The government has allocated MVR 2.5 billion for block grants to local councils next year.

According to a circular issued by the Ministry of Finance, councils must prepare their 2027 budgets using the format provided by the ministry. They have also been instructed to ensure their proposed budgets do not exceed the block grant allocations estimated by the ministry.

The ministry has also announced indicative block grant allocations for the following two years. While the allocation for next year remains largely unchanged from this year, it is expected to increase to MVR 2.6 billion in 2028.

Male' City Council will receive the largest allocation at MVR 231 million, accounting for about 10 percent of the total block grant budget.

The other city council allocations are:

Addu City Council: MVR 93 million

Fuvahmulah City Council: MVR 67 million

Kulhudhuffushi City Council: MVR 57 million

Thinadhoo City Council: MVR 46 million

Together, the five city councils will receive around 20 percent of the total block grant budget.

Since 2020, government funding for councils has been provided through block grants, with the total allocation determined in relation to state revenue.The amount allocated to each council is calculated using a formula that takes into account factors including island population, land area, distance from the atoll administrative capital, distance from Male', and the council's performance score assigned by the Local Government Authority.

This year, approximately MVR 2.5 billion was allocated for council block grants, of which MVR 1.5 billion has been disbursed so far. Last year, councils received MVR 2.1 billion in block grants.