Ikonen reminded that Tampere is a Finnish success story that should be continued with strong, forward-looking joint activities. The budget proposal will be approved by the City Council on 14 November.
– The preparation of the budget responded to the increasing need for services, rising cost levels, increasing obligations and the impacts of the health and social services reform, while ensuring that the economy is in balance. Investments have been curbed, but Tampere's investment need and level will remain high in 2023. The key investment targets are schools and day-care centres. The aim is to implement the investments without additional incurring of debt, Ikonen says.
In 2023, the budget's annual margin will be EUR 126.9 million and the profit for the financial year will be in balance, i.e. 0. Taxes are not increased. The municipal tax rates of all municipalities will be cut by 12.64 percentage points due to the health and social services reform. Correspondingly, central government taxation will be tightened. Tampere's new income tax rate is 7.61% (current: 20.25 %).
After the social welfare and health care transfer, the promotion of vitality and education is particularly emphasised in the city's work:
– Cities that invest in skills, the future and in the attractiveness of the city will be successful in the future, and we will continue to do so. Our goal is to continue to be the best place to grow, study and work, Ikonen says.
– Tampere is known for its bold investments in the future, examples of which are the Rantaväylä tunnel, tramway and Nokia Arena. Now we are building on the benefits of these far-reaching decisions and developing the city further, for example through the experience area of Särkänniemi and by strengthening the position of the western city centre as a distinctive cultural city district.
The responsibility for organising social welfare and health care services and rescue services will be transferred from municipalities to the wellbeing services counties from the beginning of next year. Due to the health and social services reform, the city's tax funding and net costs will be reduced by approximately EUR 0.9 billion. The reform has no significant impact on the city's economic equilibrium.
– During a historic change, co-operation between the city and the wellbeing services county is extremely important. In 2023, we will, together with the wellbeing services county, focus on ensuring that city residents receive their services smoothly and seamlessly. We also promote well-being in the city's work, for example through town planning and the development of sports and cultural services and the city centre, Ikonen emphasises.
The reform will create several jointly managed tasks between the city and the wellbeing services county. In particular, close cooperation is required: Promotion of well-being and health, organisational coordination and support from organisations, student welfare services, employment services, integration services for immigrants, planning of land use and service networks, family centre activities, platform services for wellbeing centres, as well as preparedness and environmental health.
Persons working in the city's social welfare, health care and rescue services will be transferred to the Pirkanmaa wellbeing services county as well as student welfare psychologists and social workers. In addition, personnel will be transferred from the support service tasks of the Group administration to the wellbeing services county. The number of employees in the city will decrease by approximately 5800 person-workyears compared to the annual plan for 2022. Movable property and agreements and responsibilities used by social welfare and health care services and rescue services will also be transferred to the wellbeing services county. The city leases its owned social welfare and health care and rescue services premises to the wellbeing services area with a lease agreement of 3 + 1 years (106 pcs). The lease is determined in accordance with the lease decree.
– The final impacts of the health and social services reform on tax funding will be obtained in 2023 and 2024. It is increasingly important to keep the growth in the city's operating expenses lower than the growth in tax financing, and the implementation of investments should be spread over a longer period of time, Ikonen says.
– In the coming years, the situation of local government finances will be challenging. We are preparing for this through an economic and productivity programme, which will help us, for example, to develop the calculation of unit costs and the investment process.
Due to migration, new and renovation investments in the building stock, the organisation of public transport and investments in vitality, the city's investment needs will remain substantial in the next few years. In 2023, nearly half of the investments will be targeted at building construction projects. The total external investment expenditure of the city and unincorporated enterprises is EUR 222.2 million (net).
– Although investments have been curbed, the level remains high. Incomes financing (annual margin) is not sufficient to cover investments, the percentage of incomes financing for investments is 57%. However, the intention is not to take out a new loan to finance the investments next year. Instead, the need for financing will be covered by the sale of assets and by cash funds, says Juha Yli-Rajala, CEO of the Group.
The largest investment expenditure is building construction investments of EUR 109.6 million by the Housing and Real Estate Board and basic investments of EUR 50 million by the municipal board.
Local government finances will be assessed on a permanent basis, especially in 2024–2026, so balancing the finances is a key objective for the financial planning period. In order to balance the economic situation, an economic and productivity programme has been drawn up for 2023–2026.
– In the future, we must reconcile the city's investments and revenue financing in a balanced manner so that the city's loan amount does not grow uncontrollably. The measures of the economic and productivity programme are intended to put the city's economic structures on a more sustainable basis, Yli-Rajala says.
Tampere seeks cost savings in digitalisation, for example, and unit costs are used to examine the costs of services in order to better understand the structures of the economy of a growing city and the impacts of measures that improve productivity.
In 2023, sustainable growth and attractiveness will be promoted further in urban planning and infrastructure construction. The residential areas to be implemented include the northern axis of Hervanta, the single-family house centred Ojala, Tohlopinranta and Rahola next to the railway line, and the business area of Kolmenkulma is also under construction. The most important sites in the planning are Viinikanlahti, Nurmi-Sorila and the west side of Alasjärvi.
The Tampere City Group also invests significantly through its group organisations. The investments of the most significant Group entities will amount to approximately EUR 262 million next year. The Group's investment level is approximately EUR 489 million. The most significant investments are made by Tampereen Raitiotie Oy, the Tampereen Sähkölaitos group and Tampereen Seudun Keskuspuhdistamo Oy. The largest individual investments are the investments in the tramway system of Tampereen Raitiotie Oy and the Sulkavuori central purification plant of Tampereen Seudun Keskuspuhdistamo Oy.
The growth prospects of Tampere's 12 most significant subsidiaries will be positive in 2023; the turnover forecast will increase by more than EUR 100 million. On the other hand, the total net profit of the group companies is expected to decline clearly. The estimated total net result of EUR 33.3 million is clearly less than the current year's profit forecast. Among other things, the Tampere electricity department group Tampereen Sähkölaitos is experiencing a decline in its net result. Due to the very difficult market situation, there is considerable uncertainty in the forecast.
The city group's most significant climate investments in 2023 are related to the tramway and improving the energy efficiency and building automation of buildings as well as the installation of solar panels and heat pumps. In addition, LED lights in lighting, natural stormwater solutions as well as walking and cycling roads will be increased.
| Population 31 December 2023 | 250,000 inhabitants |
| Income tax rate | 7.61 per cent |
| Personnel | 8274 person-workyears |
| Annual margin | EUR 126.9 million |
| Revenue | EUR 1,081 billion |
| Expenditure | EUR 1,081 billion |
| Result | EUR 0 million |
| Total investment (net) | EUR 222.2 million |
| Loan amount per resident | EUR 3728 |
Mayor Anna-Kaisa Ikonen's budget proposal can be viewed in more detail on the city's website at www.tampere.fi/talous (in Finnish).
