REVIEW OF 2015 BUDGET POLICY STATEMENT (PBS)

Parliamentary Budget Officehttp://www.parliament.go.ke/pboParliament Buildings

I. BACKGROUND

(a) Overview and purpose of the Budget Policy Statement (BPS).

1) The Budget Policy Statement is published in accordance with Section 25 of the Public Finance Management Act, 2012. In preparing the Budget Policy Statement, the National Treasury is required to set out the broad strategic priorities and policy goals that will guide the National government and county governments in preparing their budgets both for the following financial year and over the medium term. The National Treasury is required to include the following in the Budget Policy Statement:-

(a) An assessment of the current state of the economy and the financial outlook over the medium term, including macro-economic forecasts;

(b) The financial outlook with respect to Government revenues, expenditures and borrowing for the next financial year and over the medium term;

(c) The proposed expenditure limits for the national government, including those of Parliament and the Judiciary and indicative transfers to county governments;

(d) The fiscal responsibility principles and financial objectives over the medium term including limits on total annual debt.

2) The second Schedule of the Standing Orders for the Senate assigns the Standing Committee on Labour and Social Welfare the mandate to consider matters relating to manpower & Human Resource Planning, gender, Culture and Social Welfare, youth, National Youth Service, Childrens welfare, National Heritage, betting, lotteries, sports Public Entertainment, Public amenities and recreation.

3) The following spending agencies are therefore under the purview of the Standing the Committee:

Ministry of Labour Social Security and Services,

Ministry of Sports, Culture and Arts

National Youth Service

State Department for Planning- Gender and Youth Empowerment Programme

II. HIGHLIGHTS OF THE BUDGET POLICY STATEMENT FOR 20154) The strategy for the Medium Term Budget Policy Statements (BPS) for 2015 is a re-emphasis on Economic Transformation for Shared Prosperity in Kenya. The Budget Policy Statement for 2015 reviews the progress that the Government has made in the five pillar thematic economic transformative strategies spelt out in the BPS for 2014. 5) The implementation of programs under these five pillars is expected to raise efficiency and productivity in the economy, and in turn, accelerate and sustain inclusive growth, create opportunities for productive jobs, and secure livelihoods of all Kenyans. The BPS, therefore, reiterates the Governments priority programs and structural reform measures to be implemented in the Medium Term Expenditure Framework for 2015/16 2017/18.

6) The following are the five thematic pillars on economic transformative strategies spelt out in the BPSTable1: Thematic Pillars of Budget Policy 2015

Thematic PillarRelevant Sector(s) and sub-sectors

Pillar I: Creating conducive business environment for employmentFinancial Services sector; Governance; Security and Public Administration

Pillar II: Agricultural transformation and food securityAgriculture Rural & Urban Development; Youth and Women; Manufacturing; Sports Culture and Heritage

Pillar III: Transport, Logistics, Energy and Water for Inclusive Growth Energy, Infrastructure & Water; Road connectivity; Railway, Port and Pipeline expansion

Pillar IV: Access to quality social servicesHealth; Education; Social Protection

Pillar V: Further entrenching of devolution for better service deliveryDevolution and Inter-Governmental Relations including support to County Governments

7) The various Ministries, Departments and Agencies (MDAs) under the purview of the Committee are expected to support the achievement of Pillar II. Under this pillar, the Government builds on the on-going initiatives (UWEZO Fund, Youth and Women Enterprise Development Funds) and expands into new program areas aimed at skills development and access to credit to enable this group be the dynamic drivers of growth and employment creation.8) The Government under Pillar II , indicates the use of a multi-facetted approach aimed at equipping the youth and women with the requisite skills and competencies; building their entrepreneurial capacities; investing in labour intensive sectors to generate jobs; engaging them in national service and building community and public assets. The National Youth Service will continue to be positioned as the premiere institution for the national youth transformation and re-socialisation agenda. 9) The Sports, Culture and Arts Sub-sector is covered in the second pillar under the tourism, sports, culture and Arts objective.

