Earmarked general grants and general earmarked grants in the Netherlands

1. Earmarked general grants and general earmarked grants in the Netherlands discussion paper for the Copenhagen Workshop: 17-18 September 2009 Hessel Boerboom and Peter Huigsloot

2. General and specific municipal grants in the Netherlands General grants (16 billion) Specific grants (12 billion) local government civil registry arts, sports, entertainment education, employment and income social care income support (sheltered) employment social relief and addicted care youth and family centers youth care social integration and security public services museums physical environment garbage collection physical environment public housing, spatial planning and urban renewal building and environment urban renewal traffic and transport public area public parks, gardens roads, water sewerage

3. Varying types of municipalities: distinguished meaning of specific grants • general law areas of Amsterdam, Rotterdam and the Hague (and provinces) • traffic and transport • youth care • 31 á 45 cities • social relief and addicted care • investment budget urban renewal • social, integration and security • all municipalities, taking in account dissimilarities in social problems • income support • (sheltered) employment promotion • youth and family centers

4. Developments in the use of general and specific grants General grants Specific grants clusters with cost-orientated indicators • decrease in number • wide target grants integration grants • collective specific grants decentralization grants

5. Convergence in the use of general and specific grants • strong relationships in the financing of services • large city problems • care • public order and security • employment and income • road infrastructure and public transport • general grant features of specific grants • less specific conditions of reporting and accountability • broadening and less conditional • same methods of compiling the allocation • collective specific grants • specific grant features of general grants • clusters and cost-orientated indicators • use of highly target-orientated indicators • integration and decentralization grants

6. Background of the convergence: changing institutional environment • new views of today politics versus conventional theory • more effectiveness • reduction of administrative and executive costs • significance of laws, rules, covenants • incorporation specific grants in the Allocation of Finances Act • periodical maintenance • well-founded quantified indication financial implications of changes • significance of interrelated objective, cost-orientated indicators • single information, single audit (SISA)

7. The policy view

8. Why do we reduce the number of SG,s • Because we ought to... • Not popular with other departments or with local government: earmarking ring-fences the budget on both levels • Changing the institutional relation between CG,LG and “society” to achieve more efficient government and accountability

9. “Side-”effects? • Change in position of Minister for the Interior vis-a-vis collegues: more information, more control? • Change in position of local finance department vis-a-vis other departments: more information, more control?

10. Effects on relation CG-LG-Soc? • Very little (in the short term?): • Example Care: Gen.Grnt but LG interest groups talk to care-ministry on distribution and volume • Example Schools: Gen.Grt but min for educ still very involved • Example Income Support: Spec.Grt but LG seeks support of min for interior on distribution.