REPUBLIC OF KENYA

PARLIAMENT OF KENYA

REVIEW OF 2015 BUDGET POLICY

STATEMENT (BPS)
TO STANDING COMMITTEE ON LABOUR AND
SOCIAL WELFARE

Parliamentary Budget
Officehttp://www.parliament.g
o.ke/pbo
Parliament Buildings

FEBRUARY, 2015

0 | Page

I.

BACKGROUND

(a)
Overview and purpose of the Budget Policy Statement
(BPS).
1) The Budget Policy Statement is published in accordance with Section 25 of
the Public Finance Management Act, 2012. In preparing the Budget Policy
Statement, the National Treasury is required to set out the broad strategic
priorities and policy goals that will guide the National government and
county governments in preparing their budgets both for the following
financial year and over the medium term. The National Treasury is
required to include the following in the Budget Policy Statement:(a) An assessment of the current state of the economy and the financial
outlook over the medium term, including macro-economic forecasts;
(b)The financial outlook with respect to Government revenues,
expenditures and borrowing for the next financial year and over the
medium term;
(c) The proposed expenditure limits for the national government, including
those of Parliament and the Judiciary and indicative transfers to county
governments;
(d) The fiscal responsibility principles and financial objectives over the
medium term including limits on total annual debt.
2) The second Schedule of the Standing Orders for the Senate assigns the
Standing Committee on Labour and Social Welfare the mandate to consider
matters relating to manpower & Human Resource Planning, gender,
Culture and Social Welfare, youth, National Youth Service, Childrens
welfare, National Heritage, betting, lotteries, sports Public Entertainment,
Public amenities and recreation.
3) The following spending agencies are therefore under the purview of the
Standing the Committee:

II.

Ministry of Labour Social Security and Services,

Ministry of Sports, Culture and Arts
National Youth Service
State Department for Planning- Gender and Youth Empowerment
Programme
HIGHLIGHTS OF THE BUDGET POLICY STATEMENT FOR 2015

4) The strategy for the Medium Term Budget Policy Statements (BPS) for
2015 is a re-emphasis on Economic Transformation for Shared Prosperity
in Kenya. The Budget Policy Statement for 2015 reviews the progress that
1 | Page

the Government has made in the five pillar thematic

transformative strategies spelt out in the BPS for 2014.

economic

5) The implementation of programs under these five pillars is expected to

raise efficiency and productivity in the economy, and in turn, accelerate and
sustain inclusive growth, create opportunities for productive jobs, and
secure livelihoods of all Kenyans. The BPS, therefore, reiterates the
Governments priority programs and structural reform measures to be
implemented in the Medium Term Expenditure Framework for 2015/16
2017/18.
6) The following are the five thematic pillars on economic transformative
strategies spelt out in the BPS
Table1: Thematic Pillars of Budget Policy 2015
Thematic Pillar
Pillar
I:
Creating
conducive
business
environment
for
employment
Pillar
II:
Agricultural
transformation and food security

Pillar III: Transport, Logistics,

Energy and Water for Inclusive
Growth
Pillar IV: Access to quality social
services
Pillar V: Further entrenching of
devolution for better service
delivery

Relevant Sector(s) and sub-sectors

Financial
Services
sector;
Governance; Security and Public
Administration
Agriculture
Rural
&
Urban
Development; Youth and Women;
Manufacturing; Sports Culture and
Heritage
Energy, Infrastructure & Water;
Road connectivity; Railway, Port
and Pipeline expansion
Health;
Education;
Social
Protection
Devolution and Inter-Governmental
Relations including support to
County Governments

7) The various Ministries, Departments and Agencies (MDAs) under the

purview of the Committee are expected to support the achievement of
Pillar II. Under this pillar, the Government builds on the on-going initiatives
(UWEZO Fund, Youth and Women Enterprise Development Funds) and
expands into new program areas aimed at skills development and access to
credit to enable this group be the dynamic drivers of growth and
employment creation.
8) The Government under Pillar II , indicates the use of a multi-facetted
approach aimed at equipping the youth and women with the requisite skills
and competencies; building their entrepreneurial capacities; investing in
2 | Page

labour intensive sectors to generate jobs; engaging them in national service

and building community and public assets. The National Youth Service will
continue to be positioned as the premiere institution for the national youth
transformation and re-socialisation agenda.
9) The Sports, Culture and Arts Sub-sector is covered in the second pillar
under the tourism, sports, culture and Arts objective.
10) Social protection is covered under the fourth thematic pillar. The
objective under this pillar is to cushion the people who may suffer welfare
shocks during the implementation of the economic transformation agenda.