10) Social protection is covered under the fourth thematic pillar. The objective under this pillar is to cushion the people who may suffer welfare shocks during the implementation of the economic transformation agenda.III. Linking the BPS 2015 to the National Development Agenda

11) The following policy documents inform allocation of resources in the Budget Policy Statement for 2015 to the various spending agencies: Kenya Vision 2030; Second Medium Term Plan 2013-2017 and Strategic Plan for Various Ministries Departments and Agencies (MDAs)

12) The priority programs and projects identified in the BPS of 2015 are in line with the programs in the ministry in its strategic plan but more importantly they are in line with the programs identified under the Medium term plan II.IV. Resource allocation within the MTEF Perioda) National Government Ceilings 13) The proposed ceilings for the National Government for the period 2015/16 financial year is estimated at Kshs 1.4 trillion comprising of Kshs. 1.35 trillion for national government, Kshs 23 billion for parliament and Kshs 18 billion to Judiciary. The total allocation is set to increase to Kshs. 1.5 trillion in 2016/2017 and Kshs 1.6 trillion in 2017/18.

Table 2: Summary of resource allocation 2015/16 2017/18 (Kshs billions)

Details 2015/162016/172017/18

National Government1,354.921,470.191,594.18

Parliament22.9723.6624.70

Judiciary 17.9618.9620.76

Total 1,395.851,512.811,639.64

Source: National Treasury (BPS 2015)

14) Table 3 provides the projected baseline ceilings for the 2014 MTEF, classified by sectorTable 3: Sector Ceilings for 2015/2016 (Kshs millions)SectorRecurrentDevelopmentTotal Proportion of total allocation

a) Energy, Infrastructure & ICT36,216 349,195 385,411 27.6%

b) Education291,373 35,986 327,359 23.5%

c) Public Administration and International Relations123,423 94,276 217,699 15.6%

o/w Parliament20,3402,60722,9471.6%

d) Governance Justice Law and Order125,663 17,557 143,220 10.3%

o/w Judiciary12,5965,36617,9621.3%

e) National Security114,072 - 114,072 8.2%

f) Agriculture, rural and urban development16,430 48,807 65,237 4.7%

g) Health14,826 36,151 51,407 3.7%

h) Environment Protection, Water and Natural Resources28,011 23,396 50,977 3.7%

i) Social Protection, Culture and Recreation11,234 14,446 25,680 1.8%

j) General Economic and Commercial Affairs6,841 7,954 14,795 1.1%

Total768,089 627,768 1,395,857 100%

As shown in table 3, the Social Protection, Culture and Recreation sector was allocated 1.8% of the total allocation.

b) County Government Ceilings 15) The total funds to the county governments will amount to Kshs 283.7 billion of which Kshs. 258 billion is sharable revenue while the rest is conditional grants. The table below indicates the breakdown of county allocations: Table 2: Allocation of national share of revenue to County GovernmentsItemAmount

(Kshs bln)% of 2012/13 Audited revenue (Kshs. 776.9 bln)

County Equitable Share258.033%

Conditional allocations25.7

Free Maternity Health Care4.3

Leasing of Medical Equipment4.5

Level 5 Hospitals2.0

Allocation from fuel levy fund (15%)3.3

Health Care Facilities Compensation For Forgone User Fees0.9

Conditional allocation loans and grants10.7

Total County Allocation 283.737%

c) Sector Resource Ceilings

16) Table 3 Provides a comparison of revised estimates for FY 2014/2015; resource requirements for 2015/2016 and BPS ceilings for various votes and Programmes under the purview of the Departmental Committee of Labour and Social Welfare

Table 3: Summary of Expenditures by Programmes 2015/16- 2017/18 (Kshs. Millions)Vote DetailsProgramme and Sub ProgrammesRevised Estimates 2014/15Resource Requirement 2015/16BPS 2015 Ceilings 2015/16Projected Ceilings

2016/172017/18

Ministry of Labour, Social Security and Services

114Promotion of Best Labour Practices6781,530852682741

Manpower, Development Employment and Productivity Management1,0181,2701,0791,2151,254

