How can local governments struggle with “envelope” salaries and why do they need it? – clarification of experts

Hromadas are constantly looking for sources to increase their revenues to provide high-quality and accessible services while developing. Issues of filling local budgets should of concern not only to the executive bodies of the local council and deputies, but also to the residents themselves. Everyone living in hromada uses the services provided by the budget institutions and establishments, and therefore has to understand that he/she cannot stand aside the issues of their financing. In addition, the local budget funds the implementation of social and economic development projects of the territory important for each residents.

But so far this is not the case. The problem of the country and every hromada is shadow employment and envelope salaries. In Ukraine, 3.7 million people work without labour relations registration. In 2017, 1 million people received the salary that was less than the minimum, i.e. almost 10% of the total number of employees (10,1 million people). As a result, local and state budgets lose billions of hryvnias, thus reducing opportunities for hromada development and improvement of the quality of services provided to the residents.

The experts of the Financial Monitoring Group of the Central Reform Office under MinRegion (with the support of the U-LEAD with Europe Programme and SKL International) drew attention to the norms adopted in 2017 that transferred powers in the sphere of labour legislation observance to local self-government.

The full version is available in Ukrainian – please click HERE

26.03.2018 - 10:05 | Views: 40321
How can local governments struggle with “envelope” salaries and why do they need it? – clarification of experts

Tags:

budget budget methodology Yanina Kazyuk Viktor Ventsel Ihor Herasymchuk

Source:

Read more:

25 February 2026

I_CAN запрошує громади на навчання як управляти публічними проєктами

I_CAN запрошує громади на навчання як управляти...

Участь можуть взяти представники органів місцевого самоврядування, обласних державних/військових адміністрацій,...

25 February 2026

24 February 2026

Інклюзивний та людиноцентричний підхід у плануванні евакуації та реагування на надзвичайні ситуації: коли система працює для всіх

Інклюзивний та людиноцентричний підхід у...

Людиноцентричний підхід та інклюзія — це вже не про додаткові заходи для окремих груп, а про проєктування систем...

24 February 2026

European LEADER approach for Ukrainian communities: Ministry and experts develop bottom-up rural development mechanism

European LEADER approach for Ukrainian...

Ukraine launched the systematic implementation of the European LEADER approach, which is expected to revitalise rural...