Adjustment of the grant system for municipalities and provinces to the Council of State

Provinces and municipalities receive income in various ways. Part comes from their own taxes, but the majority of income for municipalities and provinces comes from the national government. These various grants from the national government are regulated in the Financial Relations Act.

Problems have arisen with certain types of grants, such as the decentralization grant. In the revised law, this will be replaced by the special fund grant (BFU). Like the decentralization grant, the BFU is part of the provincial or municipal fund. This means the grant benefits the general resources of the province or municipality, so they no longer have to account to the national government for how they spent the money. This results in less accountability burden. However, the bill stipulates that the national government may request information to check whether goals are being met and costs are appropriate. The BFU can thus be a good alternative to the specific grant and can help reduce the number of specific grants, which has increased significantly in recent years.

There are also changes to the specific grant. With a specific grant, the national government provides money to municipalities and provinces under certain conditions. Provinces and municipalities may only spend the money for the purpose for which the national government intended the grant. This type of grant creates a lot of work for municipalities, provinces, and the national government. Therefore, efforts are being made to reduce the workload (for provinces, municipalities, and the national government).

Furthermore, the bill adjusts various rules regarding the general grant of the provincial and municipal funds.

The Caribbean public bodies (Bonaire, Sint Eustatius, and Saba) also receive income from the national government. These grants are not regulated in the Financial Relations Act but in the Public Bodies Finance Act Bonaire, Sint Eustatius, and Saba (FinBES). This grant system is different, so most adjustments do not apply to the Caribbean public bodies. However, there is a grant for the Caribbean public bodies that closely resembles the specific grant: the special grant. The rules for the special grant and the specific grant are almost the same. Therefore, this bill also applies most adjustments to the specific grant to the special grant.