III. Linking the BPS 2015 to the National Development Agenda

11) The following policy documents inform allocation of resources in the
Budget Policy Statement for 2015 to the various spending agencies: Kenya
Vision 2030; Second Medium Term Plan 2013-2017 and Strategic Plan for
Various Ministries Departments and Agencies (MDAs)
12) The priority programs and projects identified in the BPS of 2015 are in
line with the programs in the ministry in its strategic plan but more
importantly they are in line with the programs identified under the Medium
term plan II.
IV.

Resource allocation within the MTEF Period

a) National Government Ceilings

13) The proposed ceilings for the National Government for the period
2015/16 financial year is estimated at Kshs 1.4 trillion comprising of
Kshs. 1.35 trillion for national government, Kshs 23 billion for parliament
and Kshs 18 billion to Judiciary. The total allocation is set to increase to
Kshs. 1.5 trillion in 2016/2017 and Kshs 1.6 trillion in 2017/18.
Table 2: Summary of resource allocation 2015/16 2017/18 (Kshs
billions)
Details
2015/16
2016/17
2017/18
National Government
1,354.92
1,470.19
1,594.18
Parliament
22.97
23.66
24.70
Judiciary
17.96
18.96
20.76
Total
1,395.85
1,512.81
1,639.64
Source: National Treasury (BPS 2015)

3 | Page

14) Table 3 provides the projected baseline ceilings for the 2014 MTEF,
classified by sector
Table 3: Sector Ceilings for 2015/2016 (Kshs millions)
Sector

Recurren
t

Developmen
t

Total

a) Energy, Infrastructure &

ICT
b) Education
c) Public Administration and
International Relations
o/w Parliament
d) Governance Justice Law
and Order
o/w Judiciary
e) National Security
f) Agriculture, rural and
urban development
g) Health
h) Environment Protection,
Water and Natural
Resources
i) Social Protection, Culture
and Recreation
j) General Economic and
Commercial Affairs
Total

36,216

349,195

385,411

Proportion of
total
allocation
27.6%

291,373
123,423

35,986
94,276

327,359
217,699

23.5%
15.6%

20,340
125,663

2,607
17,557

22,947
143,220

1.6%
10.3%

12,596
114,072
16,430

5,366
48,807

17,962
114,072
65,237

1.3%
8.2%
4.7%

14,826
28,011

36,151
23,396

51,407
50,977

3.7%
3.7%

11,234

14,446

25,680

1.8%

6,841

7,954

14,795

1.1%

768,089

627,768

1,395,85
7

100%

As shown in table 3, the Social Protection, Culture and Recreation sector was
allocated 1.8% of the total allocation.
b) County Government Ceilings
15) The total funds to the county governments will amount to Kshs 283.7
billion of which Kshs. 258 billion is sharable revenue while the rest is
conditional grants. The table below indicates the breakdown of county
allocations:
Table 2: Allocation of national share of revenue to County
Governments
Item
Amount
%
of
2012/13
(Kshs bln) Audited revenue
(Kshs. 776.9 bln)
33%
County Equitable Share
258.0
Conditional allocations
25.7
Free Maternity Health Care
4.3
Leasing of Medical Equipment
4.5
Level 5 Hospitals
2.0
4 | Page

Allocation from fuel levy fund (15%)

Health Care Facilities Compensation
For Forgone User Fees
Conditional allocation loans and
grants
Total County Allocation

3.3
0.9
10.7
283.7

37%

c) Sector Resource Ceilings

16) Table 3 Provides a comparison of revised estimates for FY 2014/2015;
resource requirements for 2015/2016 and BPS ceilings for various votes
and Programmes under the purview of the Departmental Committee of
Labour and Social Welfare

