Brochure The municipality and its finances

Every municipality in the Netherlands has a large number of statutory tasks, as well its own policy (and policy intentions). How are these tasks and policies financed? The municipal council has a right to approve and amend budgetary policy, but does it also have rights regarding funding? How does central government divide available funds among municipalities? Can it assign new tasks without funding them? What happens if the municipal budget does not balance?

All these questions relate, directly or indirectly, to the financial relations between central government and the municipalities. They are the sum of all laws, rules and administrative agreements concerning the funding of local government tasks, including the municipalities fund, the specific contributions, the municipalities’ own income, and the Provinces and Municipalities (Budgets and Accounts) Decree (BBV).

In this brochure, the Financial Relations Council provides a brief description of the financial relations between central and local government.