Country Reports on Local Government Systems:

Sri Lanka

Sri Lanka
______________________________________________

1. BRIEF DESCRIPTION OF THE COUNTRY

1.1 Socio economic profile

Sri Lanka, an island located in the Indian Ocean, has a land area of 62,705 sq.
km. (excluding inland waters). Sri Lanka’s maritime waters extend up to 489,000 sq.
km. The central mountainous region, which rises to an elevation of 2,524 metres, is
the source of the country’s major rivers.

As indicated in Table 1, the population is a little over 19 million with a

population growth rate of 1.5 per cent. The Western Province has the highest
population size and density. This is followed by the Central and the Southern
Provinces. The North Central Province has the highest land area, followed by the
Eastern and Uva Provinces. According to the 2002 Central Bank statistics, the
sectoral population is 72.2 per cent rural, 21.5 per cent urban and 6.3 per cent
estate.

During the last 40 to 50 years, the worldwide urban migration has also been
observed in Sri Lanka. This trend has degraded the city environment and threatened
economic efficiency, social equity and urban sustainability. These consequences
are experienced in their worst form in Colombo and its suburbs, where settlements
have degraded to a very low level. Since most of these settlements are illegally
occupied, even local authorities and the previously mentioned stakeholder
organisations have not been able to upgrade these urban low-income settlements.

As depicted in Table 2, the highest contribution towards the economy is from

the Western province followed by the North Western Province. In 2001, for the first
time since Independence, a negative growth of 1.5 percent of GDP was recorded, as
shown in Table 3. A positive growth was experienced in the year 2002. Inflation rose
at 14.2 percent. It has declined to 9.6 percent by 2002.

The national debt, which was contained at Rs. 550 billion in 1994 (Rs. 49.98
per US$), increased dramatically to Rs. 1450 billion by 2001. At present, debt
equals 105 per cent of GDP. In 2002, debt interest servicing alone has cost the
Government Rs. 118 billion, and Sri Lanka had to repay loan instalments of Rs. 38
billion in foreign debt and Rs. 130 billion in domestic debt. Debt service payments
amounted to Rs. 285 billion, compared to Government revenues of Rs. 262 billion.
Unless this mountain of public debt is reduced, there will be no resources for
development activities. This is arguably the most intractable of the economic
management problems that the government has to grapple with.

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Table 1: Population and land area by province and population density

Population (Mid-Year) ’000 (a) 19,007

Land Area (Excluding Inland Waters) Sq. Km. 62,705
Population and Land Area by Provinces
Province Population (a) Land Area Density of
’000 (Sq. km.) Population
Western 5,412 3,593 1,506
Central 2,443 5,575 438
Southern 2,299 5,383 427
North-Western 2,174 7,506 290
Sabaragamuwa 1,804 4,921 367
Northern 1,094 8,290 132
Eastern 1,476 9,361 158
Uva 1,188 8,335 143
North-Central 1,117 9,741 115
Total 19,007 62,705 303

Composition of Population (1981 Census) (b)

By Ethnicity per cent By Religion %
Sinhalese 74.0 Buddhists 69.3
Sri Lankan Tamils 12.6 Hindus 15.5
Indian Tamils 5.5 Muslims 7.5
Moors 7.1 Christians 7.6
Others 0.8 Others 0.1

By Sector %
Rural 72.2 Urban 21.5 Estate 6.3

(a) Provisional
(b) Data refer to population census-1981 as comparative data based on
Census of Population and Housing-2001 are yet to be estimated.
(c) Calculated by the Central Bank using mid-year population estimates
Received from DCS
(d) 3rd quarter 2002

Substantial changes have taken place in the structure of employment

opportunities open to the rural labour force. The number working in modern industry
has expanded, mainly in the free trade zones or other urban/semi-urban industrial
areas. In addition, as a result of the deliberate policy, adopted by the government
after 1989 of spatial dispersion of factory industry, the local rural factory work has
also increased. Another significant aspect of today’s rural life is that many of
villagers work abroad – a phenomenon that developed after the oil shocks of the
1970s.

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Table 2: Provincial GDP (at current factor cost prices)

shares and growth (a)

Province / Year 1996 1997 1998 1999 2000 2001 GDP2001 Per Capita
GDP(Rs) 2001
Western (WP) 43.7 44.3 45.3 48.7 49.3 47.3 589,478 109,953
N. Western (NWP) 11.3 12.1 12.0 10.4 10.4 10.9 135,494 62,795
Central (CP) 10.0 10.5 9.8 9.2 9.4 9.8 121,414 50,275
Southern (SP) 9.0 8.8 9.3 9.6 9.4 9.9 123,180 54,095
Sabaragamuwa 9.0 7.6 6.7 6.4 6.7 6.3 78,596 43,958
(SaP)
Eastern (EP) 4.8 5.0 5.5 5.0 4.5 5.0 63,404 44,780
Uva (UP) 5.1 5.0 4.9 4.1 3.9 4.5 56,469 48,231
N. Central (NCP) 4.6 4.0 3.6 4.1 3.9 3.8 47,080 42,579
Northern (NP) 2.4 2.8 2.9 2.5 2.2 2.5 30,582 29,384
National GDP 100 100 100 100 100 100 1,245,703 66,500

Region SHARES Growth (b) 1996 - 2001

Rate

H 43.7 44.3 45.3 48.7 49.6 47.3 14.2

M 39.4 39.0 37.8 35.5 35.9 36.8 10.9

L 16.9 16.7 16.9 15.8 14.5 15.9 11.2

National GDP 100 100 100 100 100 100 12.4

(a) Provisional (b) Average Annual Growth Rate
H – High Contributor (WP) M – Medium Contributor (SP,SaP,CP,NWP) L - Low Contributor
(UP,EP,NCP,NP)

Source: Central Bank of Sri Lanka

The female contribution to national income is clearly becoming more diversified,

and in many respects more significant. The pattern of employment in export-
oriented manufacturing industry, particularly in free trade zones, is preponderantly
biased in favour of women. In addition, women constitute the bulk of Sri Lankan
workers employed overseas, contributing significantly to both their family incomes
and to the country’s foreign exchange earnings.

There was a substantial decline in the crude death rate (6.0 per thousand), and
the infant mortality rate (13.4 per 1,000 live births) for 1999. Life expectancy at birth
for the same year was 72 years. With widespread access to educational facilities, the
literacy rate in 2000 was 93.4 per cent for men and 89.4 percent for women. These
indicators are comparable to those in many advanced societies. From the
commencement of UNDP’s publication of the Human Development Report, Sri
Lanka has been placed among ‘middle human development’ countries.

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Table 3: Growth of real GDP (per cent) and inflation

1996 1997 1998 1999 2000 2001 2002 (a)

GDP growth (%)
6.3 4.7 4.3 6.0 -1.5 4.0
Primary sector (mining,
agriculture etc.) % growth (4.2) 3.04 1.9 4.5 2.00
Manufacturing sector
% growth 6.5 9.1 6.3 4.4 9.2
Services sector
% growth 6.2 7.0 5.2 4.2 6.9
Construction sector
% growth 3.4 5.4 7.1 4.8 4.8
Inflation
15.9 9.6 9.4 4.7 6.2 14.2 9.6

a) Provisional
b) Per cent change of annual average Consumer Price Index. (1990 = 100)

Source: Sri Lanka Socio Economic Data 2003, Central Bank of Sri Lanka June 2003.

Table 4: Gross National Product (market prices)

1990 1996 1997 1998 1999 2000

Gross National Product (GNP) 7,973 13,701 14,917 15,511 15,490 16,286
(Mn. US$)

GNP Per Capita (a), US$ 469 747 804 826 813 841

a) Provisional

Source: Sri Lanka Socio Economic Data 2003, Central Bank of Sri Lanka June 2003.