General Administration Planning and Support Services582668585594616

Social Development and Children Services3,4478,8523,5153.7903,837

National Social Safety Net14,37120,85014,37114,46415,559

Total20,09633,17020,40220,74522,007

113MINISTRY OF SPORTS, CULTURE AND ARTS

Sports1,2467,6182,2234,2982,344

Culture1,2954,0621,4841,5751,631

Arts

Library Services and Archives Management1,2192,4551,3261,4081,457

General Administration, Planning and Support Services197918244260269

Total 3,95715,0535,2777,5415,701

TOTAL SECTOR24,05348,22325,68028,29527,708

17) The total budget proposed for the Social Protection, Culture and Recreation in the BPS for FY 2015-16 for the various Programmes and sub-Programmes amounts to Kshs. 25.68 billion of which Kshs. 11.23 billion (44%) is for recurrent expenditure while Kshs. 14.44 billion (56%) is for development expenditure. The proposed budget for the department is higher than last years budget which was Kshs. 24.05 billion. In the year 2015/2016, the total resource requirements by the various Programmes as per the sector reports is estimated at Kshs. 48.22 billion while the total ceilings as per the BPS for 2015 is Kshs. 25.68 billion representing 1.8% of the total allocation. The projected ceiling for the sector is projected to rise to Kshs. 28.29 billion in the 2015/2016 FY whereas the FY 2016/2017 ceiling is to drop to Kshs. 27.70.V. Key Salient Issuesa) According to the Constitution Fourth Schedule Part 2 Paragraph 4, Cultural activities, public entertainment and public amenities including: - libraries, museums, sports and cultural activities and facilities are County Functions. For example Programmes such as development and management of sport facilities, library services whosemajor outputs include constructing, equipping and upgrading library facilities, increasing access to information materials.b) One of the targets in the FY 2014/2015 was the rehabilitation/renovation of KipchogeKeino Stadium and Nyayo National Stadium, and according to the BPS (pg 73)this has been completed, however this same target has been pushed to the FY 2015/2016. Rehabilitation of stadiums should also be carried out by County Governments.c) According to the 2014 BPS, as part of the scaling up investments towards safety net programs, a graduation scheme which was to enable elderly persons exit into lifelong ventures was to be developed. However, the same scheme is under the targets in BPS 2015. There should be information on the current positiond) One of the key outputs for the film production department in the FY 2014/2015 was the creation of the Kenya Film School. The film school was to be 80% complete in the FY 2014/2015 and the remaining 20% completed in the FY 2015/2016. However, the sector has not recorded the completion of the Film School in the outputs for 2015/2016.e) According to the sector report, the Occupational Safety and Health Institute was constructed to 50.1% completion, however, it has not been included in the target for either the 2014/2015 or the 2015/2016. What is the position of this institute

f) The BPS in its current format lacks up to date data in respect to the extent of achievement of planned activities as approved for the FY 2014-15. This information, even when it is preliminary, say for the first Quarter and or first half of the current financial year, would provide pointers as regard to budget implementation challenges for the current budget.g) A structure of collaboration between National and County Government on activities being carried by both the levels of Government should be created.Programmes, Sub-Programmes and targets for the Medium-Term Period

Programme/Sub-ProgrammeKey OutputsKey Performance IndicatorsBaseline 2014/2015 estimates2015/20162016/20172017/2018

Programme 5: Promotion of Best Labour PracticesEnforce compliance with labour lawsNo. of Inspections taken to enforce labour law 13,00013,50014,00015,000

Sub-Programme 1.1 Promotion of harmonious industrial relationsProcess backlog of Workmens Compensation casesNo. of cases processed1000700500200

Labour administration audits and advisory servicesNo. of audits and advisoryservices500100015002000

Sub-Programme 1.2: Regulation of Trade UnionsInspection of trade unions books of accountNo. books of account inspected465470475475

Sub- Programme 1.3: Provision of occupational safety and Health ServicesOSH committee members andother workers trained onOccupational Safety & HealthissuesNo. of workers trained onOccupational Safety & Health issues12,50017,00025,00030,000

OSH audits/inspectionscarried out in workplaces forcompliance with OSHA, 2007No. of OSH inspectionscarried out 7,50010,00012,50015,000

