John Mbadi the Cabinet Secretary for National Treasury and Economic Planning.
More than 11,900 former councillors now risk missing out on their Sh2.38 billion ex-gratia payments because there is no legal basis for the payment, National Treasury Cabinet Secretary John Mbadi has said.
The development comes after plans to pay the ex-gratia to former councillors who served for less than 20 years were blocked by a legal opinion from the Attorney General's (AG) office.
This comes after senators raised a storm over the AG's move to cancel the proposed payments to the ex-councillors, following a Senate resolution in October 2018.
The former councillors started the push for the government to clear the one-off honoraria in 2013, with the former councillors, who served at various times between 1963 and 2012, initially seeking an honorarium of Sh1.5 million each.
Sh550,000 each
However, a task force set up to look into their welfare recommended that they be paid Sh550,000 each before the National Treasury further reduced the amount to the current Sh200,000.
Appearing before the Senate on Wednesday, CS Mbadi said the delay in paying the former councillors their gratuities and pensions was due to an existing legal opinion that there was no legal basis to support the proposed one-off payment of gratuities.
The CS said a legal opinion dated May 8, 2023, by then-Attorney General Justin Muturi advised that there was no legal basis to support the proposed payment of Sh200,000 to each of the 11,919 former councillors who served for less than four consecutive terms.
Public Service and Human Capital Development Cabinet Secretary Justin Muturi addressing journalists at Serena Hotel, Nairobi, on January 12, 2025.
He said the advice referred to a circular No. 1394 issued by the then Ministry of Local Government, which limited the payment of pensions or gratuities to councillors who had served for 20 years or more continuously as at December 13, 1993.
The minister said the legal advice also highlighted the lack of a structured formula for determining the benefits as councillors were not paid salaries but received allowances that varied from region to region.
"Consequently, the implementation of the proposed payment of Sh2,383,800,000 to 11,919 former councillors lacks the necessary legal and policy basis," Mr Mbadi said.
But the former Suba South MP's response drew the ire of senators, who sagovernment to find a way to pay the ex-councillorsid the House should not legislate in vain and urged the
Meru Senator Kathuri Murungi said if the delay was mainly due to legal constraints, it was up to the AG to come up with a legal framework to pave way for the payment.
"This is the first time we have heard of a legal opinion from the AG. We don't know what happened from the time the matter was canvassed to the time of the AG's legal opinion and who is trying to frustrate the councillors," said Mr Murungi.
He urged the minister to set aside the legal opinion and proceed with the settlement of the outstanding payments to the ex-councillors.
"I don't have the authority to overrule a legal opinion from the Attorney General because he is the legal adviser to the government. The AG must have been informed by the clear basis of the law," Mr Mbadi responded.
"It is up to this House to come up with a legal framework to allow for the payment of the former councillors. If they are to be paid, then the law must be amended," he added.
The CS argued that the Senate had only passed a motion, which remains a mere intention and has no legal basis to trigger the withdrawal of public funds.
"If it were a law passed by the House of Representatives, it would be legally binding. But where we are, there is an intention to pay the former councillors but we lack the legal framework," he said.
Ex-councillors
But Senator Murungi hit back, saying it was not just a motion but an inter-ministerial taskforce that agreed on the payments to the ex-councillors.
Meru Senator Kathuri Murungi .
He said the taskforce included the ministries of National Treasury, Devolution and ASAL as well as Labour and Social Protection, with former ministers Ukur Yattani, Eugene Wamalwa and Simon Chelugui.
"This was not a motion but a resolution of the inter-ministerial taskforce. The taskforce made proposals and the three ministers added their signatures to the amount of money to be paid to the ex-councillors," he said.
Senator Ledama Olekina.
Narok Senator Ledama Olekina added that the three ministers even promised to table a joint cabinet memo to include Sh2.68 billion in the budget for the financial year ending June 2023 to pay the ex-councillors.
Of the amount, Sh218 million was to go to 328 former councillors who served for four or more consecutive terms.
"When did things change? I remember that even when the immediate former Finance CS Njuguna Ndung’u appeared before the Senate Committee on Labour, he did not tell us about the existence of such a legal opinion," he said.
But CS Mbadi argued that the report of a taskforce is not binding because it has no power to make such a provision to approve payments other than Parliament or express authority from Parliament.
"This task force remains a task force, and its report should be implemented procedurally. The report should have been followed by legislation to enshrine it in law, but that has not been done," said CS Mbadi.
"It is not in my interest to deny former councillors what is rightfully theirs, but what I am stressing is that it is desirable to pay them because many are suffering, but we have to do it within the law," he added.
However, he said that given the legal constraints, the Treasury has considered an alternative approach through the Inua Jamii programme, where councillors who meet the eligibility criteria under senior citizens will form part of the persons to be included in the programme.
