Local councils face serious financial shortfalls

Local councils face a shortfall in their budgets of €6bn by 2017, which will force them to make major cuts in services, according to local government research centre Coelo.

Local councils already face a cut in government money of €2.7bn a year because of national policies, the institute, which is part of Groningen University, says in a new report.

A further €2.9bn will be added to this when local councils take responsibility for youth services, residential care and getting people back into work in 2015. Proposals for new spending cuts add a further €500m to the total.

Local taxes

Councils will be unable to make up for the shortfall by raising local taxes, the institute says. Currently, local government raises just 3.4% of total spending through taxes on property and other charges and even doubling this will not make up the difference.

Research shows people are more likely to accept cuts in spending on areas such as road repairs, parks, community provisions and sports. But care duties, where most people oppose cuts, account for the bulk of local authority spending, Coelo says.

The shift towards local government is part of the cabinet’s efforts to decentralise care in its broadest form and encourage people to make more use of friends, family and volunteers.

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