Industrial Plants & EquipmentexaminedNo. of plants & equipmentexamined15,00018,00023,00030,000

Workers in hazardous occupations medically examinedNo. of workers examined60,00065,00073,00082,000

Programme 6: Manpower Development, Employment and Productivity Management

Outcome: Optimal human resource utilization and a competitive workforce

Sub Programme 2.1: Human Resource Planning and DevelopmentNational Human ResourceDevelopment Strategy developedStrategy Paper-Strategy PaperStrategy implementation Strategy implementation

Sub Programme2.2: Provision of Industrial SkillsStudents trained in industrial skillsNo of students trained28,00030,00032,00035,000

Trainees attached in industryNo of trainees attached in industry15,50017,50020,00023,000

Sub Programme2.3: Employment Promotion ServicesModel employment officesconstructedNo. of employment officesestablished3322

Registered Job seekers placed

No. of registered job seekersplaced in gainful employment20,00026,00033,80043,940

Bilateral Labour agreements signed

No. of Bilateral labouragreements with key destination countries signed2222

Employment attach offices establishedNo of employment attachoffices established in key labour migration destination countries0222

Sub Programme2.4: Productivity Promotion, Measurement and ImprovementTrained as productivity championsNo. of persons trained240240300400

Productivity Practices mainstreamed in public ServiceNo. of Ministries & Agenciesimplementing 5S & Kaizen10151515

Programme 7: Social Development and Children Services. Outcome: Focused community mobilization and protected children

Sub Programme: 3.1: Social Welfare and Vocational RehabilitationCommunity based rehabilitation of Persons With DisabilitiesNumber of PWDs rehabilitated-50100200

Capacity for PWDs enhancedthrough trainingNo. of PWDs trained in VRCs390500650700

Persons with Albinismprovided with sunscreenlotions and screened for skincancerNumber of Persons with Albinism supported3000350045005000

PWDs provided with assistive& supportive devices and servicesNumber of PWDs provided with devices and services3000400050005000

PWDs provided with scholarship

Number of Scholarship awarded to PWDs7008009001000

Sub Programme: 3.2: Community Mobilization and developmentSelf-help groups and community based organizations registeredNumber of groups registered35,00050,00060,00070,000

Group leaders and members capacity builtNumber of leaders and memberstrained-15,10018,40020,000

Sub Programme 3.3: Child Community SupportComplement children education support providedNo. of OVCs assisted13,05014,20015,00015,500

Foster care services providedto children with no familiesNo. of children providedwith foster care5922,1312,5573,068

Education and skills development provided to orphans, other vulnerablechildren and young personsNo of Children trained43,200155,520186,624223,948

Orphans and VulnerableChildren (OVCs) outside cashtransfer programme supported

No of OVCs supported43,200155,520186,624223,948

Sub Programme 3.4: Child Rehabilitation and Custody

Charitable ChildrenInstitutions (CCIs) registeredNo. of CCIs registered

125150180210

Children re-integrated tocommunity from childreninstitutionsNo. of children re-integrated9001,1001,2501,400

Children in RehabilitationSchools trained in vocational skillsNo. of children trained1,7001,8502,1202,400

Programme 8: National Safety Net Programme

Outcome: Improved livelihood for the vulnerable persons

Sub Programme 4.1: Social AssistanceOlder Persons supported No of beneficiaries210,000310,000460,000660,000

Persons with severe disabilities supportedNo of additional beneficiaries27,20047,20077,000117,000

OVC supportedNo of additional beneficiaries supported 260,000360,000510,000685,000

Programme 9: Policy, Planning and General Administrative Services-Ministry Labour Subsector Outcome: Improve Service Delivery

Sub - Programme 9: Policy, Planning and General Administrative ServicesResolution of public complaints% of compliance with67707585

Programme 1: Sports

Expected Outcome: Excellence in sports performanceBaseline 2014/15Target 2015/16Target 2016/17Target 2017/18

SP 1.1: Development and Management of Sports Infrastructure and CompetitionsStadia % completion (Eldoret and Mombasa)-404020

