Ministries significantly cut expenses to fit into budget: LTV

Ministries have had to reduce their spending by €50 million to balance next year's budget. Latvian Television's De Facto, aired October 13, looked at the expenses which the ministries have decided to cut.

This year's state budget has been difficult to prepare because the financial situation is tight - the economy is not growing as fast as we would like, while demands for strict spending discipline are increasing. As a result, ministries have had to cut their spending by a total of €50 million. The Ministry of Finance said that this was mainly at the expense of goods and services in the institutions. However, an analysis by LTV's "de facto" program shows that it is not just about stationery, repairs, travel, or publicity. For a number of ministries, the cuts also mean rethinking how they carry out their functions.

At the end of September, private museums raised the alarm about the money taken away for next year. It turned out that the Ministry of Culture's basic budget no longer contained the money intended to support these museums - more than €242,000. For example, the memorial to the Jewish savior Žanis Lipke could have counted on part of it for the past ten years (support is now promised from the Latvian Culture Capital Foundation). Students were also unpleasantly surprised when it emerged that the "Studētgods" scholarships for families with three or more children and orphans would be affected by the €2.6 million cut. But the Emergency Medical Service (NMPD) is now looking at how it can do without an extra €1.6 million.

Liene Cipule, Director of the NMPD, says: "The initial set-up that came from the Ministry was under goods and services [...], but right from the first meeting we mentioned that this line, from which the cuts are planned, could not be considered. It ensures the continuity of our activities, our ability to provide a basic service to the population, so that means that under this heading are fuel, medicines, all energy, forms of labor, all the costs associated with our service to the population."

The service is therefore now analyzing how to plan the teams, their deployment and composition more rationally. This is not the only budget cut in the health sector.

Other services will reduce training and travel, public information activities, office supplies, and utilities. But the planned cut in the emergency services is the biggest - more than half of the total cut in the sector (€3.1 million).

Health Minister Hossams Abu Meri (New Unity) explains that this is because the NMPD also has the largest budget of the ministry and its subordinate bodies. However, he stresses that services are not being cut, "but each institution is evaluating programs that are not effective, not needed and so on."

The Ministry of Welfare has made a similar assessment of its programs, and has decided to cut funding for orphans after reaching legal age by more than a third, or €1.8 million, in its area of responsibility. This particular program provides, for example, for mentors to help them start living independently. The cuts are possible because local authorities are late in implementing the program and do not spend all the money anyway. However, the Association of Local Governments points out that this is a new option and the relevant Cabinet Regulations were only adopted in the summer.

Asked whether instead of a cut, municipalities should have been encouraged to be more proactive, Minister of Welfare Uldis Augulis (Greens and Farmers Union) said that this had been done.

Road repairs and maintenance will also be cut by almost €8 million, or 3%, in next year's budget. The Ministry of Transport plans to compensate for this with an increase in the vignette or road user charge. "So I hope that this overall, very slight, decrease will not have very negative consequences. But at the same time we are very well aware that the Latvian road budget should be, well, three times bigger," says Transport Minister Kaspars Briškens (Progressives).

The Ministry of Transport has the biggest cut of the total 50 million (a total of just over 8 million euros). This is followed by the Ministry of the Interior (almost €7 million), which, along with stationery, rent reimbursements, and other expenses, will also save money on uniforms.

The Ministry of Finance (a cut of €5.8 million) and its supervisory bodies will largely limit travel, seminars and room renovations. And although defense is the most favored area in next year's budget, it also had to find spending cuts (€5 million).

The area it oversees will see fewer repairs, fewer missions, and, among other things, fewer events for young people and fewer exhibitions at the War Museum.

Foreign Ministry and Health Ministry have had to cut their spending by over €3 million, Welfare, Culture, Education and Science, Justice, and Economics Ministry – by over €2 million, Climate and Energy Ministry and Agriculture Ministry by over €1 million, Smart Administration and Regional Development Ministry – by just under €1 million, the Cabinet of Ministers by half a million.

The measures listed by the ministries show that the overall cuts also go well beyond administrative and office maintenance measures. Finance Minister Arvils Ašeradens (New Unity) admits that this is natural, as this is the second time that ministries have had to look for ways to cut spending.

"Last year, there was a decision to cut the costs of all ministries by almost 140 million, and then the ministries went through their pantries and it was really based on cutting services and materials or goods. And the other 50 that came in, you could feel that it was quite difficult for the ministries because they were still reviewing their inventories. And then we added a formula that ministries can look in their programs to cut spending, then they can also cut programs," said Ašeradens.

These cuts apply not only for next year, but for the next three years. Moreover, according to the MoF, next year we will have to think about further cost-cutting measures, which would already mean structural reforms, such as merging institutions, reviewing functions, and similar changes.

 

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