Issue link: https://maltatoday.uberflip.com/i/444527
maltatoday, SUNDAY, 11 JANUARY 2015 7 JAMES DEBONO MORE than half of local councils in Malta are in the red, up substan- tially by five from 32 in 2012 to 37 in 2013, in a sign that local government in Malta is either over-spending or not being voted enough money for its needs. The fact is that not only did more than half of local councils finish 2013 with a deficit, but a further 25 councils face liquidity prob- lems due to a nega- tive working capital balance. According to the report this could imply that councils may encounter diffi- culties in meeting their obligations when due. A report by the auditor general reveals that 37 local councils registered a deficit in 2013 and 25 coun- cils a negative working capital balance and may face a liquidity problem in the future. There are 68 local councils in Malta. Councils registered revenue of €38 million in 2013, €31 million of which came from the government allocation to councils. 13 councils have registered their third consecutive deficit since 2011. St Paul's Bay faces a record €439,969 deficit. The auditor notes that from year to year, the finan- cial position of this council is de- teriorating. "The €439,969 deficit reported during the year under review is nearly six times higher than that of €63,855 reported in the preceding year," is the telling comment. Among the main expenditure increases were patching works (€125,766), refuse collection (€92,099), handymen and works monitor service (€69,988), repairs to public property (€43,482) and salaries (€37,741). The Zebbug (Malta) council fac- es the greatest liquidity problems. In 2013 the council's current li- abilities exceeded current assets by €1,362,696. Zebbug also registered the second highest deficit. Birkirkara has also seen its nega- tive working capital shoot up from €792,930 in 2012 to €985,032 in 2013 even if it saw its deficit de- cline from €95,543 to €46,610. Although the council has cut op- erations and maintenance costs, as well as the administration expenses by €127,154 and €6,687 respective- ly, it still ended the financial year with a deficit. This was mainly due to a decrease in revenue received by the council, especially that from the Law Enforcement System (LES). The council's wage bill in- creased due to the employment of three additional officers in 2013. The capital Valletta's council also saw a deteriorating financial situa- tion over the preceding year. Whilst administration and other expenditure decreased by €68,808, the decrease was out-weighed by increases of €141,840 in operations and maintenance costs. In addi- tion, increases in Local Enforce- ment Income (€5,467) and Funds received from Central Govern- ment (€1,817) were not sufficient to offset the drop of €107,942 reg- istered in the general income gen- erated by the council, which has further contributed to the loss of €215,972 suffered in the current financial year. Sliema, which had registered a profit of €316,031 in 2012, ended 2013 with a loss of €214,181. In 2013 the council spent €147,530 more on the repair of roads and street pavements. Sliema does not face any liquidity problems. 10 councils which had a defi- cit in 2012 registered a surplus in 2013. The greatest change in for- tunes was seen in Mosta, where a €214,677 deficit was turned into a €173,061 surplus. News Godfrey Farrugia appointed whip of Labour's parliamentary group THE Labour Party's parliamen- tary group has unanimously ap- proved the nomination of former health minister Godfrey Farrugia as the group's whip. In a statement issued by the party, the PL announced that Farrugia was nomi- nated by Prime Minis- ter Joseph Muscat and the group approved the nomination. Farrugia replaces Carmelo Abela who was appointed home affairs minister following Manuel Mal- lia's dis- missal. T h e m o v e is be- ing widely interpreted as Muscat's way of extending an olive branch to Farrugia, after having accepted the latter's resignation in March 2014. The move prompted a Cabi- net reshuffle that saw Muscat ap- pointing a new health minster, Konrad Mizzi, who also has responsibility for energy. Since his resignation, Farrugia's partner – back- bencher Marlene Farrugia – has been openly critical of several of Muscat's de- cisions, especially recently during the Sheehan inci- dent that prompted the dismissal of former home affairs minister Manuel Mal- lia. 37 councils in the red than half of local councils in Malta are in the red, up substan- tially by five from 32 in 2012 to 37 in 2013, in a sign that local government in Malta is either over-spending or not being voted enough money for The fact is that not A report by the auditor general reveals that 37 local councils registered a deficit in 2013 and 25 coun- cils a negative working capital balance and may face a liquidity There are 68 local councils in Councils registered revenue of €38 million in 2013, €31 million of which came from the government the decrease was out-weighed by increases of €141,840 in operations and maintenance costs. In addi- tion, increases in Local Enforce- ment Income (€5,467) and Funds received from Central Govern- ment (€1,817) were not sufficient to offset the drop of €107,942 reg- istered in the general income gen- erated by the council, which has further contributed to the loss of €215,972 suffered in the current Councils with highest deficit € St Paul's Bay 439,969 Zebbug (Malta) 265,191 Valletta 215,972 Sliema 214,181 Victoria 120,896 Top 5 councils with highest negative working capital € Zebbug 1,362,696 B'Kara 985,032 Zurrieq 626,364 Valletta 626,160 Rabat 228,679