Today, Tuesday, July 1, the Council for Public Administration (ROB) presented its advice in the Committee for Internal Affairs. Making progress with shared responsibilities addresses the information position of Parliament regarding municipal finances.
A portion of the tasks of the central government has been delegated to municipalities through legislation, in the form of shared responsibilities. But do municipalities have sufficient financial resources to carry out these tasks? On September 11, 2024, the Senate asked the ROB for advice on whether an annual monitoring of municipal finances could strengthen Parliaments information position on this matter. Currently, it is difficult for both the Senate and the House of Representatives to verify whether the central government sufficiently compensates municipalities for shared responsibilities.
Current Situation
In 2025, total municipal revenues amounted to approximately €80 billion. About fifteen percent of these revenues come from the central government through specific grants. Just over half of municipal revenues come from the central government through the Municipal Fund, which has a size of approximately €45 billion. Whether municipalities have sufficient resources for their tasks is primarily determined at the national level.
The size of the Municipal Fund is determined by the budget legislator and is part of Parliaments budgetary rights. The goal of the central government regarding the size of the Municipal Fund is to provide municipalities with sufficient resources to properly carry out their tasks. For strong budgetary rights, Parliament needs insight into the relationship between municipal tasks and the resources required for them.
A Catch-All Solution
The ROB confirms in its advice that insight into the balance between the tasks and financial resources of decentralized authorities is crucial. Currently, the Municipal Fund is too much of a catch-all solution that lacks sufficient clarity. Parliament often has to rely on signals from municipalities and particularly the central government in its assessment of whether the Municipal Fund contains enough money for all tasks. It is difficult to assess this independently. A monitoring system will not help in this regard, the ROB writes. More is needed. The Senate and the House of Representatives can only effectively exercise their budgetary rights and control over the Municipal Fund when certain conditions are met.
For instance, Parliament must know what the shared responsibilities are that are (partially) funded from the Municipal Fund. It must also be clear what budgets the House of Representatives and the Senate allocate for these shared responsibilities. Furthermore, it must be clear what the necessary costs are arising from the efficient execution of these shared responsibilities and how the central government monitors whether these laws are implemented properly and effectively. Good insight into this requires that shared responsibilities are consistently allocated. Finally, to verify whether the Municipal Fund contains sufficient resources for autonomous municipal policy, it must also be clear to Parliament what portion of the Municipal Fund is minimally intended for this purpose.