In the context of several policies that have been announced since spring 2024, today’s article aims to inform about the policy frameworks in 2025 with a focus on Ravine year 2026.
What is Ravine year 2026?
Ravine year 2026 stands for the introduction of a new financing system which will affect the Dutch municipalities and provinces, and their funds distribution, meaning that these institutions will face a budget cut from the government. As the government will decrease financial contributions for the municipalities and provinces as of 2026, they are left with a major challenge on how to cover the gap between the old financing system and the new one. It has been mentioned that the budget for 2025 will be quite high, but in 2026 a drastic decrease in financing will take place.
What are some of the forecasted consequences?
- These changes will significantly affect the financial stability of municipalities, which are responsible for providing essential services like youth care, infrastructure, education, and social programs. Due to the financial shortfall, municipalities are compelled to make strategic decisions and carefully assess their spending. Many municipal councils are facing challenges in creating balanced budgets and policy frameworks, resulting in uncertainty and potential cuts to crucial services
- The central government contribution per resident will decrease from €137 to just €47
- The scaling discount will be abolished, which means that municipalities will collectively receive less
- Changes in student transport fees
- More budget will be generated via local levies, such as individual municipality taxes and/or company taxes
- Subsidies cut for the non-profits that perform the non-statutory tasks in their municipality, while some non-profits may even no longer receive any subsidy at all
Conclusions
In conclusion, it’s evident that local government finances are undergoing significant changes. Concerning the austerity measures, some remain unclear as to whether they are worth considering. The specific measures and consequences are yet to be announced and the information on this subject is still at a speculation level. However, by taking proactive steps and making informed, data-driven decisions, municipalities can better navigate the challenges of the 2026 financial crisis and continue fulfilling their responsibilities to citizens. Companies can also contribute by maintaining close communication with their respective municipality/province and by staying updated on this subject once the government makes an official statement with the follow-up details.
References
CDA. (2024, July 17). Kadernota 2025 in het teken van het „ravijn jaar 2026“. Retrieved from CDA: https://www.cda.nl/zuid-holland/pijnacker-nootdorp/actueel/nieuws/kadernota-2025-in-het-teken-van-het-ravijn-jaar-2026
Consultancy.nl. (2024, July 08). Ravine year 2026 poses financial challenges for municipalities. Retrieved from Consultancy.nl: https://www.consultancy.nl/nieuws/54604/ravijnjaar-2026-stelt-gemeenten-voor-financiele-uitdaging
Dutch Health Hub . (2024, July 17). Ravijnjaar 2026: bereid je op tijd voor. Retrieved from Dutch Health Hub : https://www.dutchhealthhub.nl/artikelen/ravijnjaar-2026-bereid-je-op-tijd-voor
Nijveld, N. (2024, April 25). Ravine Year 2026 Averted or Moved to 2025? Retrieved from Involon: https://involon.nl/artikelen/ravijnjaar-2026-afgewend-of-verplaatst-naar-2025/
Photo: https://th.bing.com/th/id/R.cfc9747ea6831b71d3783775fd9403e3?rik=AtWd5YKXQ1jMLw&riu=http%3a%2f%2fwww.thebluediamondgallery.com%2fwooden-tile%2fimages%2ffinancing.jpg&ehk=5a2ZrcTISVBF6S93%2bJ81w5pkhVaF%2b9EutKmqBZmUAQw%3d&risl=&pid=ImgRaw&r=0