Absolute poverty has continued to prevail as a major social problem in Sri

Lanka. At the census of 2001, the population of 18 districts lying outside the war
torn areas was enumerated as 16.6 million by the Department of Census and
Statistics. Out of this population, one-fifth to one-third of the population was
considered poor depending on whether one uses a lower (Rs. 860 per person per
month) or upper (Rs. 1032 per person per month) poverty line. In Sri Lanka, poverty
is predominantly a rural phenomenon, with 87 per cent of the poor living in the rural
sector. Owing to inadequate income, shelter, sanitation, water and proper waste
disposal facilities, both the urban and rural poor face numerous health hazards.

The most recent policy initiative on poverty alleviation finds expression in Sri
Lanka: A Framework for Poverty Reduction prepared by the External Resources
Department (2000). It proposes a course of action in which the poor increasingly
take advantage of opportunities created in the private sector led market economy.
Three major components are highlighted to constitute to the strategic foundation for
poverty reduction: (a) creating opportunities for the poor to participate in economic

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Sri Lanka

growth; (b) strengthening the social protection system; and (c) empowering the poor
and strengthening governance.

The cease-fire agreement signed with the LTTE in 2002 is a historical

milestone for Sri Lanka. Since the agreement, confidence-building measures have
encouraged the free movement of people and goods throughout the country, and
revived inter-province economic activity. Reconstruction work in the affected areas
is moving ahead rapidly with donor assistance. The tourist trade is rapidly regaining
its earlier prosperity. Defence payments have simultaneously been reduced, paving
the way for diverting more funds to development related activities.

The economy is expected to record a growth rate of about 5.5 per cent in 2003,
reflecting recovery in all major sectors. Improved business confidence, the removal
of war risk charges, the discontinuation of power cuts, and progress on the peace
front contribute to these improvements.

1.2 Political and administrative structure

The legal and administrative structure of Sri Lanka is based on its republican
constitution. The Executive President of the Republic is elected by the people and
holds office for a six-year term. The Parliament consists of 196 members elected by
the people and 29 members from the national lists. The President appoints the
Prime Minister and the Cabinet of Ministers and is the Head of the Cabinet (Chart 1).

The country is divided into nine provinces for administrative purposes.

However, at present North and East are merged as North/East Provincial Council.
Power has been devolved to the provinces with the unit of devolution being the
Provincial Council comprised of members elected by the votes of each province. A
Governor appointed by the President heads the province, while a Chief Minister
appointed from the elected members, heads the Provincial Council.

The establishment of the Provincial Councils (PCs) in 1988 was perceived as

constituting a radical departure from the centralised form of governance Sri Lanka
had practised since emerging from colonial rule. With the establishment of the PCs
the administration in the country was decentralised. The assignment of
responsibilities between the center and the provinces is defined by legislative,
executive, fiscal and administrative arrangements. They define the scope and extent
of the assignment of responsibilities to provinces and what has been retained by the
center.

Under the 13th Amendment to the Constitution, passed on 14 November 1987,

subjects and functions in the purview of central and provincial governments have
been identified in three scheduled lists. The Central Government retains exclusive
responsibility only for national policy List 11 (the Reserved List). List 1 is the
Provincial Council List. List 111 (Concurrent List) provides the Central Government
to share responsibility with the Provincial Councils).

Subjects and functions assigned to PCs (List 1) comprise public services

bearing directly on the daily life of the people in the province. This subject
assignment makes the PC the provider of basic services to the community. The

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responsibilities assigned to PCs have been classified as follows. (Gunawardena,

1991):

1. Public Order, Administration and Provincial Affairs;

2. Provincial Planning;
3. Provincial Finance;
4. Economic and Social Services;
5. Human Resources Development and Community Services;
6. Infrastructure, Urban Development and Environment;
7. Trade, Commerce and Food Distribution;
8. Culture and Sports;
9. Regulation of Provincial Activities; and
10. Miscellaneous Services.

The central government can set national policies on all subjects and functions
and has the power to approve legislation on the concurrent list of subject areas that
have been listed as provincial subjects in the scheduled list. Its functions include:

• National policy formulation;

• Designing inter-governmental transfers;
• Establishing and managing centre-province relations;
• Cadre and staffing; and
• The administration of “home affairs”.

The Provincial Governor of each province is responsible for the execution of

policies and statutes made by the provincial council on devolved subjects, through
the Board of Provincial Ministers (Chart 2). A provincial public service has been
constituted for each province to support the executive. The operations, supervision
of management, including the power to dissolve a local authority, come under the
purview of a Provincial Council. Central government’s involvement is limited to
policies on the reform, structure and constitution of local authorities and the national
policy making related to local government.

Although members of Parliament are proportionally elected on a district basis,

there is no House or Assembly at the district level. Out of the three electoral
memberships, i.e. Parliament, Provincial Council and local authority, the first is the
most powerful. Although, the term of office for the President is six years, for
Parliament and Provincial Councils it is five years each. For Local Authorities it is
four years with the provision that the Minister could advance the term of office by 12
months or extends it by 12 months.

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Chart 1: Structure of the government administration

PARLIAMENT PRESIDENT

CABINET

MINISTRIES
DEPTS. & CORPS.

GOVERNOR PROVINCIAL
COUNCILS

CHIEF MINISTER
BOARD OF
MINISTERS

CHIEF
SECRETARY

PROVINCIAL SECRETARIAT
SECRETARIES
SUBJECT HEADS

GOVERNMENT
AGENT

DIVISIONAL M U P
SECRETARY C C S

GRAMA
NILADHARI

COMMUNITY
ORGANISATIONS

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Chart 2: Organization of provincial council administration

The 17th Amendment to the Constitution in 2001 established a Constitutional

Council and five independent commissions; Public Service Commission, Police
Commission, Election Commission, Judicial Service Commission and Media

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Commission. These five commissions are expected to strengthen democracy in the

country and guarantee the independence of public service and media.

2. EVOLUTION OF LOCAL GOVERNMENT

Local government has a long history, dating back to the fourth century. The
oldest chronicle of Sri Lanka, Mahawansa (sixth century) mentions that the Nagara
Guttike (city Mayor) carried out local administration. Village level organizations
called Gam Sabhas functioned under village leaders who enjoyed powers to
administer local affairs and also perform judicial functions such as dealing with petty
offences and reconciling disputes. What is understood, as local government today is
an expanded version of such responsibilities, operating under the democratic system
of governance. However, certain functions such as judicial and agrarian services
have been taken over by other authorities.

The Gam Sabhas were mainly agriculture oriented and were not directed by the
centre. The British abolished the Gam Sabhas in 1818 withdrawing the self-
government element in Sri Lankan villages. However, the British resurrected it in
some way by the introduction of the Irrigation Ordinance in 1856, which entrusted the
village communities to take certain actions related to irrigation and cultivation. The
local government system in Sri Lanka was greatly influenced by the British during
their colonial rule, particularly during the later part of the British rule (form 1865 to
1948). Important landmarks in local governance under the British can be summarily
stated as follows:

• Establishment of municipal councils for the cities of Colombo and Kandy in

1865 and for Galle in 1866;
• Reconstitution of village committees by the Village Committees Ordinance in
1871;
• Establishment of sanitary boards for small towns in 1892;
• Establishment of urban councils in 1939; and
• Establishment of town councils in 1946.

At the time of independence in 1948 the system of local authorities in operation

were municipal councils, town councils and village committees. The village
committees functioned as legal entities served by village leaders on a voluntary
basis. During the period 1940–1980 the term village committee was changed to
village council. These new councils did not last long due to the inherent defects in
the system that distanced the people from the administration. This necessitated the
establishment of Pradeshiya Sabhas in 1987 under the provision of Pradeshya
Sabha Act No.15 of 1987. The establishment of 256 Pradeshiya Sabhas in 1987
marked an extensive attempt of decentralization and the DDCs were abolished.

