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The main topics discussed at the meeting were increasing the salaries of public sector employees, addressing shortages of day-care facilities, relocating people from unfit housing, providing better housing for large families, and paying monthly child benefits to families for the third child and subsequent children.

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President of Russia Vladimir Putin: Good afternoon, colleagues,

A federal budget has been approved, and we recently discussed its priorities with the leaders of parliamentary parties. In general, our citizens took a positive view of what has been proposed during the election campaign, and these proposals have also been outlined in the presidential executive orders of May 7, 2012. Why do I say this? The point is that the priorities of the federal budget have been set, and I asked you to meet today to assess the situation with regards to regional budgets. We need to understand what’s going on in the regions, since much of the work to meet the government’s commitments to its citizens occurs at the regional level. And it is very important to set the right priorities and to do so promptly, bearing in mind that we are currently working on the regional budgets. These are the issues we are going to discuss today.

I would suggest focusing on the following key topics. We’ll talk about a number of issues. First, wage increases for public sector employees. Already in 2012 the teachers’ wages should reach the average for each particular region, and by the beginning of 2013 the wages of preschool teachers will reach the ​​general education sector’s average. I know that we only started this work – in some regions at least – in September and October, so I understand that it is not possible to reach Russia’s average in 2012. But in 2013 the average wage in the ​​general education sector should be equal to the average wage in Russia. And we will be monitoring this. I would ask the relevant ministries and agencies to address the problem accordingly. Let me repeat, in 2013 the wages of preschool teachers – and I just said this – must be raised to reach the average level for the ​​general education sector.

Wage targets for other categories of public sector employees have been up to 2018. In this regard, I want to stress that the regions and budget organisations must clearly understand that wage increases depend on structural changes in the social sphere, and these systemic issues must be addressed right away. This has become a proverb already; we have been talking about it for years now, saying that wage increases must go hand in hand with structural changes. And I, your faithful servant, have repeatedly discussed this with heads of various government agencies, and not with one or two people but with associations such as the Russian Rectors’ Union. Everyone understands that structural changes are necessary but, to speak frankly, nothing serious is happening in this area.

Let me also remind you that the Government together with the regions must draft regulatory documents to gradually increase the wages of cultural sector employees. This work must be completed as soon as possible. When we met with our colleagues in the Council for Culture and Art, we talked about how this work will begin in January 2013 and wages in federal cultural institutions should increase by as much as 30 percent. I know that not all preparations have been completed so far, and that the [Culture] Ministry is planning to do so in February and March; I expect that it will be done at this time.

Each region should have its own plan of bringing the public sector wages to the region’s average by 2018. Today I would suggest that we talk about what is being done and how wage increases affect the quality and accessibility of cultural services, to take the cultural sphere in particular.

What else worries us? This October the teachers’ wages in most Russian regions have reached the region’s average wage level for 2011. But I would like to go back to this again: I know that some regions may not be able to achieve the national average this year, but I would draw your attention to the fact that almost all regional leaders said they would be able to. Okay, let’s see what happens in 2013. But it is absolutely clear that public sector wages in 2013 must reach the average wage level.

This year only ten Russian regions were able to pay their teachers according to the annual average required. Preschool workers are in the same position. Only in Moscow and Tyumen regions did their wages increase according to planned indicators and even surpass them a little bit.

Of course the overall trend is positive, but if you look at individual regions, dynamics vary a great deal. Thus when comparing October 2012 and October 2011, teachers’ average wage increases range from 2 percent in the Nenets Autonomous Area to 53 percent in Magadan Region, though of course the base indicator was different in Magadan and initially wages there were very low. Nevertheless, we must find a comprehensive solution to this problem. Again, I would repeat that subsequent wage increases must be linked to structural reforms in public sector industries.

Today I would like to hear whether federal agencies have developed guidelines to oversee these transformations and whether this information has been passed on to all of Russia’s regions. How and how fast are regions planning to carry out structural reforms and, accordingly, enable the average wages of public sector employees to achieve desired indicators? We need to analyse all these issues in detail and to work on them. We also need to look at regional budget spending in general, and to know precisely what funds have already been allocated for these purposes. The Finance Ministry has such information.

