Scared councils stifle growth
Since 2011, local councils have spent six billion kroner less than they are allowed to under the spending cap set by the government.
The Economy Ministry predicted that councils would start spending more of the 35 billion kroner they have saved up, but others said that fear of Draconian sanctions if they went over budget meant that councils would continue their thrifty ways.
Since 2009, it has been possible for the government to cut funding to councils that overspend.
According to AE, a left-leaning think tank, in 2012, 89 of the nation’s 98 local councils ended the year under budget. Had councils spent all the money available to them, it would have resulted in the creation of 10,500 jobs, AE calculates.