Local Governance Support Project (LGSP-3)

The government to decentralize power by ensuring effective LGSP is a bold move. Five-year project, which started in January,2017 and will end in June 2021. All Union Parishad (4553) have been brought under LGSP. The total cost of the project has been estimated at BDT 5535 crore. The Bangladesh government and the World Bank loan assistance of BDT 3153 crore to BDT 2382 crore. Gross funds are being allocated directly to the bank accounts of the Union Parishad.                                                                                 

Successive governments on different occasions expressed their intent to devolve powers to local governments through more autonomy and increased allocation of resources. In 2009, the government enacted. The Local Government Union Parishad Act, 2009 and The Local Government Pourashava Act, 2009 to strengthen governance system of the local governments. The reforms introduced through the act enabled a transparent and predictable fiscal transfer system for UPs through two Local Governance Support Projects (LGSP-1 & LGSP-2). Fiscal transfers supported by the project enabled UPs to execute their assigned expenditure mandate as per the UP Act, 2009.

The government over the years through different programs has committed to decentralization through a series of initiatives in policy reforms and a set of systems and procedures established for UPs. These include fiscal transfers, financial audits, performance assessments, and information management, community participation and improved governance. These have contributed to the significant progress made in empowering UPs across the country. Notable achievements include: (i) transparent and predictable Basic Block Grants (BBG) for all UPs, transferred directly to UP bank accounts in two tranches each year and three-year indicative BBG ceilings, with full discretion on the use of funds on priorities determined by communities with a provision for rollover of unspent funds; (ii) Performance Based Grants (PBG) to UPs as incentives for better performance; (iii) enhanced accountability through annual financial audits and performance assessments of all UPs by private audit firms; (iv) increased GoBshare of grant financing to UPs from 50% to 60% by the end of LGSP-2; (v) capacity building training to nearly 75,000 UP functionaries in planning, budgeting, and public financial management; (vi) improved safeguards compliance; and (vii) improved governance and transparency, demonstrated by enhanced capacity of UPs in preparing periodic plans, annual budgets, selecting & implementing development schemes through a community-driven development (CDD) approach and a participatory process (i.e., ward shavas, open budget meetings, information disclosure, making public all transactions). The major contribution of women in development planning and scheme selection has been recognized. A culture of accountability and transparency in service provision has been instilled at the local level.

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