A common challenge for health sector planning and budgeting is the misalignment between policies, technical planning and budgetary allocation; and inadequate community involvement in priority setting. Health system decentralisation has often been promoted to address community participation, accountability and technical efficiency in resource management. In 2010, Kenya passed a new constitution that introduced 47 semi-autonomous devolved county governments, leading to a substantial transfer of responsibility for healthcare from the central government to these counties.

This study analysed the effects of this major political decentralisation on health sector planning, budgeting and overall financial management at county level. Qualitative data were collected over 18 months through document reviews, key informant interviews, and participant and non-participant observations.

The study revealed that the implementation of devolution created an opportunity for local level prioritisation and community involvement in health sector planning and budgeting hence increasing opportunities for equity in local level resource allocation. However, this opportunity was not harnessed due to accelerated transfer of functions to counties before county level capacity had been established to undertake the decentralised functions. Some indication of re-centralisation of financial management from health facility to county level was also observed.

In acknowledging the political nature of decentralisation polices, the paper recommends that health sector policy actors develop a broad understanding of the countries’ political context when designing and implementing technical strategies for health sector decentralisation.