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The administrative branch will undergo a restructuring process on January 1, 2008, when the Department for Municipal Affairs, the Department for Development of Regions and Public Administration and the Local Government IT Management Unit will be transferred from the Ministry of the Interior to the Ministry of Finance. The provincial, registry and State local district administrations will also be transferred to the Ministry of Finance's administrative branch, where the number of personnel will rise from the 10,570 in 2007 to 12,238 in 2008.
In accordance with the Government Programme, the Budget proposal includes dismantling the State local district system as of January 1, 2008. The joint personnel of the State Local Offices will be transferred primarily to the police sector, but some personnel will also be transferred to the Register Office, enforcement and prosecution sectors. The joint appropriation for the State Local Offices will be divided between these sectors.
The appropriations for the administrative branch of the Ministry of Finance come to EUR 6,784 million in the 2008 Budget proposal. Approximately one half of this sum, EUR 3,487 million, is proposed for pensions and compensation paid by central government. A sum of EUR 1,601 million is reserved for financial contributions to the European Union. Overall, appropriations for the administrative branch of the Ministry of Finance will increase by EUR 396 million compared with the 2007 Budget.
Implementation of restructuring continues in local government and services
As of the beginning of 2008, the Ministry of Finance's task in terms of central government's local government policy will be to attend to the development of local government autonomy and to assume responsibility for cooperation between central and local government. These tasks include development of the municipal financing system and the system of central government transfers to local government, general monitoring and forecasting of local government finances, municipal division issues and preparation of legislation concerning municipal administration, employment and pension security of the personnel and cooperation in the local government sector.
The implementation of the restructuring of local government and services will continue in line with the approved framework act. Municipalities will be allocated 3.7 per cent in government grants from the appropriation of the main title of expenditure. A sum of EUR 175 million is proposed for central government transfers to local government, including a cost level adjustment of 4.8 per cent.
The appropriations of EUR 44 million allocated to support merging municipalities, adjustments in the municipal division and local government cooperation take into account the coming into force of one adjustment in the municipal division in 2008. In 2007 there were a total of 14 municipal mergers. A sum of EUR 20 million is proposed for discretionary government grants to municipalities, EUR 5.5 million more than in 2007. As of 2007, discretionary grants will be more tightly tied to the processes reforming local government structures and the provision of services.
Regional administration reform continues
The Ministry of Finance will continue the regional administration reform started by the Ministry of the Interior in June 2007. A full-time secretary-general will be hired to coordinate the preparation of the project, which aims at an efficient and effective regional administration with emphasis on its customers and citizens. The reforms are scheduled for completion by 2010.
The task of the reform project is to draw up proposals and possible options for task portfolios for the regional administration authorities, changes in these tasks, transferring central administration to regional and local administration authorities, reductions in the number of regional administration authorities, adjustments in the regional division and potential new State regional administration authorities.
Productivity boosted
Future increases in the need for services resulting from the changing age structure and control over expenditure pressures will call for improvements in the productivity and efficiency of general government and services. This means making general government more efficient and reallocation of its labour to correspond better to the needs arising from the aging of the population.
The project for restructuring local government and services and the government's Productivity Programme are key measures in seeking improvements in productivity. The Productivity Programme steered by the Ministry of Finance and covering the entire central government comprises over one hundred projects increasing the productivity of the various administrative branches and reforms of general administration and support services that will improve productivity and reduce expenses and the need for personnel.
A sum of EUR 15 million has been reserved to support projects boosting general government productivity in 2008. The spearhead projects of the productivity programmes are a reform of the operating processes, development of the provision of services by increasing electronic business and making State regional and local administration more efficient. The Productivity Programme aims at reducing the need for central government personnel by some 9,600 person work years by 2011. In 2008 the reduction will be some 2,200 person work years.
Further information from the Ministry of Finance Media and Communication Unit, tel. 358 (0)9 160 33059.
Ministry of Finance P.O BOX 28 FIN-00023 GOVERNMENT Tel. +358 9 160 01 E-mail: valtiovarainministerio@vm.fi