Review of Grant Amount to Town Council Given Additional Maintenance Cycles

Mr Zainal Sapari asked the Minister for National Development whether the Ministry can increase the grant allocated to Town Councils given the additional items or amenities required for cyclical maintenance using the Sinking Fund.

Town Councils fund their operations, including cyclical maintenance and replacement works, primarily through the Service and Conservancy Charges (S&CC) they collect from residents. This is supplemented by an annual operating grant from MND of about $98 million a year.

Town Councils should manage their finances carefully and take appropriate measures to ensure that they have sufficient funds to carry out their statutory responsibilities. This could include putting aside a higher proportion of their S&CC collections and grants-in-aid, beyond the stipulated minimum, in their Sinking Funds. They could also manage expenditures more tightly and increase the S&CC rates, where necessary.

MND has been studying ways to help Town Councils ensure their long-term financial sustainability. As announced in September 2016, MND intends to raise the minimum contribution rate into the Sinking Funds and to require Town Councils to set aside more funds for future lift replacements through a new Lift Replacement Fund. The new Lift Enhancement Programme (LEP), estimated at $450 million over the next 10 years, will also give Town Councils significant help by co-funding about 90% of their lift modernisation costs. This is on top of the existing Lift Upgrading Programme and Selective Lift Replacement Programme, which assist Town Councils with the replacement of their lifts.

Notwithstanding these measures, all Town Councils are ultimately responsible for the cyclical maintenance and replacement works in their estates. Town Councils must, therefore, continue to take a long-term view of their finances and plan ahead for their future expenditures.