Municipal accounts, 2008

The municipalities’ gross operating surplus in 2008 was about NOK 1 billion. The figures show that the municipalities’ gross operating revenue was approximately NOK 262 billion in 2008, whereas the gross operating expenditure was about NOK 261 billion. The gross surplus is 0.4 per cent of the gross revenues in 2008 compared to 1.5 per cent in 2007. This decline is an indication that the gross expenditure has increased more than the gross revenue.

The net operating surplus for the Norwegian municipalities fell from NOK 5.5 billion in 2007 to minus NOK 73 million in 2008. The net operating surplus is estimated at 0 per cent of the gross operating revenues, compared with 2.3 per cent in 2007. This is the lowest result ever registered since it became possible to calculate the gross operating surplus in 1991. It is the first time that a negative net operating surplus has been registered at a national level.

Investing and financing

Gross investment expenditures for the municipalities were approximately NOK 34.1 billion in 2008, compared to NOK 30 billion in 2007. The audited figures show that the deficit before loans and allocations increased from NOK 9.3 billion in 2007 to NOK 20.3 billion in 2008. The municipalities have never had such a substantial deficit than the value in 2008.

The financing of investments by loans has increased by nearly NOK 1.7 billion from NOK 18 billion in 2007 to NOK 19.7 billion in 2008. Financing of investments by applied loans as a percentage of the gross capital expenditure was approximately 58 per cent in 2008, compared with 60 per cent in 2007. The municipalities withdrew NOK 8 billion of existing funds, compared to NOK 1.6 billion allocated to funds in 2007.

Huge increase in net interest

The municipalities’ net interest increased significantly in 2008. This is as a result of the losses incurred from the financial investments and the higher interest levels. Municipalities must register all realised and unrealised losses resulting from financial investments in the operational accounts. The audited figures for 2008 show a net interest expenditure of about NOK 3 billion, compared with net interest revenues of NOK 0.1 billion in 2007 and 1.8 billion in 2006. The net interest has increased by approximately NOK 4.8 billion since 2006. The decline in the stock markets has affected the municipalities’ net operating surplus in a negative direction.

Consolidated accounts

Units with separate accounts and local authority partnerships made a positive contribution to the consolidated accounts, with an increase in the municipalities’ gross operating revenues of about NOK 6 billion.

The consolidated accounts show a gross operating surplus of NOK 1.4 billion in 2008 compared to NOK 4.8 billion in 2007. This decline was primarily caused by the municipal accounts’ decline in gross operating surplus. Units with separate accounts and local authority partnerships had a positive effect on the gross operating surplus in the consolidated accounts, with NOK 0.4 billion.

The net operating surplus for consolidated accounts was NOK 1.1 billion in 2008 compared to NOK 7.2 billion in 2007.

The gross investments expenditure of units with separate accounts and local authority partnerships was NOK 5.3 billion; a decline of NOK 99 million compared to 2007.

Production of services

Administration, kindergartens, primary schools and nursing and care services are the main service areas in the municipalities. The municipalities’ expenditure on administration was NOK 16.6 billion in 2008, while expenditure for kindergartens, primary schools and care services amounted to a total of NOK 29.6, NOK 56.5 and NOK 70.6 billion respectively.

The figures illustrate that 87.1 per cent of children aged 1-5 years attended kindergarten in 2008, compared with 84.3 per cent in 2007. In 2008, more children received help from the child welfare services, whereas fewer pupils attended primary and lower secondary education and fewer recipients received social assistance compared to 2007.

Tables:

• Table 1 Main figures for operating and capital accounts and financing. Municipalities, audited figures 2005, 2006, 2007 and 2008. NOK million
• Table 2 Main figures for operating - and capital accounts and financing. Consolidated municipal accounts, 2005-2008. NOK million
• Table 3 Financial key figures. Municipalities. Audited figures for 2005, 2006, 2007 and 2008
• Table 4 National key figures. Municipalities. Audited figures for 2005, 2006, 2007 and 2008