Reykjavík job cuts cover only 15% of savings target

Reykjavík Mayor Hildur Björnsdóttir says the decision to cut 54 full-time positions and save the city 900 million Icelandic krónur accounts for only about 15% of the savings needed overall, mbl.is reports.

Reykjavík aims to reduce annual spending by 5 to 6 billion krónur. Changes have already been made in the city’s welfare department, education and recreation department, and the mayor’s office.

“All departments will be reviewed, and we have imposed strict efficiency requirements on every department ahead of next year’s budget,” Björnsdóttir said. She added that the city was reviewing its entire administrative system and that its assessment showed a clear need for extensive streamlining.

The mayor said the city’s finance office had stressed that annual savings of 5 to 6 billion krónur were needed to meet the objectives of Reykjavík’s financial policy. The restructuring approved on Tuesday is expected to save 900 million krónur, she said, but that represents only about 15% of the deficit that must be addressed.

The measures will also extend beyond city departments and the mayor’s office. Reykjavík is preparing to sell assets including the Höfði asphalt plant, Ljósleiðarinn and Carbfix. Björnsdóttir said the city should not retain assets that are unnecessary for its operations or engage in competitive business, and should instead focus on core services.

The city is also preparing to outsource waste collection, initially in one of Reykjavík’s districts. No decision has been made on which district will be chosen.

Björnsdóttir said Reykjavík also aimed to become more attractive to businesses by offering favourable plots to promising companies and supporting business activity and value creation. “We are only just beginning to dig the trench,” she said.