Table 3: Summary of Expenditures by Programmes 2015/16- 2017/18

(Kshs. Millions)
Vote
Det
ails

Programme and Sub Programmes

Revis
ed
Estim
ates
2014/
15
Ministry of Labour, Social Security and Services
Promotion of Best Labour Practices

114

Manpower, Development Employment and

Productivity Management
General
Administration
Planning
and
Support Services
Social Development and Children Services
National Social Safety Net
Total

Resourc
e
Require
ment
2015/16

BPS
2015
Ceili
ngs
2015
/16

678

1,530

1,018

Projected
Ceilings
2016
/17

2017
/18

852

682

741

1,270

1,079

1,215

1,25
4

582

668

585

594

616

3,447

8,852

3,515

3.790

14,371

20,850

20,09
6

33,170

14,37
1
20,4
02

14,46
4
20,7
45

7,618

2,223

4,298

2,34
4

1,295

4,062

1,484

1,575

1,63
1

1,219

2,455

1,326

1,408

1,45
7

197

918

244

260

269

3,957

15,053

5,27
7

7,54
1

5,70
1

3,83
7
15,5
59
22,0
07

113
MINISTRY OF SPORTS, CULTURE AND ARTS
Sports
1,246
Culture
Arts
Library Services and Archives Management
General
Administration,
Support Services
Total

5 | Page

Planning

and

TOTAL SECTOR

24,05
3

48,223

25,6
80

28,2
95

27,7
08

17) The total budget proposed for the Social Protection, Culture and
Recreation in the BPS for FY 2015-16 for the various Programmes and subProgrammes amounts to Kshs. 25.68 billion of which Kshs. 11.23 billion
(44%) is for recurrent expenditure while Kshs. 14.44 billion (56%) is for
development expenditure. The proposed budget for the department is
higher than last years budget which was Kshs. 24.05 billion. In the year
2015/2016, the total resource requirements by the various Programmes as
per the sector reports is estimated at Kshs. 48.22 billion while the total
ceilings as per the BPS for 2015 is Kshs. 25.68 billion representing 1.8%
of the total allocation. The projected ceiling for the sector is projected to
rise to Kshs. 28.29 billion in the 2015/2016 FY whereas the FY 2016/2017
ceiling is to drop to Kshs. 27.70.

V.

Key Salient Issues

a) According to the Constitution Fourth Schedule Part 2 Paragraph 4,

Cultural activities, public entertainment and public amenities including: libraries, museums, sports and cultural activities and facilities are County
Functions. For example Programmes such as development and
management of sport facilities, library services whosemajor outputs
include constructing, equipping and upgrading library facilities, increasing
access to information materials.
b) One of the targets in the FY 2014/2015 was the rehabilitation/renovation
of KipchogeKeino Stadium and Nyayo National Stadium, and according to
the BPS (pg 73)this has been completed, however this same target has
been pushed to the FY 2015/2016. Rehabilitation of stadiums should also
be carried out by County Governments.
c) According to the 2014 BPS, as part of the scaling up investments towards
safety net programs, a graduation scheme which was to enable elderly
persons exit into lifelong ventures was to be developed. However, the same
scheme is under the targets in BPS 2015. There should be information on
the current position

6 | Page

d) One of the key outputs for the film production department in the FY
2014/2015 was the creation of the Kenya Film School. The film school was
to be 80% complete in the FY 2014/2015 and the remaining 20%
completed in the FY 2015/2016. However, the sector has not recorded the
completion of the Film School in the outputs for 2015/2016.
e) According to the sector report, the Occupational Safety and Health
Institute was constructed to 50.1% completion, however, it has not been
included in the target for either the 2014/2015 or the 2015/2016. What is
the position of this institute
f) The BPS in its current format lacks up to date data in respect to the extent
of achievement of planned activities as approved for the FY 2014-15. This
information, even when it is preliminary, say for the first Quarter and or
first half of the current financial year, would provide pointers as regard to
budget implementation challenges for the current budget.
g) A structure of collaboration between National and County Government on
activities being carried by both the levels of Government should be
created.

