Transcript of the beginning of the meeting:

Vladimir Putin: Good afternoon, ladies and gentlemen.

This is our first meeting of the new year. Let us begin by discussing our top priorities and long-term goals, as is our custom.

I would like to begin with matters that might appear outside the purview of the federal government and the State Duma inasmuch as the law places them under the jurisdiction of the regional or municipal authorities. However, they are among our most pressing issues, and they concern every Russian citizen and every family. As you can easily guess, I am referring to the problems in housing and utilities. I remember well, and you certainly do, too, how housing and utilities fees skyrocketed at the beginning of last year. The leap was unfounded. That's what I would like to emphasise because it's what matters most: it was totally unfounded! The government had to intervene and force rates down where they were overinflated. In fact, we had to introduce new universal regulations on the matter.

I would also like to note that almost 30% of the letters, appeals and complaints to the government and its community liaison offices concerned housing and utilities in one way or another. People are anxious to see what will happen in the beginning of this year. They are wary of another rent hike. As you may remember, summary rent and utilities fees rose by 25% and even 70% in some regions at the beginning of last year. Let us call a spade a spade: some municipal bosses compensate for their incompetence by raising rent when they don't cover their bases in time.

Certainly, we cannot do without economically motivated adjustments – otherwise, the municipal economy will collapse due to inflation and other processes. But everything should be done in good time. Then, rises in rent will be gradual. People will understand them, and they will be affordable – linked directly to a rise in public income. To that end, the growth of public income should set the precedent for the inflation of fees and taxes, not the other way round. On the other hand, when relevant decisions are not made in time, we see no end to negative consequences.

Then there are the housing and utilities management companies. Their work needs supervision. We have every reason to believe that such companies are somehow closely connected with town halls in certain municipalities. As a result, these companies regard the municipal economy as their feeding trough. They never care about improving it. We discovered 1,193 communities where rent and fees rose by 25% or more at the beginning of last year, while 147 communities exceeded the regulations in place at the time. As I have said, we reacted severely. We took stock of practically every town hall's work until overinflated rents and fees were reduced.

Comprehensive decisions were made. In particular, we transferred consumption quotas for the housing and utilities sector from municipal jurisdiction to the regional level. That was a very important decision because, as you know, much depends on those quotas. They are among the principal levers of government over rents and fees. This decision was made to put an end to the discrepancies and blatant absurdities of the past. We also placed new demands upon management companies concerning the openness and transparency of their system for setting such fees. This was done to prevent arbitrary fees for such services as lights in building entrances, refuse collection and so on.

Action was taken to streamline consumption accounting. People should pay for real services, and they must be quality services. The government did not wait for the year to begin before it imposed a 15% ceiling on any hypothetical rises in rent and fees. As things stand, these fees might grow even less – by 13-14% – according to available federal and regional economic indices. I repeat: all relevant decisions were made well beforehand at the federal level in order to guide the regions and communities in planning their work, balancing their budgets and endorsing the necessary bylaws. I would like to stress that a government decision is not to be loosely interpreted.

As I have said, housing and utilities belong primarily to the jurisdiction of the regional and municipal authorities. Now, I would like to turn to affairs that directly pertain to the United Russia party and its arrangements and agencies. 

United Russia has representatives at almost all levels of government. In this regard, I would ask our deputies in the State Duma and Federation Council members, and our factions in the regional assemblies, to track everything that happens in this area very carefully, especially at the beginning of the year. You should always be on the ground in the regions to study the situation with management companies, work with municipal entities, meet with people, work with voters directly and quickly respond to the slightest complaint, the slightest violations that occur in this area. And in cases where violations are identified, where someone tries to pick people's pockets in order to make up for their own failures and sluggishness, they certainly should be rapped on the knuckles. You should harshly reprimand anyone who allows such deviations from the decisions made.

One more observation. At the end of last year and early this year, we had some anomalous natural phenomena – the so-called freezing rain – in several regions of Central Russia. According to our grid company, more than nine billion roubles was invested in the repairs of the damaged power grids and power facilities. This is a lot of money. However, I want to draw your attention to the following: despite these expenses, no one should raise the rates under this pretext because they are not factored into the tariff. Additional resources must be sought for this purpose – and not at the expense of consumers.

We have carried out power sector reforms and gave energy companies the opportunity to work in the market to attract investment. You just need to work, you need to look for funds to implement development programmes that invest in the revitalisation of grids and generating capacity. I reiterate – in this case, of course, not by increasing the tariffs. The money is not factored into tariff increases and should not be included in the price. I suggest that we meet again in a month and talk on this subject, analyse the situation and discuss it.

Another issue I would like to raise today is one we discussed a lot lately. The State Duma has adopted relevant resolutions to this end. I am referring to a programme of major social significance. I proposed it in April 2010 during a meeting with State Duma deputies. It is a regional programme of healthcare modernisation. These programmes will need to undertake capital repairs of hospitals and clinics, purchase new equipment, introduce new standards of medical services, and, of course, all this must be accompanied by further training of medical personnel. This, of course, entails salary increases for personnel, especially for top professionals. Because due to changes in the standards, there is an opportunity to influence  the process of increasing the salaries of health professionals, I want to emphasise this. We are allocating significant funds – 460 billion roubles over two years, and the money, of course, must be spent as efficiently as possible, with tangible, visible results for people. The necessary regulations are now being adopted. They should put up a barrier to all sorts of abuse, a barrier to the possible overpricing in the procurement of equipment and charging for repair work. Here, we also cannot do without effective public control.

