Three-quarters of Dutch municipalities are projected to face a combined budget deficit of €5.2 billion in the coming years, according to an analysis by accounting firm BDO. BDO reviews the multi-year budgets of all municipalities in the Netherlands annually.
A significant number of municipalities are delaying decisions, hoping for financial support from the national government. Only 25% of the 342 municipalities are expected to achieve a positive budget over the next three years, with a collective surplus of €1.4 billion anticipated.
The remaining 75% face a deficit of €5.2 billion, as calculated by BDO. While the financial issues are not new, they are intensifying.
A year ago, BDO estimated that only a quarter of municipalities would face deficits in the coming years. Although Dutch municipalities collectively have €41 billion in reserves, not all reserves can be used to cover budget shortfalls.
The most severe financial challenges are expected next year, with deficits rising to €1.4 billion, partly due to significant cuts in national government contributions. Many local councils are struggling with funding essential services like youth care.
Marc Steehouwer from BDO notes that many municipalities are anticipating more funds from the national government, which delays decision-making. Upcoming municipal elections in early 2026 further complicate matters, as current administrations may be penalized for making painful decisions now.
BDO’s review of multi-year budgets reveals that municipalities planning cuts in response to national funding reductions have yet to specify implementation details. Such cuts could impact community centers, green maintenance, and subsidies, while property taxes, parking fees, and service charges may increase.
Steehouwer suggests that municipalities could scrutinize their own operations and priorities, questioning the necessity of planned projects and actions. Both municipalities and the national government have roles to play, and resolution cannot solely rely on national intervention.
Municipalities have previously threatened legal action if the national government fails to provide sufficient funding for services like youth care.
Source: NOS