Reykjavik reports positive financial results with surplus of 406 million krónur in first half of 2024

Reykjavik City has reported positive financial results for the first half of 2024, marking a significant turnaround in operations. This is the first time in five years that the operational balance for the city’s A-account has been favorable, amounting to a surplus of 196 million Icelandic krónur, which is 1.1 billion krónur better than the same period last year.

The overall result for both A and B accounts was a surplus of 406 million krónur, an improvement of 7.1 billion krónur compared to the previous year. Mayor Einar Þorsteinsson highlighted that these results demonstrate the effectiveness of the city’s cost-cutting measures. He noted that a new hiring framework is working, maintaining the number of positions steady despite an increase in population and service demands. The current workforce stands at 8,654 employees.

However, there were challenges as payroll and related expenses exceeded budget allowances by 790 million krónur. This overspend is largely attributed to increased temporary staffing due to illnesses and higher staffing needs in child support services, alongside pressure in residential services for individuals with disabilities.

The announcement also acknowledged significant external uncertainties, including inflation and interest rates. Major challenges facing the city stem from responsibilities transferred from the national government to municipalities without sufficient funding support.