The municipalities are set to receive a significant boost in their economy in 2025, thanks to a new agreement with the government. The government and the Danish Municipality Association have just entered into an economic agreement for the municipalities, which secures an increase in funds for welfare of 3.4 billion Danish kroner. The agreement, presented at the Ministry of Finance, marks a considerable increase in the municipalities’ financial framework compared to previous years. Last year, the service framework was increased by 1.4 billion Danish kroner. The service framework, which includes the municipalities’ expenses for, for example, daycare facilities, public schools, vulnerable groups, the elderly, environmental initiatives, and public transport, now amounts to a total of 323.6 billion Danish kroner according to the Danish Municipality Association. Finance Minister Nicolai Wammen expressed great satisfaction with the new agreement and called it the best agreement he has made with the municipalities during his time as finance minister. However, he emphasized the importance of using the funds wisely, even though there are now more funds available. The Danish Municipality Association’s chairman, Martin Damm, who is also the mayor of Kalundborg Municipality, also praised the agreement and called it the best economic agreement he has been part of. Damm highlighted that the agreement represents a significant shift towards improved welfare, even though not all challenges are solved with this agreement. He noted that 500 million Danish kroner from the previously adopted elderly reform are already included in the total amount of 3.4 billion Danish kroner. Prior to the agreement, there were already signs that the municipalities could expect a better financial situation. Earlier in the week, Wammen announced that the government will reduce the state administration by 1000 full-time positions from 2025, with further reductions in the following years. This move will free up more funds for municipal welfare, which according to Damm is necessary and much needed. He also urged the government to continue reducing the state administration.

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