Refurbished Nyayo National Stadium % completion-303040

Rehabilitation of KipchogeKeinoStadium completed% completion-100

Kenyan teams participating ininternational sports eventsNo. of teams participating ininternational sports-6810

International events hosted in KenyaNo. of events hosted in Kenya1213

SP 1.2: Promotion and Regulation of SportsBilateral sports activities undertakenNo. of Bilateral activities Actualized

10151720

Inter-county Sports championships heldNo. of county championships held1 111

Anti-doping initiatives undertakenNo. of sports persons trained in anti-doping.5007501,0001,250

Sports dispute tribunal operationalized No. of appeals Arising from decisions of Umbrella/ NationalSports Organization and Sports Registrar arbitrated5151010

No. of other cases referred to the Tribunal the parties resolved10151618

SP 1.3: Sports Training and Talent DevelopmentInternational Sports Academy

No. of pitches, developed1221

% completion of hostels and classrooms507090100

Sports officials and technical personnel trained.No. of officials and technical personnel trained5001,0001,5002000

Satellite academy (ies) establishedNo. of satellite academies10152047

Talented youth identified and trained.No. of talented youths identified and trained3005001,0002,000

Programme 2: Culture and the Arts

Expected Outcomes: Conserved national heritage and enhanced integration, cohesion and Patriotism

Sub-Programme 2.1: Conservation of HeritageHeritage knowledge, information and innovations generated anddisseminatedNo. of heritage articles published and disseminated50555860

Monuments, historical sites andcollections conserved.

No. of historical sites andmonuments restored-568

Value-added natural products developed, patented and marketed in local and export marketsNo. of patents on natural products1358

Sub-Programme 2.2: Development and Promotion of Culture, Music and DanceVisual artists promoted.

No. of visual artists facilitated to exhibit their works8009001,2001,300

Enhanced awareness on Kenyascultural heritageNo. of Cultural Festivals held38455055

No. of exhibitions held9 121520

Participation of music and dance groups in national functions enabledNo. of groups prepared and presented for performances duringnational functions.60728080

Sub-Programme 2.3: Performing Arts and Film ServicesFilms classifiedNo. of films classified300350400450

Cinema Theatre refurbished% of completed works-504010

Capacity of film makers enhancedNo. of trained film makers 3001,0002,0005,000

State-of-the Art International Arts Centre establishedNo. of artists trained92156240125

Capacity building in the arts industryNo. exhibitions held6101010

Programme 3: Promotion of Library Services and Archives Management

Expected Outcome: To improve the reading culture and access to documentary heritage

Sub-programme 3.1: Library ServicesUltra-modern library in Nairobi Constructed% completion of the National Library of Kenya/KNLS Hq.203020-

Creation of Virtual Library

No. of library users accessing the Virtual library-100,000200,000300,000

An offsite preservation centre established in NakuruNo. of users accessing the information1,250,0001,500,0001,800,0002,200,000

National government Reference Library establishedNo. of information resources acquired and processed.1000200035005000

Library services for people with Print disabilities promoted.No. of people with print disabilitiesaccessing library services.12550100

Sub-Programme 3.2: Public Records and Archives ManagementPublic records managementNo. of valuable records acquired20,00022,00025,00030,000

Access to public records and archival materials enhancedNo. of files/publicationsretrieved for reference10,00010,50011,00011,500

Public records and archives preservedNo. of archival materials microfilmed80,00085,00090,00095,000

No. of documents restored5000520055006000

Records in the Records Management Units (RMU) digitized.No. of Records digitized in the RMUs.500100015002000

Programme 4: General Administration and Support Services-Sports, Culture & the Arts Subsector Expected Outcome: To improve service delivery and coordination of Ministry functions, Programmes and activities

Sub Programme 4.1: Planning and policy developmentGender, youth, women and persons with disability mainstreamed%Value of tenders awarded to youth, women and peoplewith disability30303030

Sub-Programme 4.2: Administration support servicesHeroes council established

No. of heroes and heroines recognized and awarded120200250300

Socio-cultural and economic integration within East AfricaCommunityNo. of institutions participating in the festival-50--

