The corona pandemic cost Norwegian municipalities and counties 14 billion kroner in 2020

Various measures and lockdown during the pandemic led to municipalities paying an extra NOK 14 billion last year, a new report shows.

At the same time, the municipal sector has received around NOK 20 billion in increased subsidies and extra transfers. 

More than two thirds of the funds were provided as compensation for increased expenses and reduced income.

“Throughout the corona crisis, the Norwegian government has been clear that it would stand by the municipalities by compensating them for increased expenses and lost income. The report shows that we have done just that,” Minister of Local Government and Modernization Nikolai Astrup (H) noted in a press release.

Health-related costs

In addition, the municipalities have saved money on lower price and wage growth and reduced employer contributions, the report – made by a working group with representatives from the Norwegian Association of Local and Regional Authorities (KS) and the state – notes.

In total, the pandemic has cost the municipalities NOK 10 billion and the counties NOK 4 billion.

The health and care sector is – not surprisingly – responsible for around half of the estimated additional expenditure. 

Increased expenses for salaries, testing, infection tracking, infection control equipment, and costs related to isolation and quarantine are the largest single items.

However, there are large cost variations between the municipalities in terms of the TISK strategy (testing, isolation, infection detection, and quarantine).

Lost revenue

At the same time, the municipalities lost income as a result of closed doors in schools and kindergartens when Norway closed down last year. 

The municipalities also experienced a loss of income in culture and sports.

For the counties, the financial consequences of the pandemic are mainly related to reduced ticket revenues in public transport.

Source: © NTB Scanpix / #Norway Today / #NorwayTodayFinance

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