Special Grants to the Settlements

In the coming weeks, the Knesset is expected to approve the 2025 budget. Members of the Knesset will be required to approve a long list of thousands of budget lines that are supposed to detail the government’s policy and intentions for the coming year. However, the budget approved by the Knesset is not always the budget that is actually implemented, as the government makes far-reaching changes to the budget during the budget year.

To illustrate this point, we examined one budget program, Program No. 181102 “Regional Grants” in the Ministry of the Interior budget, which deals with unique budgeting for local authorities on a geographical basis. The data was collected with the help of Ofer Shechner of the Berl Katznelson Center.

Officially, government grants to local authorities in Israel are supposed to be equitable and based on criteria of the various characteristics of the authorities (economic situation, distance from the center, etc.). In order to allow extra budges to specific localities, the government decided on a series of unique grants that are intended for local authorities on a geographical basis, most of them are for Israeli settlements in the West Bank.

When the Knesset approved the original budget for the Ministry of the Interior’s Regional Grants in recent years, it stood at approximately 150 to 215 million NIS. However, at the end of the year it turned out that in reality the government spent double the amount, approximately 300 to 400 million NIS.

Program No. 181102 – Regional Grants – Budget vs. Execution:

In the 2025 budget proposal, the Regional Grants program stands at ₪113 million.

Special Budgets for Settlements

Most of the budget articles in the Regional Grants Program are intended for settlements. Between 2021 and 2023, 8 articles were intended for settlements, 3 articles were intended for the Israeli localities close to Gaza Strip, and 2 articles were intended for localities in the north and in the south.  Through these articles, the Ministry of the Interior granted nearly half a billion NIS (441 million) in special funds to West Bank settlements over three years, while the total budget approved in the original budget for the settlements articles was only 60 million NIS. In other words, the actual implementation was more than 7 times the original budget.

In contrast, in the articles dealing with the Gaza Envelope, in the north and south, the implementation was closer to the original budget, with 121% implementation in the three years (i.e. 1.2 times the original budget).

For a list of the main articles in the budget program, see below.

Examples of grants in the years 2021 – 2023:

Oslo Grant – The Oslo Grant is a financial grant that the authorities in the settlements have received since the Oslo Agreement, as a kind of “compensation” for the agreement they opposed. In the original budget it was between 1.2 million NIS to 1.6 million NIS per year. In practice, the government allocated NIS 17.6 million to the authorities each year, about 11 times the original budget.

Security grant for regional councils in Judea and Samaria – This grant has been in the budget at least since 2015 and is given to settlement authorities under the pretext of security. As far as Peace Now knows, the local authorities are not obligated to spend the money specifically on security needs, but it is added to them in the general budget. In the years 2021-2023, the original budget in this article was between NIS 7.4 and 10.1 million per year. In practice, the government allocated between NIS 35.5 and 39.2 million per year to the settlements, about 4-5 times the original budget.

One-time security grant to local authorities in Judea and Samaria – In addition to the above security grant, the government also provides an additional security grant. This grant is called a “one-time grant,” even though it has been given to the settlements every year since 2015. This grant was not included in the original budget, and was 0 shekels in all years of its existence, but in practice the government gave the settlements about 34 million NIS per year. In 2023, the amount was doubled and stood at 76.8 million NIS.

Development grants for young settlements in Judea and Samaria – This grant first appeared in the budget in 2017, but funds began to be transferred to local authorities in the settlements only in 2020. The term “young settlements” is used by settlers as an alternative name for “illegal outposts”. As far as Peace Now knows, this grant is also given to authorities for their general budget and has no restrictions on spending on a specific area. This article also includes authorization to commit (a budget for implementation over several years) amounting 6 million NIS, 83 million NIS, and 16 million NIS in 2020, 2022, and 2023, respectively.

From Budget Plan No. 181102 – Regional Grant

1. Examples of unique grants for settlements – original budget versus implementation – in millions of NIS

* The Ministry of Finance has not yet published budget execution data for 2024.

2. Grants to authorities in the Gaza Envelope, the South and North – original budget versus implementation – in millions of NIS:

* The Ministry of Finance has not yet published budget execution data for 2024.