In 1981, town councils and village councils were abolished and the powers and
functions were transferred to newly constituted District Development Councils
(DDCs) established under the provision of District Development Councils Act No.35
of 1980.

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Sri Lanka

Under the constitutional amendment it was expected that the provinces would
prepare and pass Statutes to legally transfer the official activities of the local
authorities. However, this has not taken place; except for a few statutes passed on
the management of local authorities, other major activities are still governed under
the above-mentioned laws.

The observed functions of the local authorities focus more on environmental

management and social services. Roads, sanitation along thoroughfares, health,
water supply, solid waste management, sewerage etc are the main functions of local
authorities since their very inception. Other development activities such as
education, agriculture, employment generation and poverty alleviation are not
directly considered under these laws.

At present some of these functions have been handed over to some other
government owned boards, corporations or statutory authorities, making the local
authorities dependant on those institutions to serve their electorates. The National
Water Supply and Drainage Board, the Ceylon Electricity Board, the Common
Amenities Board, the National Housing Development Authority and the Urban
Development Authority are some of the organisations owned and managed by the
Central Government, but serving the electorate directly or through local authorities.
Thus the Ceylon Electricity Board has taken over electricity supply, NWSD has
developed and administered water supply schemes and UDA and NHD have
developed housing schemes for the urban poor.

Since these organisation belong to the central government, their policies,

operational systems and management are undertaken with government interests in
mind. Therefore, greater influence is wielded on such organisations by the elected
representatives of Parliament than the Mayor or Chairperson of a local authority.

3. MAIN FEATURES AND CHARACTERISTICS OF

LOCAL GOVERNMENT

3.1 Local government categories and hierarchies

The organizational structure of local governance consists of three legal

instruments: the Municipal Council Ordinance, the Urban Council Ordinance and the
Pradeshiya Sabhas Act. At present there are 18 Municpal Councils, 37 Urban
Councils, and 256 Pradeshiya Sabhas. The number of local authorities in the eight
provinces and the twenty-five districts is given in Table 5 below.

Table 5: Distribution of local authorities in Sri Lanka (2003)

Number of Local Authorities

Province District
MC UC PS Districts Province
Western Colombo 4 3 5 12 45
Gampaha 2 5 12 19

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Number of Local Authorities

Province District
MC UC PS Districts Province

Kalutara - 4 10 14
Kandy 1 4 17 22
Central Matale 1 - 11 12 42
Nuwara Eliya 1 2 5 8
Galle 1 2 15 18
Southern Matara 1 1 12 14 43
Hambantota - 2 9 11
Kurunegala 1 1 18 20
North Western 32
Puttalam - 2 10 12
Anuradhapura 1 - 18 19
North Central 25
Polonnaruwa - - 6 6
Badulla 1 2 14 17
Uva 27
Monaragala - - 10 10
Ratnapura 1 1 13 15
Sabaragamuva 26
Kegalle - 1 10 11
Jaffna 1 3 12 16
Mannar - - 4 4
Vauniya - 1 4 5
Mullativu - - 4 4
North Eastern 71
Kilinochchi - - 3 3
Batticaloa 1 1 10 12
Ampara 1 1 14 16
Trincomalee - 1 10 11

Total 18 37 256 311 311

Source: Sri Lanka Institute of Local Governance

The central government decides on the structure of a local authority and

demarcates it after a public hearing where the electorate and other parties and
organisations are invited to participate. Local governments used to be divided into
wards. Wards have been discontinued under the new proportional system.

To create, reconstitute or upgrade a local authority, the Minister in charge of

local government appoints a committee that is generally headed by an officer of the
rank of a Provincial Commissioner of Local Government or a divisional secretary.
Members study the implications of establishing a local authority in a given area.

In the case of reconstitution or upgrading of a local authority, the committee

looks into the possibilities of carving out areas form other adjoining local authorities.
Reconstitution is entirely the preserve of the Minister of Local Government. However,
it is generally based on policy. The committee also recommends the number of

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elected members the local authority should have. On receipt of the committee’s
report, the Minster decides whether to reject or accept the recommendations of the
committee. While normally committee recommendations have been accepted in
total, there have been cases where these were changed due to political
considerations, particularly when geographical areas had to be carved our form
adjacent local authorities. However, even in such cases special attention is given to
the organisational and financial sustainability of the proposed local authority.

Local authority elections are held under the Local Authority Elections
Ordinance. The district secretaries conduct elections in their capacity as Election
Officers in the districts. Their duties are limited to the preparation and certification of
electoral registers and the conduct of the poll. The Commissioner of Elections
gazettes the list of candidates and gives all necessary directions to the Election
Officers on the conduct of the poll. The Commission of Election also decides the
number of seats each party will get based on the election results. One important
feature in local authority elections is the regulation that 40 percent of the candidates
on the nomination list should be between 18 and 35 years of age, which gives an
opportunity for youth representation in local authority administration. There is no
such regulation to provide a quota for women’s participation.

Respective political parties or independent groups nominate the Chairperson or

Mayors, which does not appear to be a very democratic process. However, more
democratic means of elections of heads of local authorities has created problems of
local administration. One of the main issues arising has been the relationship
between the Chairperson/Mayors with the local authorities. There have been cases
where councillors revolted against such relationship with the heads of local
authorities, causing embarrassment to political parties. On the other hand, some
argue that over-dependence of local authority heads on councillors would create
situations that are more damaging to their general administration.

The composition of a local council is based on the total population of a local

authority area and not on a ward basis. This has certain advantages as well as
disadvantages. It permits councillors to pay attention to the local authority as a
whole rather than to a ward that consists only of few settlements with a small
population. When the ward-based election system was in vogue, the services
rendered to infrastructure constructed were generally of a small size due to the fact
that these needs were generally limited to a smaller geographical area. Instead of
such limitations, the councillors are now in a position to look at a broader spectrum
and a larger geographical area, since they have to look up to and depend on a large
population for victory at elections.

Since the electoral system is proportional, it permits an elector to give his/her

preference to a political party or an independent group. Elected members have no
allegiance to the micro level. Moreover, under the previous composition minorities,
including small political parties, were finding it difficult to be elected due to limitations
in the number of electors in each ward. Under the present electoral system minorities
can become a block vote and gain a place in the council. Such opportunity makes
the minority councillors concentrate on their block vote by developing the areas
occupied by such minorities, whether on political party, religion, race, caste or
occupational basis. Hence, minorities have gained from the new electoral system.

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Notwithstanding these facts, there are clear-cut disadvantages inherent in the

system. One is that the number of councillors is not so large to ensure service to a
large number in a geographically vast area, especially in case of Pradeshiya Sabhas
(rural local authorities), creating under representation.

Lack of representation of poverty-stricken populations in the composition of

local authority membership has affected even the composition for committees,
especially that of the municipal councils. The law provides of appointment of various
committees to assist the administration of local authorities. Since political input has
been uppermost in the minds of the politicians in power at municipal councils,
adequate representation has not been the case in sectional committees, even
though the opposition groups or members deserved representation. Therefore, the
difficulties faced by the poorer groups have increased. In case of the Pradeshiya
Sabhas the law provides for the appointment of committees. These could include
residents of the areas. While appointed, the opportunities given to the political
opponents and the disadvantaged groups were minimal.

3.2 Local government structures and functions

The administrative structure is similar in all local authorities, although the
designations are different. The municipal councils are headed by Mayors with
deputy Mayors and members of the councils making policy and policy
implementation decisions. The Mayor is Chief Executive and is assisted by the
municipal Commissioner, who is a senior public official. There are several
departments under the administration of a Municipal Commissioner, depending on
size, complexity, staff availability and resources of the municipality. For instance, the
Colombo municipality has several departments under the Commissioner, headed by
a secretary, a chief engineer, an internal auditor, a veterinary surgeon, a chief
medical officer and an assessor with sub units in each department. This structure is
not in place in many other local authorities, although there are some counterparts to
those officials in other municipal councils.

