The purpose of the RFP is provision of consultancy services within a frame of a project which will support development of several fiscal scenarios and a distribution formula based on the analysis and estimated revenue gaps of local authorities. The proposed model will make efforts to equalize or reduce the gap between the rich and the poor. This process will entail detailed analysis of the distribution of competencies between the central and local governments, individualized fiscal capacity assessment of municipalities; detailed assessment of the expenditure needs for local provision of social sector competencies; and developing a model/formula for allocation of inter-governmental transfers, which should ultimately reduce the gap between urban and rural communities.
In parallel, the project envisages a capacity-building component for central and local government officials for strengthening their analytical capacities on these issues. The emphasis will be on estimating expenditure needs of local government units, primarily for delivery of social services; assessment of fiscal capacities of local government units, etc.