Tampere facing major changes in difficult times
Anna-Kaisa Ikonen, Mayor of the City of Tampere, presented her proposed budget for 2015 on Monday, 27 October 2014. Despite the difficult economic situation, the City of Tampere guarantees the availability of basic services and the most relevant social, health and education services. Decisions on the proposed budget will be taken by the City Council on 17 November.
– We are facing a year of major challenges and reforms. The budget proposal has been prepared in a period of difficult changes. The municipal reform and social and health care reform, the changes in population growth and age structure and the requirements to balance the municipal economy all bring challenges with them, Mayor Ikonen says.
The goal is to reduce the city’s net expenditure by 1.4 per cent from this year’s forecasted financial statements.
– This is exceptional and highly challenging. The lines of business have been forced to find savings and refrain from any service reforms which would increase costs, and the budget proposal is still approximately EUR 10 million in deficit, Group Director Juha Yli-Rajala says.
The budget stands at EUR 1.75 billion. Despite all the operations initiated in order to balance the budget, the result for the financial year will next year still be clearly in deficit.
– We may need to initiate city-wide staff reduction negotiations in order to cut personnel costs. The staff reduction negotiations also provide an opportunity to review job contents and renew operations in cooperation with the staff, Ikonen says.
The city’s personnel costs next year will amount to EUR 678.3 million. Of all employees, 72% work in welfare services, representing EUR 488.5 million of the total. The most significant factor reducing personnel costs is the reduction of man-years as a result of the balancing operations included in the budget proposal for 2015. The planned personnel for 2015 amounts to 13,888 paid man-years in total.
The challenges facing the city’s economy are caused by the changing economy and the difficulties the export industries are facing. In addition, the state is balancing its own finances by further cutting the state grants to municipalities, while the legally required duties of municipalities are not reduced in proportion.
– We will be focusing on prevention, early intervention and sports and leisure services next year. We will strengthen the development of children and young people, basic healthcare and support services for senior citizens living at home. We will develop the service network together with digital services, and will increase the speed of structural reforms, Ikonen explains.
Prioritisation of investments required
The annual margin of the proposed budget is EUR 78.7 million, which is too little for the required investments, says financial director Jukka Männikkö. The annual margin indicates how much of the city’s internal financing available for investments, repayment of loans and other long-term expenditure.
Investments important for the development and structure of the city will require substantial financing next year. The investments are funded with the city’s own internal financing and the repayment of the loan paid by Tampereen Sähkölaitos Oy to the city, which means that the city’s total debt will be reduced next year.
– Tampere has one of the lowest levels of debt per citizen of major cities, but it will increase rapidly unless we are able to improve the annual margin, Männikkö says.
In terms of investments, projects creating employment, growth and appeal will be prioritised. The city uses the investments to maintain and develop its assets and to respond to growth and construction needs.
A total of EUR 220.7 million is reserved for the city’s investments in the proposed budget for next year. The biggest single investment is the Rantaväylä tunnel at EUR 51.4 million. EUR 68.2 million is reserved for residential construction investments of The Tampere Real Estate Services, including the renovation and expansion of the international school (EUR 8.2 million). The renovation of the Rauhaniemi hospital continues with EUR 3.8 million and that of the Tampere swimming centre with EUR 2.4 million. EUR 1.5 million is reserved for the Tesoma ball games centre.
In addition to the Rantaväylä tunnel, regional construction projects and the tramline project, a total of EUR 39.4 million is spent on city planning and infrastructure. Streets, routes, markets and squares will be renovated with EUR 5.4 million, and new ones built with EUR 12.8 million. EUR 26.3 million is reserved for the investments of Tampere Water, of which EUR 10.9 million is spent on water supply renovations and new areas, and EUR 10 million on the renovation of the Kaupinoja water pumping plant.
Focus areas of activities and services in 2015
In Child and Youth Services, family services will be strengthened and open early education services and voucher-based day care will be increased. Legislation restricting the subjective right to day care will become applicable.
In Services Promoting Health and Functional Ability, basic healthcare will be strengthened and electronic appointments for healthcare services will be expanded. The operations of small dental clinics will be joined into larger units. Facilities supporting the reduction of long-term homelessness will be completed in Härmälä and in the Pispala fire station.
The focus in Services for The Senior Citizens will continue to be shifted from long-term institutional care to services that support living at home. Lähitori-operations will be started in service centres.
In the city’s Services for Education, Competence and Economic Development, activation of long-term unemployed people and employment management services will be increased. In Services Promoting Culture and Quality of Life, the planning of the Kaleva sports park will be started, and a spreadable synthetic ice will be acquired for the Pyynikki field. Tampere Swimming Centre will reopen after the renovation, and an outdoor swimming pool will be constructed nearby the Swimming Centre.
In Services City Planning and Infrastructure, special focus is paid to the planning of the Kunkun parkki underground car par, Eteläpuisto area, the Travel and Service Centre and the Tulli area. The tramline project is advanced by organising competitive bidding for the planning, construction and fleet acquisition groups.Conditions for increased employment are created by planning commercial plots in Linnainmaa near Sammon valtatie road and in the Aitovuori region.
City of Tampere budget for 2015 in numbers
Population 31 December 2015……………224,900 inhabitants
Income tax percentage…………………….19.75
Budget total………………………………….EUR 1.750 billion
Increase in operating costs……………….-1.4%
Annual margin………………………………EUR 78.7 million
Result………………………………………..EUR -9.9 million
Total investments…………………………..EUR - 212.5 million
Debt per citizen …………………………….EUR 1,678
For further information concerning the proposed budget, go to tampere.fi/hallintojatalous/talous/talousarvio/talousarvio2015, containing the proposed budget and visual materials concerning the budget (in Finnish):
Text Satu Aalto