Price growth and increased interest expenses have led to what has been characterized as “the worst municipal crisis since 1987”, but the picture is not entirely bleak. During the autumn, four awards from Municipality-Norway were published, each with its winners. Together, the winners paint the picture of a sector which – despite everything – is not quite up to speed. At the top of the Municipal Barometer: Kongsberg in Buskerud. At the top of the Municipal Index of “Norway’s best governed municipalities”: Aukra in Møre and Romsdal. Best for “climate efforts”: Stavanger in Rogaland. Norway’s most resilient municipality: Bærum in Akershus. In the 1960s, Prime Minister Per Borten (Sp) introduced the term “misery competition”. This is how he tried to put into words the dynamic in which Commune-Norway surpasses each other in drawing the devil on the wall – in order to increase transfers from the state. Professor of social economics, Jørn Rattsø, sees the same tendency towards crisis maximization this autumn. – I will never take crisis descriptions for good fish. There are many “crises” in the budget battle, often with the media as a microphone stand, he says. Best in “climate efforts”: Stavanger in Rogaland. Top of the Municipal Barometer: Kongsberg in Buskerud. Norway’s most sustainable municipality: Bærum in Akershus. Top of the Municipal Index of “Norway’s best managed municipalities”: Aukra in Møre and Romsdal. Bærum, Sogndal and Sunnfjord on the podium – The aim is to learn from the municipalities that are most successful, says Geir Are Nyeng from PwC, which has identified the most resilient municipalities. The Vinnar municipalities Bærum, Sogndal and Sunnfjord score highly on financial management and social conditions, and also achieve good results in terms of climate and environment. Nyeng warns that urgent savings measures can go beyond the long-term and “invisible” planning work in the municipalities. – It is not easy to prioritize climate and environmental measures when 500 parents are standing outside the town hall and fighting to save the local school, he says. – Such is the political rationality. There are different views on whether the challenges in Commune-Norway come from an acute and “perfect storm” of high interest rates, price growth and sudden growth in needs in the health and care sector. Or whether it is the culmination of slow macro-trends that Norwegian society, for various reasons, has not internalized. What determines the income of Norwegian municipalities? The income of Norwegian municipalities is determined by several factors: Taxes: The municipalities receive income from property tax and income tax from residents. The tax rates may vary from municipality to municipality. State budget and framework grants: The municipalities also receive grants from the state, known as framework grants, which are distributed based on various criteria, such as population size, demographics and needs. Fees: The municipalities can collect various fees for the services they offer, such as waste disposal, water and sewage. Commercial income: Some municipalities also have income from their own companies or investments. Permits: Specific project permits from the state or other sources can also contribute to income. Together, these revenues must cover the municipal expenses, which include welfare services, infrastructure, education and health. The summary is made by an AI service from OpenAI. The content is quality assured by news’s journalists before publication. Read more about the various surveys here: Norway’s best-governed municipalities – Municipal index 2024 Sustainability 357 – Sustainability in Norwegian municipalities 2024 The municipal barometer is a comparison of the municipalities in the country based on 157 key figures within 12 sectors. Municipal barometer 2024 Climate ranking of Norwegian municipalities as of 2024. For the second year in a row, Noradapt has ranked the climate efforts of Norwegian municipalities and who has the most reason to beat their chests. Chairman of the Norwegian Municipal Directors’ Forum, Bjørn Gudbjørgsrud, says that the accounts “over a period of ten years” have been “made up” by transitory and high tax revenues. – This should have been caught by the state and several municipalities earlier. – The municipalities that have been reluctant to borrow money and that have continuously implemented austerity measures are doing best now. In the podcast “Where life is lived”, number crunchers in KS explain why the government and the municipal organization operate with different figures for tax revenues. The reason is that the government updates the status in August, while KS waits until September. According to the Municipal Barometer, Asker is the fourth healthiest municipality in the country, and also among the best in terms of sustainability. As long as it lasts. Mayor Lene Conradi (H) says that the municipality must scale back several climate and environment initiatives to save money. – One example is the investment in sustainable housing and urban development. It is sad and sad, and in our view, going backwards into the future. Photo: Jon Petrusson / news Several municipalities should shrink smartly Nittedal mayor Rune Winum (H) says that the municipality was “saved” by low interest rates for several years, but that it started to “butt” at the start of the corona pandemic in 2020. He diagnoses the crisis as a combination of demographic changes and “several sudden factors that have happened at the same time”. – It is nice to be named Norway’s fourth most resilient municipality. But the situation is more serious than that, he says. – If we continue as we are now, we will have an empty savings account