North Ostrobothnia welfare region budget deficit projection rises to €1.43 billion

The financial situation of the North Ostrobothnia welfare region has not deteriorated as dramatically as recent budget forecasts suggest, according to the region’s welfare director, Ilkka Luoma. A recent report indicated that the budget deficit for welfare areas is projected to increase to €1.43 billion this year, up from an estimated €1.25 billion in May.

The most significant increase in the deficit was noted in the Pohde welfare area’s estimates, where the deficit is expected to rise from an initial forecast of €60 million to €90 million. However, Luoma asserts that this growth has not come as a surprise to them. “We have seen throughout the early months of the year that our fiscal reality is approaching the target set in the budget,” Luoma stated, emphasizing that they have been implementing compensatory measures and hoped until the last moment to address the expected overspend in the latter part of the year.

In the first six months of the year, Pohde managed to stay within the forecasted deficit figures. Luoma noted that, even with a deficit of €90 million, Pohde would still have one of the smallest deficits per capita among welfare areas in Finland.

The growing deficit is primarily attributed to the rising costs of purchased customer services, which have exceeded the original budget. Factors such as a staffing shortage, post-COVID care and service debts, and services transferred from municipalities—which heavily rely on purchasing—are contributing to this increase.

Looking ahead, the current deficit is unlikely to trigger additional savings measures beyond those already planned. Nevertheless, the regional council will need to consider new cost-cutting strategies in the fall, potentially affecting the role of Oulaskangas Hospital and its services, as recent policy outlines come into effect. Meanwhile, Pohde aims to keep the €90 million deficit estimate in check.