Balance of revenue and expenditure

  • ESA financing balance of Flemish Authorities strongly decreased to -6 billion euros

    In 2020, the ESA financing balance according to the Institute for National Accounts (INA) was -5.4 billion euros (in current prices). The ESA financial balance as measured by the High Council of Finance (HCF) is used by the Flemish Authorities as a yardstick. It amounted to -6.0 billion euros in 2020. The extensive policies to combat the Covid-19 pandemic were the main reason for the very high negative balance.

    According to the Institute of National Accounts (INA), the ESA financing balance is equal to the difference between ESA revenue and ESA expenditure, with the exclusion of new loans or leasings, repayments of loans and leasing debts and the investments in and the sale of financial fixed assets. We call this the ESA financing balance (INA).

    In the aftermath of the 6th state reform, the ESA financing balance (HCF) has been calculated according to the method of the High Council of Finance (HCF).

    In the aftermath of the 6th state reform, the ESA financing balance (HCF) has been calculated according to the method of the High Council of Finance (HCF). The large difference between the two variants from 2015 onwards is due to the method used for the calculation of the surcharges on income tax which  became a competence of the Flemish Authorities after the 6th state reform. The HCF method implies a more balanced distribution of the surcharges over the years from 2015 onwards and consequently a flatter evolution of the ESA financing balance (HCF).

    Both variants of the ESA financing balance were equal between 2010 and 2014. In 2010 there was a balance of -1.5 billion euros. That balance rose to 17 million euros in 2012, followed by a decrease to -718 million euros in 2014.

    In 2015, the ESA financial balance (INA) dropped to almost -3.4 billion euros, subsequently rose to 1.4 billion euros in 2017, but strongly decreased to -691 million euros in 2018. (including 1 billion euros for the negative settlement of the funds from the Special Financing Act). In 2019 it rose again to 382 million euros, but in 2020 it fell very sharply to -5.4 billion euros, mainly due to the extensive policies to deal with the Covid-19 pandemic.

    The ESA financing balance (HCF) rose steadily from 2014 onwards to 807 million euros in 2017, but again dropped to -698 million euros in 2018. In 2019 it rose again to 119 million euros, but it dropped very sharply to -6.0 billion euros in 2020.

  • Budgetary result of Flemish municipal increased very strongly

    With a 902 million euros, the budgetary result  of the Flemish municipal authorities (including the Antwerp districts) was strongly positive in 2020.  This figure does not include the budgetary result of the Public Centers for Social Welfare (PCSW), although since 2020 municipal authorities and PCSW have a joint policy report including the joint financial results.

    The municipal authorities use the budgetary result of the financial year as a yardstick for their policy. The budgetary result is the difference between all revenue and all expenditure for the financial year.
    The budgetary result decreased from 229 million euros in 2010 to almost -700 million euros in 2014. In 2015, it increased to 1,035 million euros, but it declined again to -496 million euros in 2018. In 2020 there was again a very high positive result.

    The Institute of National Accounts (INA) also calculates the ESA financing balance for the Flemish municipal authorities. The ESA financing balance is equal to the budgetary result, with the exclusion of the financial capital transactions, which include the borrowing and repaying of loans. The yardstick can be used for a comparison with other entities.
    The ESA financing balance is also moving up and down. The ESA financing balance was 353 million euros in 2020. It was positive in the period 2015-2017, but decreased in 2018 to a negative amount of almost -400 million euros. In 2019 and 2020, the ESA financing balance increased sharply again.

     

  • Budgetary result of other local authorities fell very sharply

    The joint budgetary result of the other local authorities other than the municipal authorities stood at almost -895 million euros in 2020. These are autonomous municipal companies (AMC), public centers for social welfare (PCSW), PCSW associations, provincial authorities (PA) and autonomous provincial companies (APC).

    The data on the budgetary results of the other local authorities are only available from 2014 onwards. The budgetary result rose from 118 million euros in 2014 to almost 219 million euros in 2015. It fell to almost 40 million euros in 2016, but then rose again to more than 84 million euros in 2018. In 2020, the budgetary result fell very sharply to almost -895 million euros.

