Helsinki city council’s largest political groups, the National Coalition Party, Greens and Social Democratic Party have reached consensus on key elements of a draft budget for next year.
No major spending cuts are on the table, despite the inroads made by the Covid-19 crisis into the city’s cash reserves. However decision-makers have agreed to spend less on child home care allowances, although the benefit will not be entirely eliminated.
Helsinki pays a supplementary allowance to the parents of children under the age of two who are being cared for at home. The municipal allowance is paid on top of the child home care allowance paid by national benefits agency Kela.
Helsinki currently pays parents 264 euros monthly for each child under the age of 18 months and 218 monthly for children between the ages of 18 and 24 months. The city now plans to curtail the duration of the benefit to apply to children under the age of 12 months. The size of the benefit will remain the same, however.
The support has been important to families with small children. The cuts mean that parents will have to consider placing their children in daycare at a much younger age once their parental benefits run out.
At the same time, the government decided during 2021 budget talks to allocate 70 million euros to reduce early childhood education fees. This measure is expected to boost employment to some extent, as it is believed that it will incentivise parents of small kids to go out to work.
SDP's Heinäluoma: Services a priority
Chair of the SDP council group, Eveliina Heinäluoma, said that measures aimed at safeguarding services and employment are now a priority and that they have been addressed in the budget.
He added that the so-called "stimulus budget" contains significant increases in expenditure and investments.
Meanwhile in addition to services, Reetta Vanhanen, chair of the Greens’ council group highlighted the rapid implementation of mass transit projects.
Alongside the largest parties represented on the city council, the Swedish Peoples Party also accepted the budget proposal.
The budget deal proposes a roughly 900 million-euro investment programme that will be spent on school repairs and metro station renovations. Expenditure in the 2021 budget is expected to grow by between three and four percent.
Vanhanen said that budget negotiators worked hard to ensure that spending on education, training, employment and social and health care would be as effective as possible, even during the dire economic situation resulting from the coronavirus epidemic.
According to Heinäluoma the budget deal will also ensure that Helsinki will not cut city workers’ pay next year. Mayor Jan Vapaavuori’s (NCP) budget proposal suggested eliminating city employees’ performance-related reward scheme, but negotiators agreed to keep the bonus system.
Left Alliance abandons talks
The Left Alliance said that city councillors walked out of the budget talks. Council group chair Anna Vuorjoki said that councillors were disappointed by efforts to soften Vapaavuori's budget proposal.
"In our opinion the proposal was not sufficiently modified," she noted.
Vuorjoki said that the Left Alliance wanted a budget that rolled back the planned cuts to spending on education and training and also focused more attention on the impact of the epidemic on under-resourcing in child protection and disability services.
Other political groups also supported more spending on education as well as social and health care programmes. Heinäluoma said that this goal was achieved.
NCP: Not a budget of cuts
NCP council group leader Daniel Sazonov noted that allocations for spending and investments had grown considerably, so it was not appropriate to talk about a budget of reduced spending.
Unlike other cities, Helsinki’s 2021 budget does not include income or property tax hikes, leaving residents with more cash in hand.
The Left Alliance said that the budget policies outlined will likely result in large classroom sizes. However Heinäluoma said that no decision had been made about class sizes.
The draft budget will next be scrutinised by council groups and will be approved by the Helsinki city council in two weeks. Decisions about taxes will likely be made on Wednesday evening.