Local governments want to have another discussion about spending money from the Labour Fund

• The Act of 28 June 2024 on public finances introduced significant changes in the management of earmarked fund resources.
• ZPP points out that the regulatory impact assessment indicates that the changes proposed in the draft do not have a direct impact on the functioning of local government units and do not directly concern local government issues.
• As argued by the ZPP, the project has a direct impact on the functioning of local government units, in particular insofar as the Labour Fund resources are used to finance tasks carried out by district labour offices.

The Union of Polish Counties has submitted a motion to include the topic of the principles of spending Labour Fund resources in the agenda of the next meeting of the Team for the Public Finance System of the Joint Government and Local Government Commission.

As emphasized by local government officials, the Act of 28 June 2024 on public finances introduced significant changes in the management of earmarked fund resources, and the project was not submitted for consultation with the Joint Government and Territorial Self-Government Commission. ZPP also points out that the regulatory impact assessment indicated that the changes proposed in the project do not have a direct impact on the functioning of local government units and do not directly concern the issues of local government.

Local government officials add that the local government side received this letter the day before the adoption of the bill by the Council of Ministers, and in parliament the bill was processed in an extraordinary manner and was adopted by the Sejm on 28 June 2024.

- In other words, the local government side was firstly misled as to the actual effects of the regulation, and secondly, it had no actual possibility to analyse the project and its impact on the functioning of local government units due to the quick procedure of issuing opinions and the unreliably prepared Regulatory Impact Assessment - writes ZPP.

Meanwhile, as the ZPP argues, the project has a direct impact on the functioning of local government units , in particular insofar as the Labour Fund resources are used to finance tasks carried out by district labour offices.

As explained in the letter, so far, in notifications regarding the limit of expenditure sent to county governments, for the implementation of other optional tasks, one limit (one amount) was set, within which the starosts were left free to divide it into individual tasks/paragraphs of the budget classification. When granting the limit, the maximum level of expenditure was not specified, which a given county labor office could spend within the granted limit solely on the listed salary supplements for employees.

The amendment introduced modifications in the scope of making changes to the financial plans of state earmarked funds, including those concerning increases in salaries and remuneration from an employment relationship.

- The Ministry of Family, Labor and Social Policy, prudently, not wanting to risk exceeding the limit of expenditure on salaries and wages, at the beginning of April 2025 informed the counties about the change in the rules for the distribution of funds for the implementation of the so-called optional tasks, including salary supplements for employees - writes ZPP.

In the opinion of local government officials, as a result , there is a group of counties to which funds for allowances were allocated as part of the division of the Labor Fund limit despite the fact that they did not plan any expenditure in 2025 in this regard, or planned it at a lower level . In turn, for counties that had higher expenditures in the previous plan, funds were earmarked at a lower level, although - notes the ZPP - in some of them decisions to grant salary allowances for employees have already been made.

ZPP points out that communicating changes to local governments during the budget year, without appropriate notice, does not facilitate the implementation of tasks. Therefore, local government officials expect the introduction of a mechanism that will allow the status quo to be applied at least until 2025.