Court of Audit calls for reform of Flemish municipal funding

The way the Flemish government finances cities and municipalities needs revision. The system is too complicated and dated, says the Court of Audit in a new report.

Three hundred Flemish cities and municipalities together receive 3.6 billion euros annually from the Municipal Fund of the Flemish government. But in recent years, in addition to the Municipal Fund, additional financial flows have been created that now account for another 1 billion. The system has become too complicated and is insufficiently transparent, says the Court of Audit, the body that oversees public finances, in a new report.

For one, the Court of Audit is critical of the distribution of funding. On average, Flemish municipalities receive 598 euros per inhabitant, but central cities and coastal municipalities are better off. Antwerp and Ghent, for example, receive ​ 1,820 euros and 1,780 euros per inhabitant respectively. The reasons for these differences in funding are insufficiently substantiated and often dated, the Court of Audit finds. 

In addition, the Court of Audit is also critical of additional grants that have been added to the Municipal Fund since 2002. These would each have their own rules and payment calendars, which has made the allocation of funding to municipalities more difficult and less transparent. 

The Court of Audit therefore recommends that the Flemish government update the Municipal Fund Decree and optimise the objectives, criteria, parameters and distribution keys on the basis of sound, underpinning studies. 

The discussion on municipal funding will thus undoubtedly become an agenda item during the ongoing Flemish government negotiations between N-VA, Vooruit and CD&V. The latter has long been pushing for a more fair distribution of resources based on updated criteria. 

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