7 | Page

Programmes, Sub-Programmes and targets for the Medium-Term

Period
Programme/Su
b-Programme

Key Outputs

Key
Perform
ance
Indicat
ors

Programme 5:
Promotion of
Best Labour
Practices

Enforce
compliance with
labour laws

Sub-Programme
1.1 Promotion of
harmonious
industrial
relations

Process backlog of
Workmens
Compensation
cases
Labour
administration
audits and
advisory services

Sub-Programme
1.2: Regulation
of Trade Unions

Inspection of trade
unions books of
account

Sub- Programme
1.3: Provision of
occupational
safety and
Health Services

OSH committee
members and
other workers
trained on
Occupational
Safety & Health
issues

No. of
Inspectio
ns taken
to
enforce
labour
law
No. of
cases
processe
d
No. of
audits
and
advisory
services
No.
books of
account
inspecte
d
No. of
workers
trained
on
Occupati
onal
Safety &
Health
issues
No. of
OSH
inspectio
ns
carried
out
No. of
plants &
equipme
nt

OSH
audits/inspections
carried out in
workplaces for
compliance with
OSHA, 2007
Industrial Plants &
Equipment
examined

8 | Page

Baselin
e
2014/2
015
estimat
es
13,000

2015/2
016

2016/2
017

2017/2
018

13,500

14,000

15,000

1000

700

500

200

500

1000

1500

2000

465

470

475

475

12,500

17,000

25,000

30,000

7,500

10,000

12,500

15,000

15,000

18,000

23,000

30,000

examine
d
No. of
workers
examine
d

Workers in
60,000
65,000
73,000
82,000
hazardous
occupations
medically
examined
Programme 6: Manpower Development, Employment and Productivity Management
Outcome: Optimal human resource utilization and a competitive workforce
Sub Programme National
Strategy
Strateg
Strateg
Strategy
2.1: Human
Human
Paper
y Paper
y
impleme
Resource
Resource
implem
ntation
Planning and
Development
entation
Development
Strategy
developed
Sub
Students
No of
28,000
30,000
32,000
35,000
Programme2.2:
trained in
students
Provision of
industrial skills
trained
Industrial Skills
Trainees
No of
15,500
17,500
20,000
23,000
attached in
trainees
industry
attached in
industry
Sub
Model
No. of
3
3
2
2
Programme2.3:
employment
employmen
Employment
offices
t offices
Promotion
constructed
established
Services
Registered Job
No. of
20,000
26,000
33,800
43,940
seekers placed
registered
job seekers
placed in
gainful
employmen
t
Bilateral
No. of
2
2
2
2
Labour
Bilateral
agreements
labour
signed
agreements
with key
destination
countries
signed
Employment
No of
0
2
2
2
attach offices
employmen
established
t attach
offices
established
in key
labour
migration
destination
countries
Sub
Trained as
No. of
240
240
300
400
Programme2.4:
productivity
persons
Productivity
champions
trained
Promotion,
Productivity
No. of
10
15
15
15
Measurement
Practices
Ministries

9 | Page

and
Improvement
Programme 7:
Social
Development
and Children
Services.
Outcome:
Focused
community
mobilization and
protected
children
Sub
Programme: 3.1:
Social Welfare
and Vocational
Rehabilitation

mainstreamed
in public
Service

& Agencies
implementi
ng 5S &
Kaizen

Community
based
rehabilitation of
Persons With
Disabilities
Capacity for
PWDs
enhanced
through
training
Persons with
Albinism
provided with
sunscreen
lotions and
screened for
skin
cancer
PWDs provided
with assistive
& supportive
devices and
services

Number of
PWDs
rehabilitate
d

50

100

200

No. of
PWDs
trained in
VRCs

390

500

650

700

Number of
Persons
with
Albinism
supported

3000

3500

4500

5000

Number of
PWDs
provided
with
devices and
services
Number of
Scholarship
awarded to
PWDs
Number of
groups
registered

3000

4000

5000

5000

700

800

900

1000

35,000

50,000

60,000

70,000

Number of
leaders and
members
trained
No. of
OVCs
assisted

15,100

18,400

20,000

13,050

14,200

15,000

15,500

PWDs provided
with
scholarship
Sub
Programme: 3.2:
Community
Mobilization and
development

