Reform index 235: Social service providers allowed to lease state property without auctions

Reform index 235: Social service providers allowed to lease state property without auctions

Photo: pexels.com / Karolina Grabowska
7 June 2024
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Four regulations were included in the 235th issue of the Reform Index. From March 25 to April 7, 2024, the Index stood at +0.5 points — almost half of the previous issue’s value. This issue contains a resolution allowing social service providers to lease state property without auctions. Some experts assessed this positively, while others provided negative evaluations. Let us delve into why that was so.

Graph 1. Dynamics of the Reform Index

Graph 2. Values of the Reform Index and its Components in the Current Assessment Round

Organizations providing social services, regardless of their form of ownership, will be able to rent state property without conducting an auction, +0.25 points

Resolution 381, dated April 2, 2024, introduces changes to the Procedure for Leasing State and Communal Property.

The list of potential lessees who are allowed to rent state property without an auction now includes not only state and communal social service providers (such as day centers, night shelters, organizations providing social support to people in difficult life circumstances, social adaptation and psychological support centers, etc.) but also the private ones (legal entities, individuals, and individual entrepreneurs). 

Additionally, the conditions for all social service providers to access preferential rent (at a rate of 1% of the rental object’s value) have been simplified. Previously, state and communal enterprises had to submit founding documents and an extract from the Register of Social Service Providers and Recipients to the property owner. Public organizations had to additionally provide an extract from the Register of Non-Profit Institutions and Organizations, an annual income usage report, a list of members with information on the amount of their contributions, and the amounts of charitable donations. In order to qualify for the preferential rate, it is now sufficient to be registered in the Register of Social Service Providers and Recipients.

Some experts assessed the change positively, as it will simplify the operations of social institutions and potentially increase their numbers, which is crucial during wartime and post-war recovery. Others assessed it negatively, arguing that the budget will lose revenue due to the expanded list of organizations eligible for preferential conditions.

Information about the Reforms Index project, the list of Index experts and the database of the regulations assessed are available here.

Chart 3. Value of Reform Index components and number of events

Reform Index from VoxUkraine aims to provide a comprehensive assessment of reform efforts by Ukraine’s authorities. The Index is based on expert assessments of changes in the regulatory environment in six areas: Governance, Public Finance, Monetary system, Business Environment, Energy, Human Capital. Information about the Reforms Index project, the list of Index experts and the database of the regulations assessed are available here.

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