Local government reform was necessary, says president

President Nikos Christodoulides on Monday described Cyprus’ local government reform as “necessary”, during the 45th Annual General Assembly of the Union of Municipalities which was attended by members of the cabinet.

He said that any corrective measures would be discussed through dialogue with all stakeholders. The president explained that the reform, which took effect on July 1, 2024, was designed to strengthen financial sustainability, improve resource management and enhance the administrative autonomy of municipalities.

Although challenges and weaknesses had been identified early on, the government remained committed to improving the new framework and helping local authorities function more efficiently, he said.

Christodoulides compared the reform process to the introduction of the national health scheme (Gesy), saying that such large-scale changes require time and continuous adjustments.

“Only through operation and constant evaluation will we reach the level we aim for,” he said.

The president thanked mayors, deputy mayors, councillors and municipal staff for their efforts to improve services and residents’ daily lives. He also praised the cooperation between the government and the Union of Municipalities, saying differences in approach could be resolved through constructive dialogue.

Christodoulides acknowledged the support of the finance and interior ministers for resolving financial issues faced by municipalities. These included extra grants to offset losses from development licensing revenue, funding for major road projects and agreements on payroll expenditure levels.

He highlighted the recent deal on the 40 per cent payroll spending limit, calling it an important step towards maintaining the municipalities’ development role.

The president reminded delegates that state grants for municipalities total €117 million under current legislation, an amount agreed with the Union of Municipalities. The government, he said, would continue discussions to avoid fragmentation in the allocation of these funds.

Almost a year and a half after the reform law was adopted, Christodoulides said most parties agreed it had been necessary and had created a more modern and sustainable structure for local authorities. However, he added that newly merged municipalities were still in the early stages of adapting and would need more time to deliver visible results.

The president stated that not all mergers had been based on the required economic and technical criteria, meaning results would differ among the 20 municipalities. These disparities, he said, would be addressed through future legislative amendments after next year’s parliamentary elections, following consultation with municipalities, the parliamentary committee and political parties.

He also announced plans to review the role of deputy mayors, citing inconsistencies in their number and responsibilities across municipalities. Some areas, he said, had as many as 14 deputy mayors, while others had only two despite similar populations. He called for honest discussion and cooperation to define duties clearly and ensure better performance.

Christodoulides said the government would promote corrective regulations for the current term, already approved by the House of Representatives, and prepare a more comprehensive arrangement before the next term of local authorities.

“The government is ready to discuss,” he said.

“The goal is common, the challenges are common, and through cooperation we will find common solutions.”