FINANCIAL MECHANISMS OF STATE SUPPORT FOR THE DEVELOPMENT OF TERRITORIAL COMMUNITIES IN THE CONDITIONS OF DECENTRALIZATION

Abstract

The article is devoted to highlighting the problems of formation and development of united territorial communities (UTCs) as financially independent mechanisms and indicates the possibility of solving these issues through alternative sources of financing, such as funds with a foreign share and national funds that organize competitions for the selection of projects. It has been proven that such projects not only relieve the budget of Ukraine from subsidies, but also contribute to a change in the public thinking of the population, which is relevant in today's conditions. It is claimed that the most significant source of external financing for newly created UTCs is state budget funds. As a result of the study, the risks associated with the formation of capable territorial communities were identified, and the main directions for their leveling were indicated. It is shown that the risks can be reduced by completing the stage of voluntary association of territorial communities and moving to their consolidation based on economic feasibility, social compatibility and financial capacity according to clearly defined criteria. The article describes the main mechanisms of state financial support for the development of UTCs. The revenues and expenditures of the local budgets of the Vinnytsia region for the period from 2014 to 2021 have been analyzed. The necessity of state financial support for the newly created UTCs at the initial stage of their activity has been proven. The strategy of the State Fund for Regional Development (SFRD) until 2027, which is aimed at increasing the competitiveness of regions, has been analyzed. As part of this strategy, it is planned to expand the practice of creating Creative Economy Development Centers even in small cities. This will help increase investment attractiveness and promote business development in the creative sector of the economy of each individual community. Deficiencies in the functioning of the mechanisms of state financial support for the socio-economic development of UTCs were revealed, such as the preference of socially oriented projects over economic ones, the imperfection of the formula for distributing subventions for the creation of UTCs infrastructure, an opaque mechanism for distributing subvention funds for the socio-economic development of individual territories, a low level of co-financing of projects from local budgets and others. Attention is drawn to the expediency of a gradual transition from the provision of ready-made financial resources from the state budget of the UTCs to the creation of conditions for the activation of communities in the direction of increasing their investment attractiveness.