Village of 3,000 Uses ¥1 Billion Digital Grant for New Projects

In the richest village in Japan in Hokkaido

Last year, on a variety show, Hokkaido’s Sarabetsu Village was introduced as the richest village in Japan with an excessively high annual income.

In fact, FRIDAY Digital has also covered this village, with a population of about 3,100, whose core industry is agriculture. Of course, not as the richest village in Japan, but as a municipality that has received over 1 billion yen in “Digital Rural City National Concept Grants” (Digital Den’en Kokka Kousou Koufukin), aimed at supporting initiatives for solving challenges and promoting regional revitalization through digital technologies.

In an article published in November last year titled “Consultants Swarming to Regional Revitalization Grants & Local Governments Being Exploited,” it touched on the “Super Village Concept” project of Sarabetsu Village, which is funded by the Digital Rural City Nation Concept Grants (Digital Den-en). The project is managed by a company called “Social Knowledge Bank LLC.”

Most of the project costs for the Super Village Concept are going to Knowledge Bank. The representative employee of this company is a construction consultant from Tokyo, Chojai Co., Ltd. (Chuo Ward, Tokyo), which has been leading the project since the planning stage. This consultant company is both the contractor of the project and also the client as the representative employee of Knowledge Bank.

A village council member criticized the project, saying, “There is a conflict of interest structure.” Since June last year, they have been asking for disclosure of the project costs and other details.

Two weeks after the article was published, Knowledge Bank finally released the business content and costs for fiscal year 2023 on their official website.

The list of project costs includes regional point issuance service / 45.79 million yen, no-wait medical services / 76.96 million yen, community-based transportation and logistics system / 96.35 million yen, and the operating costs list includes fun mahjong / 240,000 yen, fun karaoke / 900,000 yen, free smartphone lending / 4.65 million yen, etc.

The council member who had been asking for disclosure was furious, saying, “After the general account budget for fiscal year 2023 was passed in the September council meeting, it’s strange to release the breakdown of the project costs afterward, like a late disclosure.”

That being said, it is puzzling that projects funded by the Digital Den-en grants include mahjong and karaoke services. Other expenditures include the purchase of 800 used smartphones to be lent out for free, rental and experimental use of delivery robots that are unlikely to be used on snowy roads.

“Do the residents of Sarabetsu Village understand the grant projects and actually use the services to see their effects?

If not, for example, the unused delivery robots may end up as a waste of the grant funds. The used smartphones might eventually have to be sold to disposal companies or disposed of.”

This is pointed out by Professor Taku Konno of Nihon University, an expert in accounting, local government audit practices, and internal control.

“Based on what I’ve read from articles about Sarabetsu Village, including other media, the village mayor seems like a very positive and motivated person. The efforts of local government leaders are important, so being proactive is good. However, unlike the CEO of a company, there’s no need to take on the kind of risk involved. After all, it’s taxpayers’ money.

The consultant company, which is the contractor, is the one actually driving the Super Village Concept in Sarabetsu Village. However, the ultimate responsibility lies with the contracting party, Sarabetsu Village. It can’t be dismissed by saying, ‘We left it to the consultants.’

Prime Minister Shigeru Ishiba made a statement at a cabinet meeting on regional revitalization last year, saying, ‘It is very bad if every town relies on Tokyo consultants.’ The Prime Minister must be fully aware of this.” (Professor Taku Konno, hereafter the same)