    The ESA financing balance of the other local authorities calculated by the Institute for National Accounts (INA) amounted to more than 66 million euros in 2020. The ESA financing balance increased from over 19 million euros in 2014 to almost 175 million euros in 2016, followed by a sharp decline to -101 million euros in 2018. In 2020, the ESA receivable balance was positive again.

    As of 2015, the budgetary result and ESA financing balance evolve in the opposite direction. In 2014 and 2015, the ESA financing balance was much lower than the budgetary result, in 2016 it was much higher, but in 2018 it was much lower again. In 2019, the two measures came closer together again, but in 2020 the difference was very large due to the very sharp decline in the budgetary result.

  • Large differences among other local authorities

    There are large differences in the budgetary results between the other local authorities.

    In 2020, the Public Centers for Social Welfare (PCSW) had a negative budgetary result of almost -726 million euros, compared to almost -124 million euros in 2019 and positive amounts in previous years, up to 150 million in 2015.

    In 2020, the budgetary result of the autonomous municipal companies  stood at -31 million euros. In 2014 the result amounted to 9 million euros and rose to 51 million in 2015. In 2016 it dropped to almost -30 million euros but rose again to a positive amount in 2019. In 2020, the budgetary result again fell sharply below zero.

    There was an increase for the PCSW associations from nearly 4 million euros in 2014 to more than 47 million in 2016. This is followed by a sharp decrease in 2017, a sharp increase in 2018 and another sharp decrease in 2019 and 2020.

    The budgetary result of the provincial authorities rose from -22 million euros in 2014 to 1.4 million in 2016. After that, the result fell again to almost -28 million euros in 2018, it rose sharply again in 2019 to more than 60 million euros, but fell again very sharply to -147 million euros in 2020.

    Finally, the budgetary result of the autonomous provincial companies (APC) increased from 6.6 million euros in 2014 to 16 million euros in 2015, followed by a decrease to -1.1 million euros in 2019 and a sharp increase to 6 million euros in 2020.

  • Only 1 municipal authority with a negative budgetary result

    The budgetary result of the municipal authorities in euro per inhabitant varies considerably from one municipality to another. No clear pattern can be identified in the differences.

    In 2020, 299 of the 300 municipal authorities had a positive budgetary result and only 1 municipal council had a negative result.

    Only the municipality of Schelle had a negative result of -173 euros per inhabitant.

    In 50 municipalities there was a positive budgetary result of 0 to 200 euros per inhabitant (including the center cities of Ostend, Mechelen and Roeselare). In 228 municipalities (including the center cities of Leuven, Ghent, Kortrijk, Bruges, Genk, Sint-Niklaas, Turnhout and Aalst) the result was between 200 and 400 euros. The budgetary result amounted to 400 to 600 euros per inhabitant in 20 municipalities (including the center cities of Hasselt and Antwerp) and more than 600 euros per inhabitant in Middelkerke (882 euros).

Sources

Flemish Authorities
Department of Finance and Budget: Website - ESA Financial Balance
Institute of National Accounts (INA): Website
National Bank of Belgium (NBB): Database Public Finance

Local authorities
Agency for Home Affairs: BBC - data and analyses 
Institute of National Accounts (INA): Website
National Bank of Belgium (NBB): Database Public Finance

 

Definitions

ESA financing balance (INA): the difference between ESA revenue and ESA expenditure, with the exception of:
-
loans and repayments of debt,
credit provision and participations,
internal flows: revenue from and expenditure to the institutions to be consolidated.

ESA financing balance (HCF): variant of the ESA financing balance calculated according to the method of the High Council of Finance (HCF method). 
The HCF method no longer follows the rhythm of the registration and processing of tax files of the taxpayer person/household. It is based on a balanced offsetting of advances, pre-financing and amounts received. Consequently, the surcharges on personal income taxwere transferred to the Flemish Authorities after the 6th state reform, are spread equally over the years. The HFC method consequently leads to a more continuous evolution of the ESA financing balance (HCF).

The budgetary result of the financial year of the local authorities: the difference between all revenue (operating revenue, investment revenue and other revenue) and all expenditure (operating expenditure, investment expenditure and other expenditure) for the financial year. The balance of the previous financial years is not taken into account.

Current or nominal prices: prices for the year in question, not adjusted for inflation.

 

Publication date

18 November 2021

Next update

November 2022

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