Government and municipalities agree to new financial framework – The Post

Government and municipalities agree to new financial framework

Freed-up funds going to welfare, elderly, public school and children

The finance minister, Claus Hjort Frederiksen, wants tax payers’ money spent where it is needed the most (photo: Johannes Jansson)
July 3rd, 2015 2:09 pm| by Christian W

The government and the local council organisation KL have reached an agreement for the municipal financial framework for 2016.

A tight financial framework and an efficient public sector will be the order of the day over the coming years, and the negotiations yielded an annual re-prioritisation contribution from the municipalities of 1 percent over the next four years from 2016-2019.

Following the state’s lead
The freed-up funds will be earmarked for prioritised efforts such as welfare, the elderly, public schools and children.

“We need to keep ensuring that the tax payers’ money is spent where it is needed the most,” said the finance minister, Claus Hjort Frederiksen.

“It’s important that the entire public sector contributes to free up the funds that can be used for prioritised areas such as health, elderly and security. Re-prioritisation has been an implemented principle of the state for many years, and now it’s spreading to the municipalities.”

The agreement for 2016 includes:


– 1.9 billion of the municipal priority contribution being moved to priority efforts in the public service areas, such as the elderly, children and public schools

– Municipalities’ investment will consist of 16.6 billion kroner in 2016

– An extraordinary financing grant of 3.5 billion kroner will be established in 2016 – 2 billion of which will be dispersed based on the fundamental economic conditions of the municipalities

– A loan pool of 500 million kroner will be set aside to strengthen the liquidity of financially-fragile municipalities

– The extraordinary integration grant of 200 million kroner and the 125 million kroner investment grant will continue into 2016 in order to support the municipalities receiving and integrating refugees

– In September 2015, the government and KL will discuss a number of themes, including co-operating about streamlining and digitalising, as well as specific proposals for rule simplifications, which will give the municipalities improved management and priority options