The Government has allocated MVR 2.5 billion in block grants for local councils in next year's State budget, with the Ministry of Finance issuing budget guidelines and grant allocations to councils.

Under the guidelines, councils must prepare their budgets using the format prescribed by the ministry and ensure that proposed expenditure does not exceed the allocated block grant.

The ministry has also released projected block grant allocations for the next three years. The allocation for next year remains broadly in line with this year's budget, while it is projected to increase to MVR 2.6 billion in 2028.

Malé City Council will receive the largest allocation at MVR 231 million, followed by Addu City Council with MVR 93 million, Fuvahmulah City Council with MVR 67 million, Kulhudhuffushi City Council with MVR 57 million, and Thinadhoo City Council with MVR 46 million. Together, the five city councils account for around 20 per cent of the total block grant allocation.

The Ministry of Finance said allocations are determined based on factors including population, land area, distance from Malé, administrative responsibilities, and councils' performance scores assessed by the Local Government Authority.

The Government has distributed funding to councils through the block grant system since 2020. So far this year, MVR 1.5 billion has been disbursed, compared with MVR 2.1 billion provided to councils during the previous year.