Section 40 of the Municipal Council Ordinance lists the general powers of

municipal councils. These are generally routine administrative powers, such as
recruitment of officials, acquisition of assets, licensing, instituting legal actions,
budgeting and supplementary budgeting. Since municipal councils have to be
careful about unauthorised constructions in their area of authority, one important
power given to the municipal councils is the power to demolish unauthorised
buildings. Municipal councils provide public infrastructure services and are
authorised to acquire lands for public purposes. The general duties of the municipal
councils are more important for the well being of the public. At the same time these
duties also serve as performance indicators of municipal councils, assisting the
public to consider election of members for a second time.

The duties as stated in Section 46 of the Municipal Council Ordinance are as

follows:

• Maintaining and clearing of all public streets and open spaces vested in the
council or committed to its management;

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• Enforcing the proper maintenance, cleaning and repairing of all private

streets; Supervising and providing growth and development by planning and
widening of streets, reservation of open spaces and execution of public
improvements;
• Abating all nuisance;
• Establishing and maintaining public utilities for the welfare, comfort and
convenience of the public; and
• Promoting public health, welfare and the development of sanitation and
amenities.

Law gives extensive powers to local authorities to meet their responsibilities.

This includes making it mandatory for the police to help local authorities in enforcing
their regulations. A majority of municipal council functions, such as health and
sanitation activities, solid waste disposal, greening of the areas under their control
and development of parks, could all be categorised as environmental activities. By
law, provision has been made to appoint a committee of councillors for the purpose
of preparing schemes regarding maintenance of residential premises, and for making
recommendations on the payment of incentives to residents who maintain high
standards of hygiene. This is an opportunity to prove the capacity to create
participation of the public in maintaining higher standards of environment. However,
a disheartening feature is that often such schemes or incentives are not made
available to the public. Although laws have given vast amounts of power to create a
sustainable and habitable environment in urban areas, it is found that the
development processes have not been that effectively executed.

Another important power in the hands of Municipal Councils is market

facilitation and regulation in their areas of authority. While municipal councils can in
theory facilitate economic development using these powers, most municipal councils
have not been able to take advantage of these regulations or have failed to facilitate
or regulate economic activities. For example, the powers given to medical and health
officers to inspect important places of business, especially hotels and restaurants are
not exercised regularly, causing hardships to the consumers. The municipal
magistrate system that permits trying offenders under 30 different laws could be
used to maintain order, discipline, health and the environment.

In addition, municipal councils are permitted to borrow funds from financial

markets for development activities, acquisition of land, plants, machinery and
equipment. The auditor general audits the activities of local authorities.

The powers of urban councils are enumerated in a separate ordinance: the

Urban Council Ordinance. Their general powers and duties are not very different
from the municipal councils. The duties of urban councils, as given in section 35 of
the ordinance, are almost similar to the corresponding section of the Municipal
Council Ordinance. The main functions of the urban councils, like those of the
municipal councils are environmental in nature. Besides, urban councils, like
municipal councils, are authorised to maintain and regulate markets. The vested
assets of urban councils show some similarity to municipal councils, since parks,
open spaces, gardens, canals, public markets and public buildings within the urban
council areas become the property of urban councils.

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Pradeshiya Sabhas enjoy powers similar to municipal and urban councils with
regards to routine administration of their areas. In Pradeshiya Sabhas the focus is
on thoroughfares, public health and market places and, thus, the focus on services
and environment has not changed. However, due to lack of finances these functions
and services have not been sufficiently undertaken in many Pradeshiya Sabhas.

When these ordinances were promulgated, the central government was to

supervise the functioning of local authorities. However, with the 13th Amendment to
the Constitution this power has been transferred to the provincial councils. Similarly,
processes of inquiry and oversight of local authorities have been transferred to
provincial councils. These powers have been granted provincial councils to check
the excesses of individual municipal and urban councils, where Mayors and
Chairperson considered themselves above the law as elected representatives of the
people. However, certain recent judgements show that deliberate harassment has
been caused to some of the Chief Executive Officers, Chairperson and Mayors that
might have been based on political conflicts, questioning the objectivity of the
provincial council members. Political parties have taken a keen interest in local
authority elections, injecting politics in the decision making of the development
process. One negative impact of such behaviour is the neglect of development
needs of a local authority that is in hands of the people who do not have the same
political affiliation. This is particularly of concern in Pradeshiya Sabhas and has
degraded the standards at the local level. Although such criticisms can be levelled
against local authority administrations, on the whole the concept to think and act
locally at the local authority level has not been shelved.

3.3 Local government finances

The financial position of local authorities is not sound enough to plan services for
a larger geographical area as this involves large investments. This has become
more apparent in urban local authorities where the urban poor, living in shanties and
squatter settlements, do not pay any rates. Therefore, in some local authorities, they
were not given the same service compared to the ratepayers. In an electoral
system that requires coverage of a larger area, more money is needed to contest
elections and hence poor elements could not be adequately represented. For
example, in the Colombo area 42 percent of the total population live in under-served
or low-income settlements, but they are not represented accordingly.

There is at present excessive financial dependence on, and influence of, the
centre in terms of local government finances. Control over resources and the manner
of their disbursement indicates the distribution of power between the centre and
provinces. The system of annual assessment of provincial needs combined with the
narrow revenue base of the provinces except for the Western Province imposes
serious budgetary and financial management constraints. Thus regular funding
delays and shortfalls further exacerbates negative effects of dependence on the
centre.

An important aspect of financial dependence on the centre is also the

concomitant implicit financial powers imposing financial obligations on the provinces.
The centre has regularly taken decisions in respect of devolved subjects that have
financial ramifications for the provinces and then fail to provide the necessary funds

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to meet the additional financial obligations. The most serious incidence of such
imposition of financial obligations is in the area of devolved health services.

Chart 3: Financing decentralization-government transfers

to the sub-national level

President Parliament

Finance Commission

Annual Budget
------------------------
Ministry of F & P

Ministry of HA, PC & LG Line Ministries

Provincial Councils
Statutory Agencies

District Secretariat

Provincial Projects Local Authorities Divisional Secretariat Sector Projects

Grants
Allocations
Project Finance

As shown in Chart 3, funds for recurrent budgets to the local authorities are
channelled through the Provincial Councils. Most of the local authorities do not get
these, or any other development funds, in a similar timely manner. The Provincial
Council, under which the local authority functions, often has difficult obtaining these
funds even when the funds belong to them. If the Provincial Council and the local
authority are under different political parties the problem of transfer is compounded.
Before the formation of the Provincial Councils, the funds were directly transferred by
the Central government to the local authorities.

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Sources of revenue

The main sources of revenue for the local authorities are:

• Rates; • Court fines;

• Entertainment tax; • Fees;
• Trade/Business taxes; • Warrant costs; and
• Rents; • Other income (stamp duty comes
• Licenses; under this item); and Government
grants.

The source of income will vary from council to council. If the council is more
urbanised, the main source of revenue will be property rates varying from 15 to 25
per cent. If less urbanised, the main source will of revenue will be rents on council
lands and commercial stalls, at rates also ranging between 15 and 25 per cent. The
government grant is the main source of income, which brings in about 50 per cent of
the total revenue. It is used for the reimbursement of salaries. The collection of rates
brings in the second largest local revenue for urban local authorities such as
Colombo and Kandy Municipalities. For rural local authorities, rents bring in the
second highest revenue. These are from rentals from sites by conducting weekly
fairs and public markets and from commercial buildings owned by the local
authorities.

