– Interest rates are rising and price inflation is high. In addition, many large investments have been made in water and sewage, says Helge Eide in the municipal organization KS. KS has conducted a survey among Norwegian municipalities in connection with the government’s proposal for the state budget. Of the 79 municipalities that have responded, all state that the fees for water and sewage are planned to be increased next year. 40 per cent of the municipalities that have responded are predicting increased fees of more than 20 per cent next year, 60 per cent are planning for an increase in water and drainage fees of between 10 and 20 per cent. – Why can’t the municipalities pay for this themselves – without increasing fees? – There are only a few municipalities that can afford to subsidize the water and sewage charges, says Eide. He claims the alternative is to dramatically cut the service offering in, for example, health and care or school and education. CUT: Helge Eide in the municipal organization KS says the alternative to increased fees is to cut the service offering. Photo: Vibecke Wold Hågensen / news Sharp increase Big cities such as Oslo, Trondheim, Bergen and Stavanger are all planning for increased water and sewage charges next year. In Oslo, the city council plans to increase the water and sewage charges by more than 16 per cent next year – and the years that follow. In four years, the water and sewage tax in Oslo will increase by NOK 3,500 for an average household, according to Oslo City Council’s own estimates. This year, such a family will pay NOK 4,101 in water and drainage fees, according to the city council’s own calculations. The example includes a home of 87 square metres. For homes of 120 square metres, the fee increases from NOK 5,656 this year to NOK 10,527 in 2026. EXPENSIVE: Work on a new water supply has put Oslo City Council in a funding squeeze. City Council for the Environment and Transport Sirin Stav (MDG) announces increased fees year by year in the future. Photo: Javad Parsa / NTB The main reason is the cost gap linked to the capital’s new reserve water supply. This was among several matters that the opposition in the Oslo City Council criticized again this week. But interest rate increases and price increases also come into play when explaining the tax increase in Oslo. According to City Council for the Environment and Transport, Sirin Stav (MDG), it is high time that something be done: – The fees are increasing because this city council is now catching up with a huge backlog of critically important investments, after other politicians have failed to take responsibility for years . It costs money, but we have to clean up discharges to an Oslofjord that is threatened by collapse and give Oslo a new and safe water supply, she says to news. More expensive In Trondheim, fees related to water, drainage, sweeping and waste disposal increase by around NOK 1,700, or more than 16 per cent, for an average household. In Stavanger, too, there is a fee increase that far exceeds the estimated price increase of 2.8 per cent in the state budget for next year. The municipality plans to increase water charges by 24 per cent and sewage charges by 12 per cent. The budget work in Norwegian municipalities has not yet been completed in the vast majority of places. This makes it difficult to estimate exactly how much the fees will increase and where the heaviest mark-ups will come. But according to a report that Sintef and Norconsult carried out on behalf of the industry organization Norsk Vann last year, it is in the districts that the fees will increase the most in the coming years. The report states that the municipal water and sewage network needs upgrades for 332 billion over the next 20 years. On average, customers have to accept a doubling of the fees. But in a number of regions and municipalities, one must envisage a tripling of the current fee level, said CEO of Norsk Vann, Thomas Breen, to news at the time. Key figures for the state budget 2023 The use of oil money is reduced by NOK 18.3 billion to NOK 316.8 billion (2.5 per cent) The total expenditure in the proposal for the state budget for 2023 is NOK 1747.8 billion. That is 10.5 per cent more than in 2022. Unemployment is expected to remain at 1.7 per cent next year GDP for mainland Norway is estimated at 1.7 per cent next year. The budget stimulus is calculated at – 0.6 per cent The price increase is calculated at 2.8 per cent next year. 4.8 percent this year. The municipalities are to receive NOK 2.6 billion more in discretionary income Increases in Bergen too Fees in Bergen are also likely to increase more than the expected price increase, but not as much as in the other large cities. Bergen plans to increase annual fees for water by 9 per cent next year, while sewage fees will increase by 5 per cent. For a household with average consumption and a home of 120 square metres, the bill will be NOK 6,515 in 2023. This is an increase of just over NOK 400. – If we hadn’t had money in the fund, then we would have had to increase much more, says director Magnar Sekse in Bergen Vann to news. – Why are these fees being increased? – We have experienced an increase in the cost of electricity, which amounts to NOK 60-70 million extra for Bergen water and sewage next year. In addition, we have had an interest rate increase of 2 per cent, which amounts to between 70 and 80 million, says Sekse. The work on a new water and drainage solution at Mindemyren in Bergen will soon be finished. Photo: Odd Arne Olderbakk / news The head of the water and sewage agency in Bergen meets news at Mindemyren, where a major project in connection with the development of the light rail is about to be completed. He describes the fees in Bergen as “quite low” on a national scale. – We are among those that provide the least increase from 2022 to 2023, he says. Vedum: Make it cheap When it comes to the improvement and development of water and sewage systems, a so-called “self-cost principle” applies. This means that increased costs are added to the fees paid out to residents. In return, the municipalities cannot increase the water and sewage charges to finance other purposes, points out Finance Minister Trygve Slagsvold Vedum (Sp). – The municipalities cannot increase the fees for water and sewage more than it actually costs. Because this is strictly regulated. You should not make money from people’s fees, he says and continues: – It should be self-catering. The municipalities must then see how they can do things as cheaply as possible. Is it possible to choose a simpler solution? Is it possible to choose a more affordable way? One should not transfer costs to people who already have high expenses. Finance Minister Trygve Slagsvold Vedum (Sp) believes that the municipalities should do their part to find cheap and simple solutions when the water supply needs to be improved. Photo: Hanna Johre / NTB Helge Eide in the municipal organization KS points out, however, that the financial room for action is completely different this year and next year than it was last year. – The sharp rise in prices that we are all experiencing obviously also affects the municipalities. The economy will be significantly tighter next year, he says. Tight times More than 100 municipal directors have answered questions about the municipal economy in the survey that KS is behind. The municipalities estimate that the net operating profit will fall from 4.1 per cent last year to minus 0.9 per cent this year. This is the assessment after the first eight months of the year and with the government’s proposal for the national budget. – If we are to believe what the municipal directors answer, then the net operating result will fall by 5 percentage points from last year. It must be said that the operating result was very good last year, but this is a sharp drop, the likes of which we have not seen in at least 20 years, says Eide. – What does this target say, i.e. net operating profit? – It is the source of self-financing for investments in, for example, care homes, schools and kindergartens. So when the net operating result falls so sharply, it means that the municipalities’ ability to make such investments is significantly reduced. Eide says the municipalities will do their utmost to ensure good services next year as well, but adds that the tight economy could have consequences for the service offering. – These are challenging times now, because the high price increase affects everyone. The whole aim of the government is to create security for people, to ensure that we bring prices down. Because the rise in prices also creates challenges for the municipalities, says Vedum. He adds that the government has allocated more than NOK 18 billion to the municipalities in the state budget, as a response to the rise in costs.
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Warns of price shock for water and sewerage – news Norway – Overview of news from different parts of the country
