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Calculations on central government funding for counties

The calculations on central government funding for counties reflect the latest estimates of the future financing required by the counties. The calculations were updated in respect of the government proposal (15/2017 vp) in early March 2017 and before that in December 2016. The calculations will also be updated before the final calculations at 2019 prices will be made. 

When the calculations on county financing are reviewed, it is advisable to bear in mind that the outcomes are likely to change with the update of the input data. The data on individual counties varies greatly depending on the year used as the source of data.

The calculations are based on the 2019 division of counties.

The financing calculations regarding duties other than social, healthcare, environmental healthcare and rescue services are based primarily on the 2017 budget figures.

Calculations on central government funding for the counties for the provision of social,  healthcare and rescue services

The latest calculations on county financing for social, healthcare and rescue services are based on the local government budget survey carried out by Statistics Finland in early 2017.

  • This data has been used to estimate the costs to be transferred from municipalities to counties at the 2017 prices.
  • The funding received by the counties is compared to the imputed baseline level arrived at by adding up the net cost of the services hitherto provided by municipalities at the county level.
  • Consequently, the proposed change reflects the difference between the baseline situation and the amount of future financing; in other words, it shows how central government funding will be redistributed between the counties.

The update carried out in February 2017 revealed significant changes relative to the calculations released on 22 December 2016. The December calculations only concerned the funding for social,  healthcare and rescue services. The changes were due to more detailed input data and the adoption of 2017 prices.

The differences between the calculations made in December 2016 and March 2017 is primarily explained by the differences between baseline costs in the individual counties following the adoption of 2017 as the basis for the estimates.

  • If the increase in costs exceeds the national average, it appears as a decrease in the amount of funding relative to the December calculations and vice versa.
  • In some cases, a change in the biggest city in the region affects the outcome for the entire county.

The update in February 2017 was carried out using exclusively 2017 data because the previously used average calculations could not be applied.

However, the final calculations will be based on two-year averages as provided in the Act on the Financing of the Counties, which will equalise eventual annual changes between the counties.

Central government funding for counties: social, healthcare and rescue services
Central government funding for counties: update of social, healthcare and rescue services funding at 2017 prices
Central government funding for counties: social, healthcare and rescue services calculations at 2017 prices

Calculations concerning the other duties of counties and aggregate funding

As provided in the proposal for the supplementary amendment to the Act on the Financing of the Counties, the calculations cover the estimates of the funding required for the fulfilment of the counties’ other duties.

Additionally, the calculations include the aggregate funding calculations foreseen in the Act on the Financing of the Counties pertaining to the financing of social, healthcare and rescue services as well as the other duties of the counties.

The calculations illustrate the level of funding made available to the counties in accordance with the financing components as well as the change relative to the estimated current level in the counties. Most of the calculations are done at 2017 prices.

Before the final transfer of duties, the calculations on the funding towards the fulfilment of the counties’ other duties will be updated to the level represented by the 2019 General Government Fiscal Plan, with the result that the funding allocated for this purpose will also change to conform to the GGFP.

Consequently, the final level of central government funding made available to the counties will depart from the calculations in response to the changes in the financing framework.

The calculations on county financing reflect the latest estimates of the future funding extended to the counties. The latest update to the calculations was made in May 2017 when the government proposal for an supplementary amendment to the Act on the Financing of the Counties was given to Parliament. The calculations will continue to be updated before the final calculations at 2019 prices are completed.

Central government funding for counties: other duties of the counties and summary of aggregate funding for the performance of all duties
 

Inquiries:

Senior Financial Adviser Tanja Rantanen, Ministry of Finance, tel. +358 (0)295 530338 (steerage of counties and calculations)
Special Adviser Miikka Vähänen, Ministry of Finance, tel. +358 (0)295 530465 (specifically calculations concerning the financing of the counties’ other duties and the financing of social and health and rescue services)
Ministerial Adviser Ville Salonen, Ministry of Finance, tel. +358 (0)295 530388 (specifically calculations concerning the financing of social and health and rescue services)
Ministerial Adviser Antti Väisänen, Ministry of Social Affairs and Health, tel. +358 (0)295 163044 (specifically calculations concerning the financing of social and health and rescue services)
Budget Counsellor Virpi Vuorinen, Ministry of Finance, tel. +358 (0)295 530557 (legislation)