With $75 million in budget cuts, UN forced to reduce services – top finance official

Cutting services was the only realistic choice facing the United Nations after the General Assembly, the Organization's main legislative body, reduced by $75 million Secretary-General Kofi Annan's proposed budget for the next two years, the UN's top finance officer said today in New York.

Under-Secretary-General for Management Joseph E. Connor told a press briefing at UN Headquarters that recent service cuts were not in contravention to the Assembly's budget resolution, but rather, in fact, had been taken to comply with it.

In addressing concerns about the measures, which were announced on 28 February, Mr. Connor said last December the Assembly, on the unanimous advice of its Administrative and Budgetary (Fifth) Committee, had adopted a budget of $2.625 billion - some $75 million below the Secretary-General's proposal. When making that decision, the Assembly did not reduce or abolish programmes.

Instead, the Assembly made across-the-board "objects of expenditure" reductions and changed the vacancy rate to more closely track actual expenditures. It was therefore the responsibility of the Secretary-General to administer the budget within the level decided by the Assembly and to take the necessary measures to do so, Mr. Connor said.

With the Assembly's explicit instruction as to where the reductions should be applied, there was no room left for manoeuvre, the Under-Secretary-General said. As a result, the choices facing the Secretariat included a big increase in productivity, a reduction in services, or overspending; realistically, the only option was to cut services since during the last three budget cycles many increases in productivity had been achieved to cope with the stagnant budgetary level. In the current biennium, additional productivity increases were unlikely.

Mr. Connor noted that in presenting his budget proposal, the Secretary-General had told the Fifth Committee that further budgetary constraints would "seriously compromise our ability to deliver the services expected from us," particularly with Member States imposing new mandates on the Organization.

It should not come as a surprise that, with the reductions made by the Assembly, it was impossible to accomplish everything in the budget and provide all the services anticipated, especially in view of the fact that those reductions were heavily tilted towards the area of services, Mr. Connor said.