Municipalities receive €33 billion via 61 government grants

Heerlen receives €3,468 in government grants per capita. This is over 78 percent more than the national average of €1,947. Bloemendaal, Midden-Delfland and Blaricum are the only municipalities to receive less than €1,000 per capita (€895, €948 and €990 respectively). This information comes from the Atlas of Government Grants 2015, which is published today by COELO, the University of Groningen’s Centre for Research on Local Government Economics.

Heerlen’s weak social structure and its function as a centre for the surrounding area entails higher costs. In addition, houses there are worth less, which means less revenue in property tax. This explains the high amount that is paid to the municipality. In proportion, large municipalities and municipalities in North-East Groningen, North Friesland and South Limburg receive a lot of money from the government (see attached map). The government expects municipalities such as Bloemendaal, Midden-Delfland and Blaricum, on the other hand, to have little in the way of expenses and to be able to collect more money through local taxes.

Dozens of grants

On average, municipalities cover only eight percent of their expenses with local taxes. Central government is their most important source of funding. This year they have received €33 billion from the government via 61 different grants. Six billion euros comes from specific grants (earmarked grants) and 27 billion from the Municipality Fund (gemeentefonds), which municipalities can spend as they see fit. At €14 billion, the general grant is the largest grant within the Municipality Fund. A further 31 decentralization grants (€1 billion), five integration grants (€11 billion) and four other grants (€0.1 billion) are allocated via the Municipality Fund.

More money due to new responsibilities

In comparison with last year, the Municipality Fund has grown by almost 50 percent (€8.5 billion). This growth is partly due to extra funding and partly because specific grants have been scrapped and added to the Municipality Fund. Municipalities have received an extra €4.7 billion from the government this year. This is because they have been assigned new responsibilities (youth care, participation and care for the long-term sick and elderly). The extra funding works out as less than what these new responsibilities cost last year.

More information

Contact: Maarten Allers

For the amounts per municipality, see www.coelo.nl.

K. Kwakkel and M.A. Allers, Atlas rijksuitkeringen aan gemeenten 2015, COELO, Groningen.