Social expenditure explode: NRW municipalities face financial disaster!

Social expenditure explode: NRW municipalities face financial disaster!

In the first half of 2024, the social spending of the German municipalities rose sharply, a trend that is worrying for many cities and municipalities. This development means that numerous municipalities have to accept new debts in order to meet their legal obligations. North Rhine-Westphalia in particular is affected by this increase and is growing around 75 euros per capita. Overall, the cost increases in Germany are over twelve percent compared to the previous year.

The background behind these financial burdens are complex. A significant increase is evident in the areas of youth welfare and integration, in particular by the implementation of the residential reform, which has significantly expanded the circle of entitlements. The number of cases has increased by 87 percent since 2021, which leads to an increased personnel requirement. However, the municipalities do not receive the necessary funds in full, which represents an additional financial burden.

stress in the municipalities

The campaign alliance "For the Dignity of our cities", consisting of 71 municipalities, notes that financially weak cities in particular suffer, especially from the increase in social spending. In Bottrop, for example, the city expects an increase in costs for economic youth welfare by 1.47 million euros and is planning expenses of around 3.3 million euros for the educational and participation package, while only 1.6 million euros are reimbursed by the federal government.

• for daycare places, the costs have risen to around 57.7 million euros, which represents an increase of 6.5 million euros compared to the previous year.
• The city expects a deficit of around 23.2 million euros, since the financial allocations are not sufficient to cover the increasing requirements.

The growing social costs mean that the municipalities have to increasingly have to absorb liquidity loans again. In the first half of 2024, an additional debt of around 2.4 billion euros was recorded, without the relief of the debt relief in Rhineland-Palatinate. Through these loans, cities finance services in which the federal and state governments have a considerable interest, but do not ensure complete financing. This affects the possibilities of the municipalities to invest in local infrastructure projects such as road construction, public transport and education.

demands of the associations

The action alliance calls for two major changes to fix the municipal financing.

1. old debt solution: The associations believe that the federal and state governments have a significant responsibility for the financial problems of the municipalities. In this regard, many federal states have already taken steps, but there is a lack of a majority in the Bundestag in order to create sound solutions.
2. . The municipalities must be financially equipped in such a way that they can fulfill their tasks without further fault.

The big question remains how the federal government will react to the growing challenges, since the situation is an increasing challenge for both the municipalities and the citizens. More details on this development can here be read.

The affected municipalities include Bottrop, Dortmund, Duisburg and many others, all of whom are trying to protect the financial stability for their citizens.