Under the Urban Development and Low Income Housing Project, funded by the
Asian Development Bank, the Sri Lanka Institute of Local Governance conducted a
study in 2001 to identify the main sources of self-generated revenues of 17
participating local authorities (see Table 6). The three main sources were property
rates, rents and trade licences/trade taxes/business taxes. Therefore, an important
revenue-generating method in municipal councils has been the regular revision of
rates. Generally, rates are revised every five years. Complaint have been made
that some local authorities do not revise the rates by the given time periods. Another
observation is that some central politicians try to influence the rate revision process
for their political gain, irrespective of the effects on local authorities’ finance. Local
authorities are also faced with problems in trying to collect rates, and recovery of
rates varies between 20 to 90 per cent. The officials attribute many reasons to this.
Political pressure by the elected councillors is cited as one of the main reasons. Sri
Lanka Institute of Local Governance will be targeting this area for further studies
during the course of this year in order to improve the situation.

Though the government has recognised the raising of funds through the issue
of bonds, no Municipality in Sri Lanka has yet tried this. Similarly, public–private
partnership have been minimal. There has been a general lack of interest to get
involved with the private sector by the officials, mainly due to the fear of being found
accused of impropriety on some transactions. However, this is gradually being offset
with programmes being conducted by Institute of Local Governance, highlighting that
so long as the process is transparent, public-private partnership should be
encouraged to provide a better service to the public. Colombo Municipality is leading
the way by promoting this concept and most of the street cleaning and garbage
collection is at present being handled by the private sector.

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Expenditure allocations

According to the Municipal Councils Ordinance, Section 185, each Municipal

Council shall establish a fund for its general financial purposes. Any expenditure to
be incurred by the local authority has to be from this fund.

Table 6: Total budgeted recurrent revenues of participating

urban local authorities (ULA) (2002)

Total
Total rates Total rents Total trade
recurrent
Name of ULA revenue 2002 (%) revenue 2002 (%) licence (%)
revenue 2002
budget budget revenue
budget
Kandy MC 460,666,000 69,560,000 15.09 4,920,400 10.68 9,479,000 2.06
Kurunegala MC 105,605,500 8,600,000 8.143 18,976,900 17.97 1,631,700 1.54
Galle MC 134,451,680 33,216,000 24.7 10,554,000 7.85 4,461,000 3.32
Negombo MC 122,134,900 22,550,000 18.46 8,576,500 7.02 14,119,050 11.58
Gompola UC 32,940,150 7,100,000 21.55 4,900,000 14.88 634,150 1.93
Kegalle UC 34,225,010 2,592,850 7.57 7,942,760 2321 405,800 1.19
Hatton Dickoya UC 31,387,085 2,152,300 6.77 14,846,455 47.3 3,179,000 10.13
Seethawakapura UC 76,458,292 2,800,000 3.66 5,786,100 7.57 262,600 0.34
Anuradhapura UC 80,101,600 9,476,700 11.83 9,450,700 11.8 5,206,500 6.5
Bandarawela UC 32,596,600 2,200,000 6.74 10,227,300 31.38 464,900 1.43
Puttalam UC 28,474,375 5,000,000 17.55 1,430,000 5.02 400,000 1.4
PS – Hingurakgoda 17,364,430 665,519 3.83 2,737,129 15.76 800,000 4.61
PS – Akuressa 17,145,000 550,000 3.2 2,720,000 15.86 807,000 4.71
PS –
17,131,500 555,000 3.23 2,833,000 16.54 922,000 5.38
Tissamaharama
PS – Embilipitiya 21,142,800 163,100 7.81 4,648,000 21.98 1,461,000 6.91
PS – Ambalantota 17,824,700 1,020,600 5.72 5,136,300 28.82 753,000 4.22
PS – Hikkaduwa 32,257,100 3,980,000 12.33 2,926,400 9.07 1,229,800 3.81

Source: Urban Development Low Income Housing Programme Report-SLILG 2002

According to section 190 of the Ordinance, at each general meeting of a

Municipal Council the Mayor shall submit to the Council a statement of receipts and
disbursements on account of the Municipal Fund from the close of the previous year
up to the close of the month preceding that in which the meeting takes place. Such
a statement, together with the minutes of the proceedings of the meeting, shall be
forwarded forthwith to the Commissioner of Local Government, and shall be
published in the Gazette.

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The actual expenditure account of a local authority is illustrated in Table 7

below:

Table 7: Actual expenditure of Kurunegala M.C local authority (2000)

No Type of expenditure Estimated (%) Actual (%)

expenditure expenditure

Recurrent expenditure
1 Salaries & allowances 4,893,950.00 54.36 4780643.13 67.81
2 Travelling expenses 92,000.00 1.02 76128.21 1.08
3 Supplies & equipments 439,000.00 4.88 314322.75 4.46
4 Capital assets, repairs & maintenance 505,000.00 5.61 200766.10 2.85
5 Transport and services needed 285,500.00 3.17 198838.10 2.82
6 New development projects - 0.00
7 Acquisitions - 0.00
8 Interest payments, dividend, grants - 0.00
9 Grants, contribution & subsidies 77,450.00 0.86 92140.31 1.31
10 Pensions & gratuities 110,000.00 1.22 81073.14 1.15
Sub Total 6,402,900.00 71.12 5783674.61 82.04

Capital Expenditure

11 Capital expenditure 2,600,000.00 28.88 1308312.38 18.56

12 Loans repayments 0.00 0.00
Sub Total 2,600,000.00 28.88 1308312.38 18.56

Total 9,002,900.00 100.00 7050224.43 100.00

According to the Municipal Councils Ordinance, the Mayor of each Municipal

Council shall, after consultation with the several standing committees, on a date to
be fixed by him/her in each year, submit to the Council a budget containing an
estimate of the available Municipal income and details of the proposed expenditure
for the ensuing financial year.

Every budget of the Municipal Council shall be circulated among the

Councillors at least seven days prior to the date referred to in section 211; and be
open to inspection at the Municipal office or at such other place as the Mayor may
determine, for seven days prior to the said date and notice thereof shall be given by
the Mayor in the Gazette and in two or more of the newspapers circulating with in the
Municipality. Every Municipal Council shall finally consider the budget at a special
meeting to be called in the last month of the financial year.

The Mayor may at any time prepare a supplementary budget and lay it before
the Council. Every supplementary budget shall be circulated among the Councillors
at least seven days prior to the meeting of the Council before which it is laid; and be
open to public inspection at the Municipal office or at such other place as the Mayor
may determine for seven days prior to the said meeting an notice thereof shall be

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given by the Mayor in the Gazette and in two or more of the newspapers circulating
within the Municipality.

It shall be in the discretion of the Municipal Council to pass, modify, or reject all
or any of the items in any budget or supplementary budget or to add any item
thereto. According to section 215.A., if the Municipal Council modifies or rejects all or
any of the items in any budget or supplementary budget, or adds any item thereto,
and the Mayor does not agree with any such decision of the Council, s/he shall re-
submit the budget or supplementary budget to the Council for future consideration.
Where the Council does not pass a budget or supplementary budget within two
weeks after it is resubmitted, notwithstanding that it has not been passed by the
Council, be deemed to be the duly adopted budget or supplementary budget of the
Council.

The Mayor may, in case of necessity, during any year reduce or increase the
expenditure under any head of the budget or of any supplementary budget, or may
transfer the moneys assigned under one head of expenditure to another head. This
is provided that the total amount of expenditure sanctioned by the budget or by any
supplementary budget passed by the Council is not exceeded. The authority for
expenditure conveyed by any budget or supplementary budget passed by a
Municipal Council, or deemed to be the duly adopted budget or supplementary
budget of such Council, shall expire at the end of the financial year to which such a
budget relates.

