The government has released USD 116.7 million in block grants to local councils during the first eight months of this year, according to statistics published by the Ministry of Finance and Public Enterprises.
This year, the government has budgeted the largest-ever amount in the country’s history for block grants to local councils. A total of USD 155.6 million has been allocated in the 2026 budget for council grants.
According to the latest Weekly Fiscal Development Report published by the Ministry of Finance, USD 116.7 million was released as council grants during the first eight months of this year. This represents a 12 per cent increase compared with the USD 103.8 million released as block grants during the same period last year.
While USD 155.6 million has been allocated for council grants in this year’s budget, the government had budgeted USD 136.2 million for the same purpose in 2023, but spent an additional USD 518,800. The previous year, USD 142.7 million was released to councils. Meanwhile, USD 162.1 million has been allocated for council block grants in next year’s budget.
City councils receive the largest share of funding allocated to local councils, with Malé City Council receiving the largest budget among them. Since 2020, funding for councils has been provided as block grants under a fiscal formula based on government revenue.
The government has decided to introduce major changes to the system of financial assistance provided to local councils. With atoll councils now abolished, the government has previously said that the percentage of grants allocated to island and city councils will be increased.
The government has also decided to change the formula used to allocate council budgets, so that funding will be determined not only by population but also by the size of an island’s land area.
The government views the changes as a measure to strengthen the financial capacity of local councils and improve the implementation of development projects.