The Swedish Agency for Public Management

The municipal equalisation system – a description of the system from 2014 (2014:2)

Statskontoret (the Swedish Agency for Public Management) has as part of its instructions been tasked to monitor the system of equalisation in municipal finances. As part of this task, Statskontoret has previously published the report, "The municipal equalisation system - a description" (2012:21). As of 1 January 2014, many changes have come into force for the equalisation system. Statskontoret has therefore updated the previous report.

This report describes the five different components of the equalisation system that are effective from 2014. (The parts are income equalisation, cost equalisation, structure contributions, introduction subsidies and regulatory records.) Each part is described in a separate section. The emphasis has been on describing the various sub-models in the municipal cost equalisation system.

The report begins by outlining the purpose of the equalisation system and how the system is financed and who does what in the municipal system.

For each sub-model in cost equalisation system there is an account of the method of calculation of standard costs or equivalent; the values included in each model; the frequency in which the different values are revised; and, the sources of the different variables and constants. Changes and revision to the models are also briefly described.

The report describes the system and its operation. However, we do not report any outcome statistics. The Statskontoret's report "Municipal equalisation since the mid-1990s - development, operation and problem areas" (2013:19) reports, among other things, how the appropriation from central government to the municipal financial equalisation and the outcome for groups of municipalities and county councils has developed over time. Statistics Sweden's website shows the outcome for individual municipalities and county councils under the public finances subject area. The outcome of the current equalisation year are published in mid-January each year.

Supporting documentation for updating the description has been the report "Equivalent conditions – Review of the municipal equalisation" (SOU 2011:39), the Budget Bill for the 2014 parliamentary resolution, SCB's documentation of the equalisation system and the Act (2004:773) and Ordinance (2004:881) on municipal financial equalisation.

A parliamentary committee called the equalisation committee.08, proposed several changes to the equalisation system in its report. The lion's share of the changes that came into force in 2014 are based on draft proposals from the investigation.