It is observed that all urban local authorities are dependent on the government
grants disbursed by the Finance Commission through the provincial councils. If a 30
per cent dependency ratio is considered a satisfactory phenomenon in revenue
sharing, 5 out of 18 municipal councils can be considered to be generating sufficient
funds. However, only 3 out of 37 urban councils have achieved this level. Another
source of funding that does not come under the purview of the provincial council is
the supply of funds through the decentralized district budget. Here the members of
Parliament decide on the amounts of money to be invested in capital works in local
authorities. While deciding on priorities, they may be receptive to citizen groups, but
not necessarily to elected representatives of local authorities. This is particularly true
in case an opposition party controls the local authority.

Allowing members of Parliament to allocate capital development funds through

the district budgets has had other negative impacts as well. Often, members of
Parliament are keen on the construction of new facilities such as markets,
playgrounds, roads etc. However, the district budget does not provide for
maintenance of such facilities. Local authorities are thus saddled with maintenance
of facilities they did not ask for and for which they do not have finances. District and
divisional secretaries who are supposed to be neutral civil servants have often
succumbed to the demands of the members of Parliament and, in many cases, have
built facilities knowing that the concerned local authority did not have adequate
capacity to maintain these. Central development grants cannot be passed directly to
local authorities and must be disbursed through the provincial councils. However,
central government loses control over the use of the funds once they are passed to
the provincial councils. Considerations other than development often take
precedence in decision making at provincial council level, resulting in the fact that

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development programmes of some local authorities that deserve funding remain

unfounded.

Since taxation or fee levying is a politically sensitive issue, some of the

attempts to increase revenue have become quite unpopular. Even the normal
increase of rates that is done once every five years is not a popular move. There
have been instances of postponement of such action, perhaps due to pending
elections. An issue that has been a bone of contention is the limitation in revenue
earnings by local authorities, especially in urban areas, due to the take-over of
certain services such as water supply, drainage and electricity supply that could be
undertaken easily by local authorities. When inquiries are made on this issue,
government-owned organizations argue that the liabilities of local authorities have
been far greater than their capacities would permit to perform.

At the same time in urbanized areas such as Colombo, the local authority is not
in a position to perform its legitimate role to serve the total population. This is best
observed in case of low-income settlements. Since land ownership or land rights are
established in case of slum/shanty dwellers, they have not been considered as
formal residents of the municipal council areas. Hence services rendered to them
are restricted or different. That has reduced the revenue generation capacity of the
municipal council. This cannot be corrected as long as discrimination takes place in
servicing the low-income settlements in municipal council areas.

3.4 Personnel systems in local government

In the past, the civil service was divided into two cadres: the public service and
the local government service for which civil servants were separately recruited and
trained. The Public Service Commission and the Local Government Commission
oversaw both services. Although officially both services were considered equal, the
public service was seen as superior to the local government service, particularly with
regards to clerical, supervisory staff and technical grades. With the amalgamation of
the local government service this situation changed. The administrative service
officials in the local government services were absorbed into the Sri Lanka
Administrative Service. After implementation of the 13th Amendment to the
Constitution, local government was automatically subjected to the provincial public
service. As such they were subjected to the Provincial Public Service Commission
authority and became transferable between local authorities. Hence, rules and
regulations applicable to the Provincial Public Service Commission are applicable to
local authorities’ employees as well.

Resulting from the fact that all recurrent establishment costs are borne from
allocations made by the Finance Commission under block grants, provincial councils,
and through them local authorities, are forced to decide on cadres, job description
and recruitment procedures as directed by the centre. Job descriptions of cadres
determined in the early nineteen seventies were revised only in the mid nineties,
since the provincial council and local authorities had to wait until the government
agreed to a revision while services, population and investment s have increased
during a period of about 25 years.

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The process of cadre determination is tedious; needs are studied and

proposals are submitted to the Ministry of Local Government. The Ministry submits
the proposal for staff revision to the Cabinet of Minister. The normal procedure is to
direct the salaries and cadre committees of the central government to study the
proposal and submit the proposal back to the Cabinet with a recommendation. A
government that is being pressurised by the World Bank and the IMF will not, as a
rule, increase public service cadres. Being aware of this situation, the committee
usually has a habit of reducing the numbers in the proposal. Generally speaking, the
Cabinet accepts the committees’ recommendation. Upon approval of the Cabinet,
recruitment procedures are applied. Depending on requirements and grades, the
decision is taken who should do the recruitment. Generally, civil servants for all-
island services are recruited by the central government, whereas the Provincial
Public Service Commission takes responsibility in recruiting civil servants for other
services.

Training facilities

The centre undertakes the induction training for all island services while others
are mostly trained on the job. All Provincial Councils are equipped with a
Management Development Training Unit (MDTU) headed by the Deputy secretary of
the Provincial Council. These MDTUs conduct the training programmes for the
Provinces and they co-ordinate with the Sri Lanka Institute of Local Governance,
which is the National Training Institution set up for the development of the Provincial
Councils and Local Authorities.

An Act of Parliament has filled the absence of an Apex Organization for

Training and Research in the field of Local Governance, with the establishment of
the Sri Lanka Institute of Local Governance (SLILG) in October 1999. It aims at
facilitating the institutional and management capability building of provincial councils
and local authorities for the efficient and effective provision of services to the people.
SLILG through teaching, research and outreach addresses the vital area of Good
Governance.

The Act has specifically been set up to:

(a) Provide training to the members and officers and servants of

Provincial Councils and local authorities with a view to equipping
them to perform their official duties efficiently and effectively;
(b) Conduct workshops and training courses on provincial and local
government management;
(c) Award certificates to those who have successfully completed the
training courses conducted by the Institute;
(d) Assist in the building up of a cadre of competent provincial and local
government officers and personnel in the country, with a view to ensuring good
governance;
(e) Make available to Provincial Councils and local authorities, the services of
specialists in provincial and local government management;
(f) Assist Provincial Councils and local authorities in improving their organisational
systems and management capability;

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(g) Undertake consultancy assignments in the field of provincial and local

government;
(h) Provide a forum for a critical appraisal of provincial and local government
organizational management systems and practices;
(i) Assist Provincial Management Development and Training Units and local
authorities in management development and the establishment of work norms,
determination of compensation systems, and generally, to improve their
productivity;
(j) Collaborate with other organizations, in Sri Lanka or abroad, having objects
similar to those of the Institute;
(k) Sponsor and hold conferences and seminars and publish books and magazines
on provincial and local government;
(l) Provide necessary data and information to the Minister, for the purposes of
formulating national policies on local government;
(m) Disseminate information on the functions and activities of the Institute of the
relevant institutions and to the public; and
(n) Conduct, promote and assist research into all aspects of provincial and local
government.

Staffing and personnel management

The Provincial Councils Act, 42 of 1987 provide for a Provincial Public Service
(PPS). The appointment, transfer, dismissal and disciplinary control of the officers of
the PPS are vested in the Governor of the Province. The Governor may delegate his
powers to a Provincial Public Service Commission (PPSC) for that province. The
Governor of the province appoints the PPSC. The PPSC functions as an
independent body, and any attempt to influence its decisions is made an offence
punishable by the High Court. The establishment of a provincial public service and
an independent PPSC seeks to secure functional autonomy of a PC in respect of
staffing and personnel management. However, it is important to note that the
President appoints the Governor. Hence, there is an indirect Central control over the
PPS.

3.5. Local autonomy

In post-devolution Sri Lanka, the primary, if not the sole, concern hitherto has
been a centre-province relation leaving out the local as a sub-system of provincial
interests. The 13th Amendment, while establishing Provincial Councils for every
province, guaranteed the status of Local Authorities in effect establishing two arenas
of devolved governance, i.e., the provincial and local. The powers and
responsibilities of Local Authorities (Municipal Councils, Urban Councils and
Pradeshiya Sabhas) constitute an integral sphere of devolution and a partner in
devolved governance making for a tripartite governance relationship.

