regjeringen.no (10.11.2020) In the supplementary issue, the government proposes that the municipal sector receive an extra NOK 7.3 billion in 2021 . The municipalities receive NOK 6.2 billion. 4.4 billion will be given as an increased population subsidy, while NOK 1.5 billion will be distributed as discretionary funds. In addition, the municipalities receive NOK 321 million from the framework grant for positions related to compliance with the rules for events, restaurants and employees.
In the supplementary issue, the government proposes that the municipal sector receive an extra NOK 7.3 billion in 2021 . The municipalities receive NOK 6.2 billion. 4.4 billion will be given as an increased population subsidy, while NOK 1.5 billion will be distributed as discretionary funds. In addition, the municipalities receive NOK 321 million from the framework grant for positions related to compliance with the rules for events, restaurants and employees. One billion is dedicated to compensate kindergartens and schools that were closed.
The municipal economy during the corona crisis
News | Date: 10.11.2020
The corona crisis has major consequences for the Norwegian economy and affects all industries and sectors throughout the country, including the municipalities. The government has therefore stood up for the municipalities through several packages of measures during the corona pandemic.
- The government parties make it possible for the municipalities to invest in good kindergartens, knowledge in schools and quality in the health and care services, in addition to dealing with a demanding pandemic, says Minister of Local Government and Modernization Nikolai Astrup.
Today, the government presents a proposal for an additional number to the state budget for 2021 with further measures aimed at the municipal sector.
Here is a comprehensive overview of the most important allocations to the municipal sector during the corona pandemic:
Early out with measures
As early as March 13, the day after Norway shut down, the government proposed allocating more money to the municipalities to cover extra expenses in connection with the outbreak.
So far this year, the municipal sector has received more than NOK 17.7 billion in extra transfers and measures during the corona pandemic.
The municipalities and county municipalities have, among other things, received NOK 11.5 billion as compensation for the virus outbreak. The money will, among other things, cover the municipalities' lack of income from parental payments for daycare and after-school care, a decrease in passengers in public transport and expenses for cleaning and infection control.
In addition, the government has provided funding for activity-promoting measures. Among other things, the municipalities have received NOK 2.5 billion in maintenance and rehabilitation grants to get the wheels in motion after the crisis.
Discretionary funds for the municipalities that are hardest hit
The government is concerned that the municipalities that are hardest hit will also receive the most help. The working group's report indicated a good match in macro between the compensation provided and the sector's total expenditure. The situation in the various municipalities still varies a lot, both due to the infection situation and other conditions, e.g. to be able to follow up the TISK strategy in the event of a major outbreak.
Since the pandemic started, a total of NOK 1.3 billion has therefore been allocated over the discretionary funds to be distributed by the county governors. Before Christmas, almost 900 million kroner remains to be distributed to municipalities that have had particularly large extra expenses related to the corona crisis.
The government will consider additional discretionary resources for the municipalities in the new aging of the 2020 budget later in November. These will be based on the county governors' mapping of which municipalities have had particularly large costs as a result of the corona crisis.
It has been difficult to get a good overview of what the pandemic costs the municipalities. The government has therefore established a working group together with KS, which will map the economic consequences of the corona crisis. The working group will work until August 2021.
The working group submitted the first interim report on 16 October . They estimate that the financial consequences for the municipal sector are NOK 8.8 billion. The estimate includes additional expenses, minor income and lost tax income. The group has also taken into account savings as a result of lower wage and price growth and reduced employer contributions.
- The state and KS agree that there is a good match between the compensation from the state and the municipal sector's total expenditure during the corona crisis. At the same time, we know that much is uncertain, and that some municipalities have had higher expenditures than others. Going forward, we must therefore target the efforts towards the municipalities with the biggest challenges, says Astrup.
NOK 7.3 billion more in 2021
When the state budget was presented in October, the government said that an additional number would come later, ie an extra chapter to the state budget.
In the supplementary issue, the government proposes that the municipal sector receive an extra NOK 7.3 billion in 2021 . The municipalities receive NOK 6.2 billion. 4.4 billion will be given as an increased population subsidy, while NOK 1.5 billion will be distributed as discretionary funds.
In addition, the municipalities receive NOK 321 million from the framework grant for positions related to compliance with the rules for events, restaurants and employees.
The government also proposes that the county municipalities receive NOK 950 million in increased discretionary subsidies to cover lost ticket revenues in public transport, reduced user payments in the dental health service and additional expenses in upper secondary education.
The government is also proposing NOK 100 million so that more people can use the adult right to upper secondary education.
Based on working group calculations
The appropriation proposals will cover additional expenses and lower income related to the corona pandemic in the first half of 2021. The proposal is based on the working group's calculations.
But there is reason to believe that the municipalities' expenses for the work with infection detection and testing will be higher in the first half of 2021 than in the autumn when the working group made its report.
Therefore, the government proposes that the municipalities receive NOK 1.4 billion more than the working group's calculations suggest. This is also justified by the fact that the government is concerned that the services offered to vulnerable groups and children are not downgraded, even though corona management requires extra resources.
The additional allocation is in addition to the proposal of NOK 1.25 billion to the county municipalities for lost ticket revenues, and NOK 100 million to habilitation and relief services for children and young people with disabilities. These proposals were presented in the government's proposal for the state budget earlier in October.
In total, the municipal sector will thus receive around NOK 8.6 billion as compensation for the corona outbreak in the government's proposal for the state budget for 2021.