Reykjavik opposition leader says city cuts risk costly mistakes
Tuesday 3rd November 2026 on 17:01 in
Iceland
Reykjavík’s financial position does not justify the new city majority’s rapid, deep cuts, Social Democratic Alliance leader Pétur Marteinsson said at a city council meeting Tuesday, according to mbl.is.
The council was holding the first discussion of Reykjavík’s budget for next year. The mayor has forecast a 2.8 billion króna operating surplus in the city fund.
Marteinsson said the city’s A-section had a deficit of 3.2 billion krónur in the first half of this year. But its core operations recorded a surplus of nearly 8 billion krónur before depreciation and financial costs, 4.6 billion krónur better than in the same period last year. “This is not a picture of a city whose core operations have spiralled out of control. There is no emergency here,” he said.
He compared Reykjavík’s deficit per resident with those of other municipalities. In the first half of the year, it was about 22,000 krónur per resident in Reykjavík, compared with about 29,000 in Garðabær, 72,000 in Hafnarfjörður and 113,000 in Seltjarnarnes.
Depreciation totalled 7.3 billion krónur, including more than 2 billion in special write-offs, Marteinsson said. Financial costs were nearly 2 billion krónur above budget, partly because of inflation.
He said the new majority had launched three rounds of cuts in five months, reducing the workforce by 130 positions. He criticised the closure of projects that he said had either saved the city money or brought in revenue.
One was Virknihúsið, a programme that helped 286 people receiving financial assistance move into employment over three years. Marteinsson estimated it could have generated an annual benefit of about 380 million krónur for the city. Reykjavík’s research service had secured hundreds of millions of krónur in international grants in recent years, he said. He also cited the dismissal of an employee in the city’s service and innovation department who had played a key role in projects estimated to bring in 257 million krónur a year.
Marteinsson also criticised planned cuts to school and leisure services. “It is not enough to cross out lines in an Excel spreadsheet and call it efficiency,” he said. “You can reduce wage costs and still end up with a loss. Those are very costly mistakes.”