The second issue we will discuss today is addressing shortages of preschool facilities. Starting from 2007, the number of children in Russia has been growing every year and, naturally, this is a very good thing. In the first 10 months of this year 7 percent more babies were born compared with the same period in 2011, and in absolute terms this amounts to more than 101,000 babies. Of course this is good. But what does it mean? Regions and municipalities must keep up with this growth, take into account demographic projections, have an adequate number of preschool facilities operating, allocate the required funds for these purposes, support private enterprise and competition in this sector, create the conditions for and promote the development of non-governmental forms of preschool education, and provide for multipurpose use of buildings and facilities when constructing new preschools.

Lately, the situation with preschool facilities has improved a bit. However, in some regions this problem remains acute. Together with childbirth, this issue is a crucial one for our country. To this end, the Government is considering further support for the regions in 2013, but in this connection I would like to say the following: naturally we must look at health and safety rules and regulations that are considered too stringent – many experts talk about this, and in the regions I visit governors and local leaders are constantly talking about this too. As I already said, we have to look at various forms of preschool education and to provide support where it is needed. Naturally, not to everyone indiscriminately, but to the regions that need this support the most.

I would ask the Finance Ministry to keep a sharp eye on the extent to which the regional budgets are balanced. Any allocation of additional resources while implementing a budget must take into account the actual needs. And if new facilities are being built, we will require a detailed financial feasibility study, design and construction documents. Naturally, it is impossible to build anything without these documents, but the construction is needed. It’s only that everything should be done in a timely fashion.

The third topic is relocating people from unfit housing. Together with the regions, the Russian Government must develop corresponding measures by March 2013. At present the total area of housing classified as unfit as of January 1, 2012 amounts to more than 10,000,000 square metres, and it houses more than 650,000 people. Estimates for their relocation total about 364 billion rubles. The federal budget has already provided 159.6 billion rubles for projects overseen by the Housing and Utilities Reform Fund. True, we agreed that some of these funds should be spent on major repairs so there will be less funds to be used for relocating people from unfit housing. According to the Fund, these amounts will allow us to relocate about 300,000 people occupying a total area of approximately 4,500,000 square metres. But we must have a thorough understanding of the situation in the regions, understand whether regional budget funds have been allocated for this purpose, and what other mechanisms may be involved; we must understand and know all this. Let me remind you that we will be resolving these problems together with the regions.

The fourth item on our agenda is providing better housing for large families. This issue is complex and progress here is very slow, especially with regards to providing such families with plots of land for individual housing construction and creating the necessary infrastructure. I will not cite any figures but a considerable number of large families (in total Russia has about 966,000 such families), more than 128,000, would like to get a plot of land, but this still poses significant challenges. I propose that we discuss available options to help large families improve their living conditions, and the extent to which regions are willing to provide them with financial and other resources.

The next issue is assistance to large families in those regions where the demographic situation is worse than the national average. I stressed this in my pre-election articles, during meetings with relevant officials, and it is also mentioned in my executive orders. To be honest, we have 50 regions with negative demographic trends, most of them located in the Central, Northwestern, Volga and Far Eastern federal districts. The federal budget allocates extra funds to these regions to co-finance their obligations to pay monthly child benefits to families for the third child and subsequent children. I would ask you to report today on whether the regions have made provisions in their budgets to meet these obligations.

Colleagues, as I already said, today we need to discuss whether or not our regions are fully integrating the priorities outlined in my executive orders into their budgets. And in connection with this, we must determine which costs must be cut. The issue of regions taking out loans requires continuous monitoring. I would ask the Finance Ministry to report today on the status of that particular problem.

In recent years, Russian regions and publicly funded institutions have had more independence to allocate their resources. We have moved away from estimated funding. This is certainly a good policy, but it must be supplemented by mechanisms that allow federal government to effectively monitor whether or not certain desired indicators are being achieved.

Incidentally, we gained this experience while working on the national projects and implementing regional programmes to modernise healthcare and education. In those cases, the federal authorities provided targeted subsidies in return for specific commitments. In general, the mechanism proved itself and functioned well. Now we need to adapt and improve these mechanisms in order to achieve a wider range of goals. Let’s talk about all of these issues today.

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