The government has called a press conference at 11:45, where Minister of Local Government Erling Sande (Sp) and Deputy Leader of the Labour Party Tonje Brenna will present a proposal to improve the economy of the municipalities.
According to NRK, a photo shared on social media featuring Minister of Labor Tonje Brenna (Ap) indicated they are providing an additional 5 billion. The photo is reported to have been deleted immediately.
– 5 billion in permanently increased transfers will not solve all the challenges. Even with this extra funding, many municipalities will still have to make tough local priorities, it states on the sheet Brenna is holding in the picture, according to NTB.
Sande now confirms the amount to NTB, stating that it is about 5 billion this year. Additionally, more billions will come next year.
– We will contribute to the municipalities in the demanding situation they are in. It is important to ensure safe kindergartens, good schools for our youth, and quality elderly care throughout the municipalities. We will return to the details in a press conference later today, says Minister of Local Government and Regional Development Erling Sande.
6.8 billion in the budget proposal
In the proposal for the state budget for 2025, the government suggests increasing the so-called free revenues for municipalities and county municipalities by 6.8 billion kroner. Of these billions, 3.2 will cover additional costs for pensions, leaving 3.6 billion for free use.
However, according to the interest and employer organization for the municipal sector, KS, municipalities are already short 10 billion this year, and it could rise to as much as 15 billion.
Deputy Leader of the Conservative Party and spokesperson for financial policy Tina Bru reacts to what they call a crisis package.
– It is becoming a very clear pattern. The Støre government is engaging in yo-yo management of our welfare. It was less than a month ago they presented the budget for next year, and already now they have to patch their own proposal with crisis package after crisis package. So far this year, they have been scrambling for the child welfare system and municipalities with money because they have done such poor work from the start.
– In previous years, they have grossly missed cost estimates, refused to update estimates for refugees, underbudgeted the police, child welfare services, and hospitals. There is no limit to how little control the Støre government has over its budgets. First, they create problems by giving too little money from the start and cutting down on private actors. Then they try to tighten up on increasing costs. And then they scramble for more money when their own problems catch fire. This is completely unpredictable for everyone working to secure our welfare.
KrF: – Have a few hours to fix the amount before the press conference
Dag Inge Ulstein, leader of the Christian Democratic Party (KrF), reacts to the fact that it seems the municipalities will only receive 5 billion.
– KrF has said that we need at least 10 billion to meet the needs present in the municipalities. If it is true that 5 billion is coming from the government, then that is far from enough. Now the government has a few hours to fix the amount before the press conference; they should seize that opportunity, he says, and continues:
– It is a dramatic situation in municipal Norway. Cuts in elderly care, in nursing homes, in schools and kindergartens are being planned; if the government hesitates more, it will be too late.
Rødt: – Good and necessary, but not enough
On the other hand, Rødt is pleased that the government is taking action.
– There is a crisis in everyday welfare in municipalities. More and more are reporting that they must make significant cuts and closures in kindergartens, nursing homes, schools, and elderly care, says Member of Parliament Tobias Drevland Lund (Rødt).
– It is certainly good and necessary that the government gives the municipalities 5 billion kroner more in the revised budget for 2024. Rødt will support this in the Parliament. However, it is obvious that more money must be put on the table for the municipalities for next year as well. Therefore, Rødt will continue to fight for our municipalities to have greater room for action to provide good services to their residents across the country, regardless of their postal code.
Interview Between Time.news Editor and Economic Expert
Time.news Editor (TNE): Good morning, everyone! Today, we have an exciting discussion ahead of us. We’re joined by Dr. Lena Haugland, an expert in municipal economics, to unpack the recent announcements from the government regarding support for municipalities in light of pressing financial challenges. Welcome, Dr. Haugland!
Dr. Lena Haugland (LH): Thank you for having me! It’s great to be here to discuss such a pertinent topic.
TNE: Just yesterday, Minister of Local Government Erling Sande and Labour Party Deputy Leader Tonje Brenna announced a proposal to increase transfers to municipalities by 5 billion kroner for this year. What were your initial thoughts on this announcement?
LH: It’s certainly a step in the right direction. However, the additional 5 billion is only a short-term fix. Many municipalities are struggling with significant budget deficits—KS estimates these could be as high as 15 billion kroner. So while this funding helps, it will not resolve the systemic challenges that many municipalities face.
TNE: That’s an important point. In the proposal, there are additional increases in the budget for the following year, amounting to around 6.8 billion kroner. How do you see this affecting municipal budgets in the longer term?
LH: The proposed budget increase could provide some relief, especially with 3.6 billion earmarked for free use. However, municipalities are still facing rising costs, particularly in areas like pensions and social services. Without adequate long-term planning and sustainable funding, these increases might just be temporary relief rather than a solution.
TNE: Minister Brenna noted that the government seeks safe kindergartens, good schools, and quality elderly care. In your experience, what are some core challenges that municipalities encounter in providing these services?
LH: The challenges are multifaceted. Many municipalities struggle with resource allocation amidst rising operational costs. Facilities like kindergartens and schools require not only funding but also trained personnel to meet quality standards. Additionally, the demand for services—especially in the elderly care sector—is rising significantly due to demographic shifts. Failing to address these factors means the funding increases could be insufficient.
TNE: The opposition has been quite vocal about what they perceive as the government’s inconsistent budgeting practices. What are your thoughts on the criticism from the Conservative Party regarding the “yo-yo management” of welfare?
LH: The criticism points to a significant concern many observers have regarding fiscal stability. It can create unpredictability, which is detrimental for municipalities trying to plan their budgets effectively. If the government frequently alters funding levels and fails to update cost estimates, it undermines the ability of local authorities to manage their finances and create long-term solutions.
TNE: It sounds like a complex balancing act for the government. As we look to the press conference later today for more details, what outcomes should we be watching for that could benefit municipalities?
LH: I think we should look for a clear outline of how those additional funds will be allocated, especially if municipalities will have the flexibility to use the funding where it is most needed. We should also expect to hear about plans for future budget stability and any measures to prevent similar funding crises down the line. Ultimately, sustainable solutions will require transparency and community involvement in the budget process.
TNE: Thank you, Dr. Haugland, for providing us with such valuable insights into this evolving situation. It’s clear that while the government’s intentions may be good, the execution and long-term planning will make all the difference for the municipalities.
LH: Thank you for having me. I look forward to seeing how this unfolds and its impact on local communities.
TNE: And thank you to our audience for joining us for this discussion. We’ll continue to cover this story as more information becomes available. Stay tuned!
