Local councils to receive cash injection

The Swedish government has announced an extra provision of 17 billion kronor ($2.1 billion) to help municipalities weather the financial storm.

The investment, presented by Alliance party leaders Fredrik Reinfeldt, Maud Olofsson, Jan Björklund and Göran Hägglund in a debate article in Dagens Nyheter on Monday, will be used to protect welfare.

The government announced in its spring budget that seven billion kronor will be made available for 2010, and an additional 5 billion kronor in 2011 and 2012.

The first injection in 2010 is described as a one-off measure to meet the economic downturn and is intended for use to avoid the necessity for mass redundancies within district and county councils.

The money will be paid out in December and divided per capita. 70 percent will be given to district councils and 30 percent to county councils.

The amounts earmarked for 2011 and 2012 will be provided in the form of increased state subsidies.

The government also announced that existing budget balance requirements will be reviewed.

“We want to, among other things, see if we are able to encourage financially prudent district and county councils to save money in the good years to then be used in the bad years,” the four party leaders wrote.

The proposal included no provision of extra revenue for 2009. The party leaders instead emphasized that cuts in social charges on employers and increasing property values will provide additional revenue for local councils this year.