45 municipalities seek record DKK 2.7 billion in special grants

Forty five Danish municipalities have applied for a record total of more than DKK 2.7 billion from a fund for municipalities in particularly difficult financial circumstances, DR reports. The fund contains only DKK 1 billion.

The municipalities will be told towards the end of August whether they will receive financial support for the budgets they are currently trying to finalise.

Last year, 37 municipalities applied for a total of about DKK 2 billion. The Ministry of Economic Affairs and the Interior is responsible for notifying municipalities of the decisions, although the precise date has not been announced.

Expert surprised by number of applicants

Mogens Ove Madsen, an associate professor of economics at Aalborg University, said he was surprised that almost half of the country’s municipalities had applied.

“It actually surprises me. I would have guessed that applications would come from around 20 municipalities,” he said.

However, Madsen said municipalities had good reasons to be under financial pressure. He argued that Denmark’s municipal equalisation system, which transfers money from wealthier municipalities to poorer ones, does not adequately compensate peripheral municipalities for factors such as an ageing population, young people moving away and weaker employment opportunities.

“These are developments that municipalities have no influence over. They have no influence over where people move, where businesses move, or how ageing develops,” he said.

Asked whether some municipalities might simply be taking a chance to secure more money, Madsen said some could be “a little bold” in trying to obtain additional funds for their budgets.

Rising costs put pressure on budgets

DR has obtained all the municipalities’ applications. Many cite higher costs for elderly residents, a large number of people receiving benefits and sharply rising expenses in specialised social services.

Those services cover children, young people and adults with physical or mental disabilities, as well as other vulnerable people.

Several municipalities also point to local challenges. Some island municipalities say they are under pressure from higher ferry costs, while Randers Municipality says it is still dealing with the bill for cleaning up after the landslide at Nordic Waste.

The municipalities are now waiting to learn which of them will receive a share of the limited fund.