Minister seeks reviews of state measures’ costs to municipalities
Monday 2nd November 2026 on 23:15 in
Iceland
Infrastructure Minister Eyjólfur Ármannsson wants municipalities to be able to seek an independent review of the financial impact of state measures when experience shows the original estimate was significantly wrong, mbl.is reports.
He also believes the responsible minister should be required to act if a review finds that costs differ substantially from the initial estimate. Possible measures could include changes to funding or service requirements.
The proposal was outlined in Ármannsson’s response to a question from Ragnhildur Jónsdóttir, a substitute MP for the Independence Party. Current municipal government legislation does not provide a specific process for such reviews, although the state and municipalities can discuss the issue through formal cooperation.
Reviews could take place after five years
A working group representing the infrastructure, finance and justice ministers and the Association of Local Authorities proposed that a minister, the association or a municipality could request a review by the National Audit Office. The proposal covers the financial effects of legislation, government regulations and other state policy decisions.
A review could be requested after five years and no later than 10 years after a decision. Ármannsson says it should apply only to decisions with a significant impact on municipal finances, and that the National Audit Office should independently decide whether to accept a request.
He says the timeframe would allow enough experience to assess how a decision had been implemented, while making it possible to distinguish its effects from other changes.
Review proposal is not in the bill
Most of the working group’s proposals are included in a bill on new municipal government legislation now before parliament, but the provision for reviews by the National Audit Office is not.
Draft legislation containing the provision was sent to the Speaker of Parliament for comment. The parliamentary presidency committee and the Speaker opposed including proposed changes to the National Audit Office Act in a ministerial bill, saying that changes to the role of the office, which operates on behalf of parliament, should be initiated by the committee or the Speaker.
Ármannsson’s response says the parliamentary presidency committee is expected to consider the matter alongside parliament’s examination of the municipal government bill and, if appropriate, propose changes.