Sub
Programme 3.3:
Child

10 | P a g e

Self-help
groups and
community
based
organizations
registered
Group leaders
and members
capacity built
Complement
children
education

Community
Support

Sub
Programme 3.4:
Child
Rehabilitation
and Custody

support
provided
Foster care
services
provided
to children with
no families
Education and
skills
development
provided to
orphans, other
vulnerable
children and
young persons
Orphans and
Vulnerable
Children
(OVCs) outside
cash
transfer
programme
supported
Charitable
Children
Institutions
(CCIs)
registered

No. of
children
provided
with foster
care
No of
Children
trained

592

2,131

2,557

3,068

43,200

155,520

186,624

223,948

No of OVCs
supported

43,200

155,520

186,624

223,948

No. of CCIs
registered

125

150

180

210

1,100

1,250

1,400

1,850

2,120

2,400

310,000

460,000

660,000

47,200

77,000

117,000

360,000

510,000

685,000

Children reNo. of
900
integrated to
children recommunity
integrated
from children
institutions
Children in
No. of
1,700
Rehabilitation
children
Schools trained trained
in vocational
skills
Programme 8: National Safety Net Programme
Outcome: Improved livelihood for the vulnerable persons
Sub
Older Persons
No of
210,000
Programme 4.1: supported
beneficia
Social
ries
Assistance
Persons with
No of
27,200
severe disabilities
addition
supported
al
beneficia
ries
OVC supported
No of
260,000
addition
al
beneficia
ries

11 | P a g e

supporte
d
Programme 9: Policy, Planning and General Administrative Services-Ministry Labour
Subsector Outcome: Improve Service Delivery
Sub Resolution of
% of
67
70
75
85
Programme 9:
public complaints
complian
Policy, Planning
ce with
and General
Administrative
Services

12 | P a g e

13 | P a g e

Programme 1: Sports
Expected Outcome: Excellence in sports
performance
SP 1.1:
Stadia
% completion
Development
(Eldoret and
and
Mombasa)
Management Refurbished
% completion
of Sports
Nyayo
Infrastructur National
e and
Stadium
Competitions Rehabilitation
% completion
of
KipchogeKeino
Stadium
completed
Kenyan teams
No. of teams
participating
participating in
in
international
international
sports
sports events
International
No. of events
events hosted
hosted in Kenya
in Kenya
SP 1.2:
Bilateral
No. of Bilateral
Promotion
sports
activities
and
activities
Actualized
Regulation of undertaken
Sports
Inter-county
No. of county
Sports
championships
championships held
held
Anti-doping
No. of sports
initiatives
persons trained
undertaken
in anti-doping.
Sports dispute No. of appeals
tribunal
Arising from
operationalize
decisions of
d
Umbrella/
National
Sports
Organization
and Sports
Registrar
arbitrated
No. of other
cases referred
to the Tribunal
the parties
resolved
SP 1.3:
International
No. of pitches,
Sports
Sports
developed
Training and Academy
% completion of
Talent
hostels and
Development
classrooms

Baseline
2014/15

Target
2015/16

Target
2016/17

Target
2017/18

40

40

20

30

30

40

100

10

10

15

17

20

500

750

1,000

1,250

15

10

10

10

15

16

18

50

70

90

100

No. of officials
and technical
personnel
trained
No. of satellite
academies

500

1,000

1,500

2000

10

15

20

47

No. of talented
youths
identified and
trained
Programme 2: Culture and the Arts

300

500

1,000

2,000

14 | P a g e

Sports officials
and technical
personnel
trained.
Satellite
academy (ies)
established
Talented youth
identified and
trained.

