MND: MORE GRANT SUPPORT FOR TOWN COUNCILS

<Press release by Ministry of National Development>

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To help Town Councils with their operating needs and long-term capital expenditure requirements, MND will provide additional grant support to Town Councils in the following ways:

a) Lift Maintenance Grant (LMG)
MND will provide a Lift Maintenance Grant (LMG) of $600 per lift owned and maintained by the Town Councils, to help them cope with higher lift-related servicing and maintenance costs. This is expected to cost the Government an additional $13 million a year.

b) Matching Grant for the Lift Replacement Fund (LRF)
With effect from 1 April 2017, Town Councils have to set up a dedicated Lift Replacement Fund (LRF) to ensure sufficient funds are set aside for the replacement of their existing lifts. To assist the Town Councils, MND will match 50% of their quarterly contributions to the LRFs to supplement their savings. This new matching grant is expected to cost over $50 million in the coming year, and the grant quantum is likely to increase as the Town Councils build up their LRFs over time.
Earlier, MND had also announced a $450 million Lift Enhancement Programme (LEP) over the next 10 years to help Town Councils co-fund the costs of retrofitting older lifts.

Taken together, the Town Councils will receive more than $100 million of additional funding a year. These measures are on top of the existing grants that MND already provide to the Town Councils, namely the annual Service & Conservancy Charge (S&CC) Operating Grants and quarterly GST subvention, which worked out to around $120 million in FY15/16. With the new measures, MND will be doubling its funding support to the Town Councils. This is a substantial package to help the Town Councils with their running costs, and assist them with their lift modernisation and asset replacement programmes. Refer to Annex A for an overview of the funding support for Town Councils.

Ultimately, Town Councils have a statutory responsibility to manage and maintain the common property in HDB estates. While the Government is extending significant financial support, Town Councils still need to do their part to plan ahead and take appropriate and timely steps to ensure that their long-term finances are sustainable.

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