Everything related to people’s quality of life and health is certainly one of the top priorities for the state and the United Russia party. Therefore, I ask the federal and regional branches of United Russia to establish effective public oversight over the implementation of regional healthcare programmes. You need to work closely with trade unions, associations of health professionals and, of course, work collectives. Moreover, I believe that we must take the initiative and invite other political parties into this partnership, all those who are willing to cooperate constructively in the interests of our citizens in addressing basic problems to improve Russian healthcare.

Mr Gryzlov, if you please.

Boris Gryzlov: Of course, these are two very important issues that you have raised, and they are of paramount importance for the party today. Regarding the situation with the growth in tariffs, we faced it head on last year and sounded the SOS without delay. We gathered an assembly of legislators – it was a teleconference to which we invited more than 10 regions of the Russian Federation. And we saw this situation on the ground, the party created a commission led by Vladimir Pekhtin, who visited more than 20 regions and several municipalities within each region. We identified the problems that led to higher tariffs in those specific municipalities. You said there were many more than 1,000 localities where tariff increases were 25% and more.

In a number of regions and municipalities we have brought down some of the already announced tariffs to a reasonable level. In some cities, we have been able to prove that the recommended rates were too high, for example in Samara. Some of the overeager officials had to be called to order. For example, we expelled the mayor of Petropavlovsk-Kamchatsky from our party. Later, that contributed to his resignation. Speaking of Samara, I would like to add that we had a new mayor elected there last March. The previous mayor, who represented the Just Russia party and who made a mess of tariffs, lost the campaign to our candidate, because we made tariffs acceptable to the city’s residents.

I think the commission that has been set up should continue its work. The next meeting of our parliamentary party must prepare for this situation in advance. We will issue all United Russia deputies the necessary instructions. Our regional week begins on January 29, the day utilities payment orders are delivered to residents, and all deputies will tour the regions to visit as many municipalities as possible to collect information.

You said that we will meet in a month when we have the full picture.  But I think we will not only have to monitor the situation but also to intervene. A law we have adopted makes it possible to resolve tariff issues at the regional level now, not the municipal one as before. Perhaps tariffs will now be raised in a more sensible way. The upper limit of 15% set today is quite acceptable. Utilities costs in an average Russian family’s budget make up just over 8.5%. And if this figure goes up slightly, every family can live with this. The main thing is to keep within the recommended 15%.

Vladimir Putin: Do you mean the overall payment? Or separate payments?

Boris Gryzlov: It is the overall sum, which can be slightly higher or lower.

Vladimir Putin: And the average overall payment?

Boris Gryzlov: The average overall figure must not be higher than 15%.

Now concerning healthcare modernisation. We are proud that you raised this issue in the State Duma last April when delivering a government report on 2009. With increased insurance contributions, including on health, we forecast to collect an additional 460 billion roubles in 2011-2012. What is important is that this money will not be just spent, but, as you suggested, will be funneled into healthcare modernisation. As soon as this idea was proposed, our party’s supreme council discussed plans for improving the quality of life and made the modernisation of health services part of this priority. We set up United Russia regional councils, which together with regional administrations, drafted proposals for healthcare modernisation in individual regions of the Russian Federation. It was a timely move and important since it often happens that a good idea is left unrealised because some steps fail to be made in time. Here, everything was done in good time.

But now, looking through the documents received, we can say that some adjustment is needed. I think this is important: basically most proposals concern health services in towns and cities, and fail to devote full attention to village health centres. It has therefore been proposed that with our rural population making up 27% of all Russia’s population, 20% of allocations should be provided for rural areas. The amount is lower than the population percentage, but it is still substantial. We realise that rural residents should not be neglected. Last year showed that if we are to have a good crop and meet food security targets, we must pay special attention to the countryside, which is precisely what we’re doing.

The second point concerns the information coverage of healthcare modernisation: there are very few proposals on it. That section receives inadequate attention. There are good suggestions on new equipment and organisational improvement of the system, but information coverage is lagging behind. I think the party should send the right signal and, if I may say so, force the regions to give some focus to this issue.  

Ceiling prices for equipment to be bought must be key as well. It is an open secret that in 2010 we had some glaring instances of CT scanners being purchased at overblown prices. These instances are being investigated by the Prosecutor’s Office at present. I think we should sum up the proposals from the regions, and derive an average price and perhaps even make centralised purchases of the equipment in order to drive the prices down. With every region holding its own tender, I think we’ll get a lesser effect. Also, equipment purchased should be installed on time. There must be no such glaring instances as one reported in the Dzerzhinsky District of Volgograd, when equipment worth almost 500 million roubles was stored for six months outdoors under tarpaulin because there was no place for it. We are well aware that our party must closely monitor these two areas, and we have the resources to do it. May I remind you that we have more than two million party members, and about 100,000 local branches – as many as there are polling stations in this country – and each branch is allocated to one station, as decided previously. So these 100,000 branches are able to reach for every household, every block of flats and every village.

Vladimir Putin: Thank you. Now let us go back to the first item. Here is what I would like to say. The things we are now discussing are reasonable tariffs. But it would be better still if we were not to discuss any raise in tariffs at all, or only their reduction. This is what we should aim at. But if there is no avoiding it, the changes must be economically justified and reasonable. Take such an odd thing as a thirteenth month payment order. Why not a fifteenth month order?  If you give people leeway, they could invent even a twentieth month order. This only speaks of the low standards maintained by relevant agencies. This is the thing I would also like to draw your attention to, and everything should be done to rule out their repetition. We need some legislative mechanisms at the regional or even federal level; let us give some thought to them. As regards healthcare, I said in my opening remarks that we should watch our prices, purchasing prices and repair prices for premises. That is important. We must do everything in our power for the funds allocated, which are substantial enough, to be efficiently spent so that people feel the benefits.