The assignment of the responsibility for the supervision of the administration of

local authorities to PCs does not, and cannot in any way, detracts the role and
function of local authorities, and indeed the significance of “local” interests in the
governance concerns of the nation or the provinces. For example, when considering
public health, there is the considerable amount of work assigned to local authorities.

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Sri Lanka

The power and functions of LAs are specified in relevant Ordinances and Acts.
Comparatively, MCs have more power than UCs and PSs. It is important to note
that, under the 13th Amendment to the constitution, Provincial Councils can enlarge,
but not curtail, the powers entrusted to Local Authorities.

It would seem that in effect Local Authorities find themselves stranded in a

scheme of devolution where they must relate to the province on matters of
administration and the centre in respect of matters of national policy. Therefore, the
dividing line between policy and administration are to be sorted out between the
centre and the province with little or no involvement of the Local Authorities.

The constitutional provisions under item Four of List One of the Ninth Schedule
give a clear indication of the autonomous nature of local authorities. The national
government agrees on a national local government policy and determines the form,
structure and constitution of local authorities. The supervision of the management of
local authorities is the responsibility of the provincial councils. This demarcation of
power and authority, although clear, is not totally adhered to between the centre and
the provincial councils, due to other legal provisions. For example, under the
Municipal Council Ordinance (Section 11), Urban Council Ordinance (Section 10)
and the Pradeshiya Sabhas Act (Section 5), the central Minister is authorized to
curtail or extend the term of office of the members of these local authorities by one
year. The Minister of Local Government has exercised this authority on several
occasions in the past and his authority has not been challenged so far.

Under the Constitution, the President appoints the Governor and the chief
secretary of the Province. In addition most of the key officials such as secretaries of
provincial Ministries and provincial Commissioners are seconded from the centre to
the provincial public service. Thus, not only local authorities but also provincial
councils heavily depend on resources provided by the centre.

The total establishment cost, including the remuneration of local elected

officials, is borne by Finance Commission Grants disbursed through provincial
councils. The Central Salaries and Cadre Committee is responsible for the re-
enrolment of local government staff and their salaries. However, this authority of the
Salaries and Cadre Committee to determine the vacancies of local authorities has
created enormous problems. From the government’s point of view this kind of action
is necessary to restrict uncontrolled recruitment. Moreover, central government is
under constant pressure to reduce public and local government service cadres.
Therefore, the Salaries and Cadres Committee has restricted its work to determine
the salary of local authorities in keeping with national policies.

The Commissioner of Election conducts local government elections and

maintains the appointment of membership in local authorities. However, throughout
history the national political parties have been influencing the process by making
national political issues the mainstay of canvassing votes for local authority election.
Moreover, in addition to their own electorate and the provincial councils, local
authorities are answerable to Parliament through the auditor general and the Public
Accounts Committee. This is particularly so for funds made available to local
authorities by the Parliament through the provincial councils.

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The power to take action against the local authority management is provided in
local government laws. For example, the power to remove the Chairperson or Mayor
after due inquiry of is referred to in Section 277 of the Municipal Ordinance, Section
184 of the Urban Council Ordinance and Section 185 of the Pradeshiya Sabhas Act.
The grounds for action under these sections are incompetence, mismanagement,
default of performance, refusal or neglect to comply with provisions of law and only
few business transactions.

The process of dissolution of a local authority has to be done through a legally

accepted procedure. Basically the Minister (in the provincial council) should be
satisfied that sufficient proof is available to take action against the local authority on
the above counts. S/he has to appoint a retired judicial officer to report to him/her
within three months on the allegations made against the local council. This enquiry
has the power of a Commission of Enquiry appointed under the Commission of
Inquiry Act. Depending on the circumstances, the Minister has the power to suspend
the Mayor or the Chairperson and direct the deputy to carry on with the business of
the council. If the deputy Mayor or Vice Chairperson also has been suspended, the
Municipal Commissioner or Provincial Commissioner of local government of the area
in which the municipal council, the urban council or the Pradeshiya Sabhas is
located will be appointed to perform the functions of the Chief Executive. The power
to suspend the respective councils and Sabhas is also provided for in law. When a
Mayor is removed, the Minister has to appoint a Special Commissioner to manage
the affairs of the Municipal council.

The powers given to the Minster of Local Government in provincial councils on

local authorities have to be exercised in a lawful manner. The provincial
Commissioner of local Government becomes the key official in advising the Minister
to effect his/her powers. While before the process of devolution of power there was
only one Commissioner of Local Government, there are eight of them now with a
large number of officials, who inquire the affairs of the local authorities and make
recommendation for action. However, although local authorities are supposed to be
democratic administrative units they are not fully autonomous, Provincial Councils
can pass powers, functions and responsibilities on authorities. More powers could
be granted to local authorities if necessary; the provincial councils of North Western
Province and Central Province have already given additional powers to local
authorities engaged in development activities in their respective areas.

However, as mentioned earlier, the Provincial Councils cannot curtail the

powers of the local authorities. Another impediment to increase the revenue base
and strengthen the power base of the local authorities is that they have to formulate
by-laws. The local authorities suffer from the lack of expertise to formulate by-laws
as in the case of Provincial Councils failure to enact Statutes. This has retarded the
progress of these institutions to a great extent. At present, Sri Lanka Institute of
Local Governance is in the process of organising several programmes to overcome
this limitation.

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4. EXTENT OF PUBLIC PARTICIPATION

One of the main objectives of establishing local authorities is to give the public
more opportunities to participate in the decision making process regarding the
management and development of their respective council areas. For instance, the
preamble to the Pradehihiya Sabhas Act states that: “ legislation is enacted with a
view to providing greater opportunities for the people to participate effectively in the
decision making process relating to administrative and development activities at a
local level”. Although there is provision in the local authority laws to appoint
committees and facilitate peoples’ participation, this provision has not been used
meaningfully in the past.

There has been a general lack of interest by government officials to get

involved with the private sector, mainly due to the fear of being found faulty in
transactions. However, this is gradually being offset with programmes being
conducted by the Institute of Local Governance, highlighting that so long as the
process is transparent, public-private partnership should be encouraged to provide a
better service to the public. Local Authorities are faced with increased demands for
improved services, infrastructure challenges, fiscal constraints and scarce resources.
A few municipalities are responding to this challenge by exploring and implementing
alternative methods of service delivery.

The Committee system operating in Local Authorities is a very important

element of Management. The Committees are called Standing Committees in
Municipal Councils whilst in Urban Councils and Pradeshya Sabhas they are called
Committees. The Legal status of these Committees has been set out the Municipal
Councils Ordinance, the Urban Councils Ordinance and Pradesya Sabha Act. An
important change in the Pradeshya Sabha is that the committees in the Pradesya
Sabhas can include the general public whereas the Municipalities will have only
elected members in the standing committees.

Participatory budgeting

In promoting a need-based development, a bottom up strategy has recently

been promoted by the Colombo Municipal Council (CMC). The outcome of this was
the introduction of Participatory Budgetary System. In previous years, officials
prepared budgets based on the estimates made by the departmental heads on
needs identified by themselves. However, the needs are now being identified in
partnership with the Community Based Organizations (CBOs).

A working committee has been formed, known as the “core group”, consisting
of CMC officials and NGO representatives. At present, only two NGOs are
represented, which have been selected based on their past experience in working
with the community. The “core group” has been allocated a budget of Rs. 25 million
for the year 2003.

The format for budget proposals has been designed to encourage the
submission of project proposals by Community Based Organizations. Proposals are
entertained only from Social Service organizations that have been registered with the

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Social Services Department under the Ministry of Social Services and also registered
with the Colombo Municipality. Maximum funding per project is Rs. one million.
However, Rs. 1.7 million was approved for the first proposal.