in two to three years. That is the harsh reality. With the Eidsvoll building as a backdrop, SP leader Trygve Slagsvold gave Vedum a promise in 2019 that all small municipalities should be able to continue as independent municipalities: a “guarantee of independence”. Photo: NTB Stein Kittelsen in the consulting company BDO was previously finance manager in Klepp municipality in Rogaland. Already 10 years ago, the municipality saw the writing on the wall: They had to “shrink smartly” and change the school and nursery structure. – What we see is that municipalities that have not tackled the demographic challenges get a double whammy, says Kittelsen. In the article “Challenges in shrinking rural regions”, the authors write that there is a “stigma attached” to being a municipality in decline, and that the explanation may be the associative link between growth and being successful. The result is the same anyway: Neither the municipalities nor the state will plan for population decline, even if they should. Kittelsen says that Klepp is better prepared than similar municipalities thanks to tough choices. – Everyone has different assumptions, but there are “similar” municipalities that are now in completely different financial situations. Terje Bendiksby / NTB scanpix Jørn Rattsø, professor of social economics at NTNU “Crisis” is greatest in municipalities that have spent more money than they have, built up debt and ended up on the Robek list, not prepared for aging and interest rate increases. On the other side, you have sober municipalities that invest carefully and build up reserves. NIKON D5 (3) / PwC Geir Are Nyeng, branch manager for the municipal sector at PwC Only 25 municipalities are cutting emissions in line with the Paris Agreement, compared to 20 in last year’s report. If we are to be close to achieving these goals, the municipalities must prioritize climate measures and resilience. These are typical measures that will lose the competition in the situation we have now. news Asbjørn O. Pedersen, general secretary of NKKFMo i Rana is a former “Terra municipality” that has turned the negative into the positive with a focus on Municipal economic resilience (KØB). Another bright spot is Hurdal municipality, which has gone from a net operating result of minus 3.6% in 2019 to plus 1.3% in 2022. This is even though they are the “poorest” small municipality under 5,000 inhabitants in Norway. Philip Hofgaard Bjørn Gudbjørgsrud, municipal director in SandefjordThe financial challenges have accumulated over time. Especially from autumn 2022, when price growth started to slow down. The municipalities that have done this: have been restrained in borrowing money, and implemented financial austerity on an ongoing basis, and especially from 2022, are doing best financially now. In addition to those who have large incomes from power and aquaculture, who manage well financially anyway. Ruth Barstein Ulla Higdem, professor of social planning at Høgskolen i Innlandet (HINN)Urbanisation, centralization and aging are megatrends, both in Norway and in Europe, which the government has not taken sufficiently into account. The continued link between population growth and being successful, as current policy suggests, will lead to more and more district municipalities being perceived as failures. Rolf Petter Olaisen / news Lisbeth Hammer Krog, mayor of Bærum The municipal structure seems dysfunctional. If the generalist municipal system is not moderated, I am concerned that many municipalities may be deprived of tasks that the state sees that the smallest municipalities are unable to carry out. A better solution is to utilize the potential of larger, robust municipalities, by being given responsibility for several tasks. Nittedal municipality Rune Winum, mayor of Nittedal The situation is both old and new. The financial room for action has been limited for many years, and has been characterized by an increasing number of tasks. When we came off the Robek list in 2006, we spent many years building a sustainable economy. We left stone for stone, and worked hard to reach the financial goals. We held back on the investments, and have a good foundation. But we have a big job to do going forward. Rolf Petter Olaisen / news Lene Conradi, mayor of Asker It is clear that we must prioritize statutory services within the core tasks of the municipality and that a consequence must be that we sharply reduce the municipality’s investment in renewable energy. This is sad and regrettable for Asker, but also for the national “berekraft network” to which we have contributed and participated through KS, which we can no longer prioritize to the same extent. Tora Jarnæs Vold / news Per-Willy Amundsen, the Frp Party that wooed the districts to win the election, has now made sure to drive the districts straight back to the 80s. High interest rates, underfunded services, increased pension costs, price increases, and in addition the reception of many refugees from Ukraine. Together have created the perfect storm. History has shown that with the FRP in government, the municipalities have much better finances than they did under Støre and Vedum. Arne Stubhaug / news Jenny Følling, Mayor of Sunnfjord We feel that the cost drivers are a sharp rise in interest rates, increased expenses for the elderly and those in need of care and high cost growth. Extremely high tax input in 2022 and 2023 has camouflaged this cost development. Extra tax income at the end of both years helped to balance the accounts instead of the fact that they should have been used for restructuring. Published 31.10.2024, at 17.07
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Winners and losers – news Vestland
