If Michel Barnier wants to reduce public spending as he announced, he doesn’t have to look hard for how to do it. Matignon’s closets are full of reports from the Court of Auditors on possible savings. And a document has just arrived on the Prime Minister’s desk analyzing the specific budgetary drift of local authorities and suggesting corrective measures. Including the elimination of 100,000 local agent positions.
This report, commissioned by Barnier’s predecessor in Matignon, Gabriel Attal, presented on Wednesday, October 2, confirms the current diversion of the finances of municipalities, departments and regions, which together represent 18% of public spending.
Former Economy Minister Bruno Le Maire raised the alarm at the beginning of September, citing a difference of 16 billion euros between the deficit of local communities initially planned for 2024 and the one that is actually looming. The October 2 report corroborates this analysis. “The financial trajectory of communities is increasingly declining”the magistrates write.
On the one hand, VAT revenues are growing less than expected. Regarding tax derivatives on real estate transactions, you know “a steeper drop than expected” : At the end of August, they fell 20% compared to the same period in 2023. On the other hand, expenses are increasing rapidly. During the first eight months of the year, operating costs increased by 5.4% in comparable terms, due to both the increase in remuneration, the growing use of external service providers and the increase in the number of beneficiaries of certain aid. , such as the personalized autonomy subsidy. Investment spending is increasing even faster (+13% in one year).
An “increasingly hypothetical” goal
Result: the need for financing of local authorities “It will experience a considerable increase compared to 2023”which leads them to incur additional debt, points out the Court of Auditors. And the official objective was for the communities to generate a financing surplus of more than 17,000 million euros between now and 2027. “It seems more and more hypothetical.”
“I chair my department’s finance committee and, for the first time, I cannot complete my budget, testifies Véronique Louwagie, deputy (Les Républicains) for Orne. The State has transferred missions to us, the number of unaccompanied minors to be cared for increases by 20%, the number of active beneficiaries of solidarity income also increases, the remuneration of agents increases and I lose 14 million euros in taxes on real estate transactions. Therefore, we will have to cut spending. »
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