The financial capacity of communities in 2027, inter-budgetary relations, and the accessibility of services for children and families were the focus of the dialogue “Draft State Budget 2027: Community resources and investment in children”. The event was held at the end of September by the All-Ukrainian Association of Amalgamated Territorial Communities, with the support of the UNICEF Office in Ukraine.

Representatives of communities in Odesa and Mykolaiv regions, central and regional executive authorities, experts, and partner organisations attended the event.

According to the forecast, the total financial resources of local self-government in 2027 will amount to UAH 1.056 trillion, which is 20.9% more than this year. The own revenues of communities are expected to rise to UAH 707.2 billion, an increase of 11.8%.

At the same time, the dialogue participants drew attention to the uneven financial situation across communities. According to the Ministry of Finance, revenue to the general fund of local budgets in a number of regions has increased by approximately 17–20%, whereas in border regions the increase stands at around 12%. Communities near the front line and in border areas are losing businesses and their workforce, and consequently, a portion of their revenue.

‘When assessing the total volume of financial support for local self-government, it is important to take into account not only the transfers that go directly to the budgets of communities, but also the resources that pass through the state and regional budgets but are in fact channelled towards the needs of communities,’ said Oleksandr Moroz, Director of the Department of Inter-budgetary Relations and Local Budgets at the Ministry of Finance.

As at 1 September, local budget balances amounted to approximately UAH 165 billion. The discussion also covered the horizontal equalisation mechanism, realistic planning of local budget revenue, and new approaches to prioritising expenditure.

Tetiana Arseniuk, Deputy Executive Director of the Association of Amalgamated Territorial Communities of Ukraine and coordinator of the “Local Budgets and Finance” platform, pointed out that in 2027, communities’ own revenues are forecast to grow by 11.8%, whereas the volume of transfers is expected to increase by 44.9%. Under these circumstances, almost a third of a community’s financial resources will come from transfers, which increases the dependence of local budgets on subventions and subsidies.

A separate topic of discussion was the ability of communities to independently set funding priorities. Oleksandr Korinnyi, Head of the All-Ukrainian Association of Amalgamated Territorial Communities and Mayor of Novoukrainka, emphasised:

‘Behind every budget figure lie specific services: safe schools and nurseries, accessible healthcare, social support, food, protective shelter, opportunities for children’s development, and support for families. Therefore, the financial capacity of communities and people’s well-being cannot be considered in isolation. In the context of war, children’s safety takes on particular importance, and it is our shared responsibility to create the appropriate conditions. However, communities need to have sufficient financial capacity to perform their duties.’

Vitalii Bezgin, Minister for Communities, Territories and Internally Displaced Persons of Ukraine, focused in his address on the need to maintain a capable local self-government and ensure sufficient resources for communities.

‘Accessibility will be one of our priorities, not only in terms of the legislative framework but also in terms of the implementation of practical projects on the ground, for which we already have a separate budget line in the draft State Budget for 2027. I urge communities to prepare and be competitive in this process,’ the Minister emphasised.

Representatives of central government bodies also spoke of the need for a clear delineation between own and delegated powers among levels of public authority. If the state delegates a specific power to a community, the resources required for its proper exercise are also to be allocated at the same time.

The participants named inter-municipal cooperation as one of the practical tools for delivering services to communities with different human and financial capacities. It enables the pooling of resources to provide social, educational and other public services, maintain shared infrastructure, and implement projects.

A significant part of the discussion was devoted to budgeting focused on the needs of children, young people, and families. The discussion centred on the need to take into account, when planning budgets, current data on the number of children, their age, place of residence, needs, and the availability of services.

Anastasiia Sofiienko, Deputy Minister of Education and Science, informed that the draft State Budget 2027 allocates UAH 19.4 billion for school nutrition. In 2026, the amount of the relevant subsidies will be UAH 14.4 billion.

Funding for all hours in the curriculum has also been reinstated in the formula for calculating the education subsidy. This should increase the resources that communities receive to pay teachers’ salaries. For pre-school and after-school education institutions, provision has been made for a phased transition to the new pay system, taking into account the financial capabilities of communities.

The participants highlighted that expenditure on children and young people should be assessed not only in terms of the amount of funding, but also in terms of outcomes: how accessible, high-quality, and safe the services are. This is particularly important for children from frontline and border communities, internally displaced children, children with disabilities, children deprived of parental care, and children from families in difficult life circumstances.

Based on the outcomes of the dialogue, representatives of Odesa and Mykolaiv regional branches of the Association of Amalgamated Territorial Communities drafted a final resolution. The Association will use the proposals developed in its ongoing dialogue with state authorities about the draft State Budget 2027, the financial support for local self-government, and the creation of conditions in communities to protect the rights and meet the needs of children, young people, and families.