De Rosa/AFP
The Court of Auditors, responsible for identifying ways to save money to bring the public deficit back into line with European standards, unveiled a shock measure on Wednesday: restoring local authority staff numbers to their 2010 levels, which would amount to a reduction of 100,000 jobs.
“Staff costs, which represent a quarter of local authority expenditure, are experiencing sustained growth, mainly driven by the “communal bloc”, namely the municipalities and inter-municipalities, the Court observes in a report, at a time when France's public deficit is expected to exceed 6% of GDP in 2024.
“While staff numbers have increased significantly until recently, despite the absence of new transfers of skills, controlling their development is a central issue”, the magistrates stress.
The magistrates of rue Cambon specify that the “increase in staff numbers (since 2011) has mainly concerned inter-municipalities”, which have grown over this period, and “has not been offset by an equivalent decrease in the common”.
They advocate a “gradual return of local authority staff”, which employ around 2 million people, “to their level of the early 2010s”, i.e. a “reduction of 100,000 jobs”, which would save 4.1 billion euros per year from 2030.
This potentially explosive proposal, the motivations of which are contested by local elected representatives' associations, echoes that of Emmanuel Macron, who in 2017 considered eliminating 120,000 civil service positions.
“A falsely rigorous analysis” reacted the Association of Mayors of France (AMF) in a press release on Wednesday evening, explaining that “contrary to what the Court maintains, there has been no significant increase in municipal staff costs and intercommunalities”, which only progress “by 0.4% per year on average, after deduction of inflation”.
“It is also false to claim that municipalities and inter-municipalities do not assume any new responsibilities,” continues the AMF, stressing that there have been “numerous transfers of responsibilities from the State to local authorities that have not been compensated for,” such as the maintenance of dikes or municipal police forces.
The magistrates of the Court of Auditors defend a “pooling scheme” between the different levels of local authorities that “must enable public services to function better.”
In its outlook for 2024, the Court estimates the increase in local authority operating expenses over the first eight months of the year at +5.4%.
In addition to personnel, they are driven by purchases of goods and services boosted by inflation, as well as by social spending linked to the increase in precariousness.
– “Skid” –
Investment spending is also accelerating due to the “municipal electoral cycle”, which logically sees the projects voted on at the start of the mandate come to fruition.
However, not all local authorities are in good health, the report acknowledges. As in 2023, municipalities and inter-municipalities are doing well, but this is less the case for regions, and even less so for departments, which are largely weighed down by the fall in transfer taxes for consideration (DMTO) levied on real estate transactions.
In terms of revenue, VAT revenue, which replaces the housing tax on primary residences, will not be as good as hoped, so much so that the financial trajectory of local authorities is “increasingly slipping” compared to what was predicted in the 2023-2027 public finance programming law, warns the Court.
While Prime Minister Michel Barnier wants to bring the public deficit below 3% of GDP by 2029, the Court is imagining ways for local authorities to “participate”, recalling that they represented 17.8% of public spending in 2023.
The report recommends “massifying and pooling purchases” between local authorities, a potential source of 5 billion euros in savings per year, and refocusing their investments on the transition ecological.
Rather than controlling expenditure, which is firmly opposed by local authorities in the name of the constitutional principle of free administration, the magistrates are counting on a “slowdown in the growth of revenue”.
This could involve ending “indexing property taxes on inflation of cadastral rental values” or “capping part of the VAT dynamic”, the primary source of income for local authorities.
“We cannot support a proposal that involves inducing (…) a scissor effect in local authority budgets”, responded the president of France urbaine Johanna Rolland.
“Rather than continuing to draw on local resources or seeking to control local authority spending, which (…) has never had any impact on national deficits, we need to restore order to the state and social accounts”, declared for her part the AMF.
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