ANNEX 1

LABOUR AND SOCIAL WELFARE

Resource requirements by Programmes and Sub-Programmes (KShs. Millions)

Programmes and Sub programmesEstimates FY2014/15Requirement FY2015/16Allocation FY 2015/16Projected RequirementFinance Gap

FY2016/17FY2017/18

Programme 1: Sports

SP.1.1: Development and Management of Sports Infrastructure and Competitions804.663,4865603,6603,843 (2,926.00)

SP 1.2: Promotion and Regulation of Sports81.622,6172112,6802,755 (2,406.00)

SP 1.3: Sports Training and Talent Development3601,5144501,5901,669 (1,064.00)

Total expenditure programme 1 1,246 7,617 1,221 7,930 8,267 (6,396.00)

Programme 2: Culture and the Arts

SP.2.1: Conservation of Heritage687224573223362445 (1,513.00)

SP.2.2: Development and Promotion of Culture, Music and Dance121.00457123478511 (334.00)

SP.2.3: Performing Arts and Film Services485.52135862814261497 (730.00)

Total expenditure programme 2 1,293.524,060.001,483.004,239.554,453.37 (2,577.00)

Programme 3: Promotion of Library Services and Archives Management

SP.3.1: Library Services1,079.001,7071,1841,7921,882 (523.00)

SP.3.2: Public Records and Archives Management139.00748141786825 (607.00)

Total expenditure programme 3 1,218.002,455.001,325.002,578.002,707.00 (1,130.00)

Programme 4: General Administration and Support Services-Sports, Culture & the Arts -

SP.4.1:Planning and policy development196.009182449671,018

SP.4.2: Administration support services

Total expenditure Programme 4 196.00918.00244.00967.001,018.00 (674.00)

STATE DEPARTMENT TOTALS3,95415,0504,27315,71516,445 (10,777.00)

Ministry of Labour, Social Security and Services

Programme 1: Promotion of Best Labour Practices

SP.1.1: Promotion of harmonious industrial relations299801313801879 (488)

SP1.2: Regulation of Trade Unions210810.6511.13 (2)

SP 1.3: Provision of occupational safety and Health Services374718530863826 (188)

Total expenditure programme 167515298511674.831716.45 (678)

Programme 2: Manpower Development, Employment and Productivity Management

SP.2.1: Human Resource Planning and Development59.6418885 588.48 195.66 (103)

SP.2.2: Provision of Industrial Skills666.73647.59680.43 689.47 735.26 33

SP.2.3: Employment Promotion Services260.63347.97282.21 391.12 359.31 (66)

Productivity Promotion, Measurement and Improvement31.2287.0831.4 88.88 90.72 (56)

Total expenditure programme 2 1,018.221,270.961,079.371,757.951,380.95 (192)

Programme 3: Social Development and Children Services

SP.3.1: Social Welfare and Vocational Rehabilitation829.511,2285911,4501,657 (636)

SP.3.2: Community Mobilization and development77.611,0923461,1801,274 (747)

3.3: Child Community Support2,527.315,8722,1437,3238,270 (3,729)

3.4: Child Rehabilitation and Custody413.02661435781917 (227)

Total expenditure programme 3 3,847.458,852.783,514.7810,734.0212,117.60 (5,338)

Programme 4: National Safety Net Programme

4..1: Social Assistance14,371.1620,85014371.2129,973.7141625.68 (6,479)

Total expenditure programme 414,371.1620,850.0014,371.2129,973.7141,625.68 (6,478.79)

programme 5: General Administration, Planning and Support Services

SP 1:General Administration, Planning and Support Services582.08668.85584.9684.89701.32 (83.95)

Total P4582.08668.85584.90684.89701.32 (83.95)

STATE DEPARTMENT TOTALS14,953.2421,51914,95630,65942,327 (6,562.74)

SECTOR TOTALS20,493.9133,171.5920,401.2644,825.4057,542.00 (12,770.33)

REPUBLIC OF KENYA

PARLIAMENT OF KENYA

FEBRUARY, 2015

Review of 2015 budget policy statement (bps)

TO Standing committee on Labour and social welfare

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