Subject areas were identified as follows:

• Health and nutrition;

• Environmental management;
• Public utility;
• Economic development; and
• Child, youth, women and social development.

Only an abstract is requested at the initial stage and if the committee is

interested, a detailed proposal is solicited. Though the proposals are submitted by
CBOs, the committee cannot be certain that the applicants have gone through the
participatory process at the grassroots level in developing the proposals. However,
the committee can obtain a fair idea by checking with slum societies, credit societies,
grama niladaris, and with the Council Member of the area from where the proposal is
generating. In addition to this, since the Municipality is divided into six districts and
has six community leaders, depending on the area from where the proposal is
generating, the community leader of that respective district is co-opted to the
committee to evaluate the proposal. This process encourages the social service
organizations to ensure the participation of the community.

In addition to obtaining their inputs for budget preparation, the CBOs are also
used for community contracting. CBOs are being trained by CMC to perform this task
more professionally. Each programme lasts 10 days.

Women’s participation

Sri Lanka, that produced the first female Prime Minister in the world, has
achieved positive results in connection with women’s public participation. This has
been a gradual process initiated since independence in 1948. However, since the
Rio Summit, specific goals have been accomplished in the areas of creation of
women entrepreneurs, and capacity building in decision-making, especially through
establishing a Ministry for Women’s Affairs, Women’s Bureau, rural credit and
savings scheme’s, women’s organizations and community leadership in the areas of
reproductive health, gender sensitization and training.

The Women’s Bureau implements a number of programmes and projects to

improve the economic status of women by providing skills and assisting in self-
employment schemes. The creation of Women Entrepreneurs Programme has been
promoted as the means to economic empowerment, decision making and also to
form women’s organizations. This has been implemented as a part of the Integrated
Rural Development programmes of all Districts. NGOs such as Sarvodaya have
played a leading role in this programme.

There is an annual award scheme for women entrepreneurs to encourage

women participation in business. Rural Credit and Saving Schemes through
programme commercial banks are helping women who are in need of credit and

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financial security. The Bank of Ceylon in collaboration with the Women’s Bureau has
launched a credit scheme called “Isuru Naya” , enabling women to borrow Rs. 5,000
– 10,000 for self employment. The “Janashakthi Bank”, the “Grameeya Bank”, the
“Sanasa” and “Sarvodaya” have made a significant impact on women in rural areas.
There are a number of programmes and projects implemented under the National
Plan of Action for Women 1995, which include counselling services on violence
against women, integration of women’s needs and contribution to the development
process, amendment to the Lanka Development Ordinance to ensure equal land
rights to women.

A summary of the proportion of male and female councillors in Sri Lanka, based
on elections in 2002, is summarised in Table 8 below. A separate provision for
participation in local government is not available for women or for those who are
disabled. However, there is strong lobby to include a higher percentage of women as
candidates in the future elections.

Table 8: Proportion of male & female councillors in LAA in Sri Lanka

(Based on election 2002*)

Province Total Male (%) Female (%)

Southern Province 557 554 99.46 3 0.54
Central Province 603 594 98.5 9 1.49
Uva Province 320 314 98.12 6 1.87
Western Province 869 844 97.12 25 2.88
North Eastern Province 347 327 94.23 20 5.76
Sabaragamuva Province 422 416 98.57 6 1.42
North Central Province 285 280 98.24 5 1.75
North Western Province 499 496 99.4 3 0.6
Total 3902 3825 98.3 77 1.97

Source – Sri Lanka Institute of Local Governance.

*The total number of elected members will not tally with the seat allocation per Province due to the
fact that some of the local authorities have been dissolved. This difference occurs only in the
Southern Province and the North/East Province.

Youth participation

There is a legal provision, which requires the contesting parties to include 40

per cent youth representation aged between 18 and 35 when forwarding candidates
for the elections. This includes young women and men.

NGO participation

Most NGOs in Sri Lanka are yet to understand the concept and the inter-
linkages between different subject areas and issues within sustainable development.
Probably for the first time, various sectors lead by NGOs are showing interest in
understanding the concepts of sustainable development and are attempting to
contribute in numerous ways as a result of the awareness brought about by the

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information to hold a World Conference on Sustainable Development. The Ministry

of Social Services, The Divisional Secretariat, the Central Environmental Authority
etc have registered thousands of NGOs but most of these are inactive. There is also
a NGO Secretariat. According to them there are over 10,000 NGOs.

5. CONCLUSIONS
Local authorities in Sri Lanka are faced with increased demands for improved
services, while facing infrastructure challenges, fiscal constraints and scarce
resources. A few municipalities are responding to this challenge by exploring and
implementing alternative methods of service delivery. Some issues to bear in mind
for future strengthening of local governance are listed below:

• Partnership building: There is a global trend towards partnerships as one

way to improve the delivery of municipal services. This approach uses the
expertise, investment and management capacity of the public and private
sectors to develop infrastructure, as well as to improve and extend efficient
services to all residents. The Colombo Municipality is handling solid waste
management by this private partnership approach. Many are reluctant to
involve the private sector due to fear of getting a bad name. However, this
could be overcome by introducing transparent systems.

• Present proportional voting system: The proportional system of voting

has replaced the previous system of electing Ward members. At present, it is
electing for the whole area. If a person is elected on this basis, s/he is not
responsible for a particular area. This implies that if the general public takes
an issue to a member, s/he can get away by saying that s/he was not
selected by their vote alone and that they committed to serve all the areas
(several wards). By saying this they get away from their responsibilities.

• Legal and administrative constraints: All by-laws have to be prepared in

Sri Lanka’s three official languages (English, Sinhala and Tamil).
Unfortunately, most of the local authorities do not have the capacity and
facilities to translate into these three languages or to draft modules at local
level. To add to these difficulties, both these approaches are time
consuming.

• Excessive financial dependence on the centre: The narrow revenue base

of the local authorities imposes serious budgetary and financial management
constraints and the local authorities will have to increase their revenue base.
In order to do this, they have to improve their collection system and
strengthen their legal base to have the powers to take necessary action for
the overall benefit of the Council.

• Capacity building: Most of the local authorities lack competent personnel to

manage the affairs of the Councils. Most of the competent officials prefer to
work at the provincial and cenral government levels. However, if good career
opportunities are given with the proper training and motivation, it will be
possible to attract and retain qualified personnel. Several funding agencies

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have come forward to strengthen the capacity of the local authorities in Sri
Lanka. At present Sri Lanka Institute of Local Governance is working closely
with UN-HABITAT and Asian Development Bank to implement the
Sustainable Cities Programme and the Urban Development Low-Income
Housing Programme. Similar co-operation is anticipated with several other
donor agencies to strengthen the capacity of the local authorities.

References
Annual Review Report, 2000/2001, Financial Management Training Programme
Conducted for the Staff of Urban Local Authorities under Urban Development and
Low Income Housing Project, Sri Lanka Institute of Local Governance.

Central Bank of Sri Lanka, 2001, Economic And Social Statistics of Sri Lanka.

Central Bank of Sri Lanka, 2003, Sri Lanka Socio-Economic Data 2003.

External Resources Department, 2000, A Framework for Poverty Reduction.

Gunawardena, A.S., 2001, Legal and Administrative Constraints Confronting

Provincial Councils. Issues in Devolution and Governance in Sri Lanka, Sri Lanka
Institute of Local Governance.

Municipal Council Ordinance and Amendment Act 1987.

Ministry of Interior, 2002, Sri Lanka Statistical Data Sheet, Year 2002, Department of
Census And Statistics.

Provincial Councils Act No.42, 1987.

Town And Country Planning (Amendment) Act No.49 of 2000.

Urban Councils Ordinance and Amendments Act 1987.

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