ANNEX 1
LABOUR AND SOCIAL WELFARE
Resource requirements by Programmes and Sub-Programmes (KShs. Millions)
Programmes and Sub programmes
Estimates
Require
Allocatio Projected
FY2014/1
ment
n
Requirement
5
FY2015/ FY
16
2015/16
FY2016/17

Programme 1: Sports
SP.1.1: Development and
Management of Sports
Infrastructure and Competitions
SP 1.2: Promotion and
Regulation of Sports
SP 1.3: Sports Training and
Talent Development
Total
expenditure
programme 1
Programme 2: Culture and
the Arts
SP.2.1: Conservation of
Heritage

15 | P a g e

Finance Gap

FY2017/
18

804.66

3,486

560

3,660

3,843

81.62

2,617

211

2,680

2,755

360

1,514

450

1,590

1,669

1,246

7,617

1,221

7,930

8,267

687

2245

732

2336

2445

(2,926.00)
(2,406.00)
(1,064.00)
(6,396.00)

(1,513.00)

SP.2.2: Development and

Promotion of Culture, Music
and Dance
SP.2.3: Performing Arts and
Film Services
Total expenditure
programme 2
Programme 3: Promotion of
Library Services and
Archives Management
SP.3.1: Library Services
SP.3.2: Public Records and
Archives Management
Total expenditure
programme 3
Programme 4: General
Administration and Support
Services-Sports, Culture &
the Arts
SP.4.1:Planning and policy
development
SP.4.2: Administration support
services
Total expenditure
Programme 4

121.00

457

123

478

511

485.52

1358

628

1426

1497

1,293.5
2

4,060.
00

1,483.
00

4,239.55

4,453.
37

1,079.00

1,707

1,184

1,792

1,882

139.00

748

141

786

825

1,218.0
0

2,455.
00

1,325.
00

2,578.00

2,707.
00

(334.00)
(730.00)
(2,577.00)

(523.00)
(607.00)
(1,130.00)
-

196.00

918

244

967

1,018

196.00

918.00

244.00

967.00

1,018.
00

(674.00)

16,44
STATE DEPARTMENT
3,954
15,050 4,273
15,715
(10,777.00
5
TOTALS
)
Ministry of Labour, Social Security and Services
Programme 1: Promotion of Best Labour Practices
SP.1.1: Promotion of
299
801
313
801
879
harmonious industrial relations
(488)
SP1.2: Regulation of Trade
2
10
8
10.65
11.13
Unions
(2)
SP 1.3: Provision of
occupational safety and Health
374
718
530
863
826
(188)
Services
Total expenditure
1716.
675
1529
851
1674.83
programme 1
45
(678)
Programme 2: Manpower Development, Employment and Productivity Management
SP.2.1: Human Resource
59.64
188
85
Planning and Development
588.48
195.66 (103)
SP.2.2: Provision of Industrial
666.73
647.59 680.43
Skills
689.47
735.26 33
SP.2.3: Employment Promotion
260.63
347.97 282.21
Services
391.12
359.31 (66)
Productivity Promotion,
31.22
87.08
31.4
Measurement and Improvement
88.88
90.72
(56)
Total expenditure
1,018.2 1,270. 1,079.
1,380.
1,757.95
programme 2
2
96
37
95
(192)
Programme 3: Social Development and Children Services
SP.3.1: Social Welfare and
829.51
1,228
591
1,450
1,657
Vocational Rehabilitation
(636)

16 | P a g e

SP.3.2: Community Mobilization

and development
3.3: Child Community Support
3.4: Child Rehabilitation and
Custody
Total expenditure
programme 3
Programme 4: National
Safety Net Programme
4..1: Social Assistance
Total
expenditure
programme 4
programme
5:
General
Administration,
Planning
and Support Services
SP 1:General Administration,
Planning and Support Services
Total P4

STATE DEPARTMENT
TOTALS
SECTOR TOTALS

17 | P a g e

77.61

1,092

346

1,180

1,274

2,527.31

5,872

2,143

7,323

8,270

413.02

661

435

781

917

3,847.4
5

8,852.
78

3,514.
78

10,734.02

12,117
.60

14,371.
16
14,371.
16

20,850
.00

14371.
21
14,371
.21

582.08

668.85

584.9

684.89

701.32

582.08

668.85

584.90

684.89

701.32

14,953.
24

21,519

14,956

30,659

42,327

20,493.
91

33,171
.59

20,401
.26

44,825.40

57,542
.00

20,850

29,973.71
29,973.71

41625.
68
41,625
.68

(747)
(3,729)
(227)
(5,338)

(6,479)
(6,478.79)

(83.95)

(83.95)

(6,562.74)
(12,770.3
3)