Kenya UHC Workers Salary Transition Funding: National Assembly Demands Clear Plan

• Thousands of UHC workers are set to transition to permanent and pensionable terms, prompting a debate over how their salaries will be funded.
• The National Assembly Budget Committee is demanding a clear funding plan to prevent payment delays and county arrears, emphasizing predictable disbursements.
• The Commission on Revenue Allocation (CRA) is preparing 2027/28 revenue-sharing recommendations and proposes conditional national government allocations for UHC salaries until a formula review is possible.
• Integrating UHC worker salaries into county budgets would require a complex review of the existing revenue-sharing formula, which CRA chairperson Mary Chebukati indicates may not be feasible before April 2027.
• The discussions highlight the challenge of balancing national fiscal pressures with the need for counties to receive sufficient and reliable funding for essential services like healthcare.

Timely and predictable disbursements are essential to enable counties to plan, meet their obligations and deliver services without accumulating arrears.

A significant debate has emerged regarding the financial implications of transitioning thousands of Universal Health Coverage (UHC) workers to permanent and pensionable employment terms. This planned shift, spearheaded by the Ministry of Health and the Council of Governors, aims to formalize the employment status of these critical healthcare personnel. Their remuneration is intended to align with the rates established by the Salaries and Remuneration Commission (SRC).

In 2020, the Ministry of Health, acting through the Public Service Commission, initially recruited 9,724 UHC personnel for a three-year contractual period. Of this number, 8,550 individuals were subsequently deployed across Kenya's 47 counties. Crucially, despite their deployment to county-level services, their salaries have consistently been managed and disbursed by the national government via the Ministry of Health. The impending transition raises a fundamental question: should the financial responsibility for these Kenya Universal Health Coverage workers salaries remain with the national government, or should it be integrated into county budgets through the equitable share of revenue?

This funding dilemma is at the heart of the current discussions, as stakeholders seek a sustainable and predictable mechanism for Kenya UHC workers salary transition funding. The outcome will determine how these essential health workers are compensated in the long term, impacting both their job security and the financial stability of the devolved health sector.

The National Assembly Budget and Appropriations Committee has voiced strong concerns, demanding a clear and predictable funding framework to prevent potential payment delays and the accumulation of arrears for county governments. Committee chairman Samuel Atandi emphasized that county allocations must accurately reflect the true cost of devolved functions, the nation's overall revenue outlook, and the various competing expenditure demands faced by both national and county administrations. He warned that inconsistent disbursements could severely hinder county governments' capacity to fulfill their financial obligations and deliver essential services to citizens.

The Commission on Revenue Allocation (CRA) is currently in the process of formulating its recommendations for revenue sharing between the national and county governments for the 2027/28 financial year. The CRA has indicated that incorporating the UHC workers' wage bill into counties' equitable allocations would necessitate a comprehensive review of the existing CRA revenue sharing formula UHC workers, which dictates how revenue is distributed among the 47 devolved units. CRA chairperson Mary Chebukati has sought guidance from Parliament on the feasibility of conducting such a review before April 2027, given the extensive consultations required to modify the revenue-sharing framework.

Pending this complex review, the CRA has put forward an interim proposal: that the salaries for these UHC workers continue to be financed through conditional allocations from the national government to county administrations. This approach would maintain a distinct funding arrangement for these workers, avoiding an immediate transfer of the salary burden to counties through adjustments to their equitable share of revenue.

During a consultative meeting in Nairobi, Samuel Atandi challenged the CRA to provide detailed explanations for the assumptions underpinning its proposed allocations. He specifically requested clarification on how factors such as inflation, the specific expenditure needs of counties, and their existing service delivery responsibilities had been incorporated into the recommendations. Atandi highlighted the significant debt-servicing obligations and other national expenditure commitments faced by the national government, while simultaneously pointing out that counties bear the primary responsibility for critical services, including healthcare, agriculture, water, and local infrastructure.

The committee's concerns underscore the broader challenge of balancing national fiscal pressures with the imperative to ensure that devolved governments receive adequate and reliable resources to effectively perform their constitutional functions. This delicate balance is crucial for the successful implementation of Universal Health Coverage. CRA Commissioner Fatuma Gedi affirmed that these early consultations are designed to resolve outstanding issues and build consensus among stakeholders before the commission formally submits its revenue-sharing recommendations for the 2027/28 budget cycle, with the aim of producing a recommendation that avoids future mediation.

Lawyers advising county governments or health sector entities should closely monitor the ongoing debate and Commission on Revenue Allocation (CRA) recommendations regarding the funding mechanism for UHC workers transitioning to permanent terms. The outcome will directly impact county budgetary allocations, employment liabilities, and the potential for payment arrears, requiring proactive legal and compliance strategies.

Source: Original reporting via Capital FM Kenya