023
**A comparative analysis of the financial capabilities of territorial municipalities based on indicators for 2021 and 2023
The analysis of the budgets of the united territorial municipalities for 2022 and 2023 reveals several noteworthy trends. First, there was an increase in general fund revenues* without transfers (mainly own revenues, which include tax revenues) of local budgets in 2023 amounting to +11.0% (+UAH 43.8 billion) compared to 2022. Secondly, there is a need for more effective state regional and recovery policies ** in the areas where active hostilities are ongoing. It is essential to develop and implement mechanisms to support local municipalities in these regions.
In these circumstances, there is an urgent need for capacity building of Ukrainian municipalities and regions, particularly in collaboration with international partners who can provide financial, technical, and expert assistance. Some international organizations have already initiated pilot projects for municipalities, but there is still a significant need for further support. In particular, there is a shortage of skilled professionals capable of preparing grant and project documents that meet the rigorous standards set by international partners.
Objective and methodology of the research
The objective of the survey of BDO in Ukraine was to ascertain the level of involvement of Ukrainian municipalities in collaboration with international partners in the context of recovery and sustainable development. Additionally, the survey aimed to identify the needs and challenges faced by these municipalities in this regard. The study was conducted via an online survey distributed to representatives of local communities.The survey, which covered more than 28% of Ukrainian municipalities, revealed that the majority of them are actively involved in various grant programs.
Main results of the research
- A total of 28% of Ukrainian municipalities from all regions of the country participated in our survey.
- The vast majority (95%) of respondents indicated a need for additional training on working with grant programs.
- Furthermore, 73% of respondents admitted that they lack the necessary specialists to work with grant programs.
- Our research indicates that 31% of Ukraine’s total population resides in the municipalities we surveyed.
Municipalities in submitting grant applications based on the results of BDO in Ukraine’s study.Conclusions and recommendations
Research by BDO in Ukraine showsthat Ukrainian municipalities are critical to the reconstruction and sustainable development of Ukraine. Effective engagement of international partners and implementation of the decentralization reform requires trained staff capable of overcoming challenges and effectively exploitingutilizing available opportunities. It is clear that there is a need for targeted training programs for local government officials in order to strengthen the capacity of municipalities for reconstruction and sustainable development initiatives.Based on the result of the study, BDO in Ukraine proposes the following measures for capacity building of Ukrainian municipalities and regions:
- Ensure that municipalities are well-informed about potential opportunities for collaboration with international partners. This should include details of the requirements, criteria and procedures for applying for grants.
- Develop and implement comprehensive training programs for local professionals that address the specifics of working with grant programs, project management, English translation, etc.
- Encourage the exchange of experience and best practices among communities and municipalities. This should include those that have a proven track record of success in working with international partners, as well as those that require support in this area.
- Facilitate dialogue and partnerships between local authorities, international organizations, the public sector, and business to collectively address challenges and foster municipality development.
*Local Budget Analysis for 2023
**A comparative analysis of the financial capabilities of territorial municipalities based on indicators for 2021 and 2023
