Balancing the books

Insights into the real-life budgeting challenges facing local government during and after the pandemic

Public finances around the world are facing strains like never before. But as central governments continue to battle with competing demands over healthcare and the economy, it is local governments that are facing increasingly difficult decisions.

Often bound by legal restraints imposed by central government, these local bodies are expected to deliver frontline services, while having to cope with massive reductions in local revenue brought about by lockdowns and economic slowdown.

It is an unenviable situation – on the one hand, local governments are expected to provide services as demanded by central government, but on the other hand they have to go back to these central governments to ask for the budget with which to do so. As such, a spotlight is now being shone on intergovernmental transfers, the process by which public finance is delivered to the right place at the right time.

Here, AB speaks to two finance professionals about their personal experiences and how they are managing to balance the local books.