This is a shocking approach which risks hitting communities, already under budgetary pressure, particularly due to the economic and social situation. Responsible for identifying savings to bring the public deficit back into line with Europe, the Court of Auditors is proposing this Wednesday, October 2, to restore the workforce of local authorities to their 2010 level. Concretely, this would mean the loss of 100,000 jobs. “Personnel expenses, which represent a quarter of community expenses, are experiencing sustained growth, mainly driven by the municipal bloc,” namely municipalities and intermunicipalities, observes the Court in a report, at a time when France’s public deficit is expected to exceed 6% of GDP in 2024.
“Brutality of proposals”
“While the workforce has increased significantly until recently, despite the absence of new transfers of skills, controlling their development is a central issue,” emphasize the magistrates. The wise men of rue Cambon specify that the “increase in numbers [depuis 2011] mainly concerned intermunicipalities”, which developed over this period, and “was not compensated by an equivalent decrease in the municipalities”. This “gradual return of community staff”, which employ around 2 million people, “at their level of the early 2010s” would save 4.1 billion euros per year from 2030.
This explosive proposal, whose motivations are contested by associations of local elected officials, echoes that of Emmanuel Macron who in 2017 planned to eliminate 120,000 positions in the public service. “Territorial personnel cannot be reduced to an accounting question”, believes the president of the Association of Mayors of France (AMF), David Lisnard, in his written response, recalling that intermunicipalities “are entrusted with powers which are not always previously exercised by the municipalities”. “We cannot subscribe to a proposition consisting in inducing […] a scissor effect in the community budget”, for her part responded the president of Urban France, Johanna Rolland. The AMF denounced the “brutality of these proposals”, who would drive according to her “to an unprecedented weakening of the municipal bloc’s capacity to act.”
In its outlook for 2024, the Court estimates the increase in community operating expenses at +5.4% over the first eight months of the year. In addition to personnel, they are driven by purchases of goods and services boosted by inflation, as well as by social spending linked to the increase in precariousness. Investment spending is also accelerating due to “municipal electoral cycle”, which logically sees the projects voted on at the start of the mandate come to fruition.
Refocus their investments on the ecological transition
However, not all communities are in good health, the report recognizes. As in 2023, municipalities and intermunicipalities are doing well, but this is less the case for the regions, and even less so for the departments, largely weighed down by the fall in transfer taxes levied on real estate transactions. On the revenue side, those of VAT, which replaces the housing tax on main residences, will not be as good as hoped, so that the financial trajectory of communities “slips more and more” compared to what was provided for in the 2023-2027 public finance programming law, warns the Court.
While the Prime Minister, Michel Barnier, wishes to reduce the public deficit below 3% of GDP by 2029, the Court is imagining ways to “participation” communities, recalling that the latter represented 17.8% of public spending in 2023. The report recommends “massify and pool purchases” between communities, a potential source of 5 billion euros in savings per year, and to refocus their investments on the ecological transition. The Green Fund, intended to help communities on this subject, has however been cut by the State and could be cut again in the 2025 budget.
Rather than regulating expenditure, which communities are firmly opposed to in the name of the constitutional principle of free administration, magistrates are counting on a “slowdown in revenue growth”. What could happen at the end of “indexation of cadastral rental values of property taxes to inflation” Or “the capping of part of the VAT dynamic”, first revenue of the communities.