Better performance and fiscal discipline for the 2027 budget
The 2027 budget for the Municipality of Hafnarfjörður, which has been presented for the first reading. The emphasis is on strengthening operations, limiting recruitment and prioritising investments.
Working on the budget for Hafnarfjörður
The 2027 budget for the Borough of Hafnarfjörður, which has been presented for its first reading, provides for a surplus of approximately one billion krónur from the operations of the borough and its enterprises. The surplus for Section A, which covers the main operations of the municipality, is estimated at approximately 313 million króna.
- The emphasis is on strengthening operations, limiting recruitment and prioritising investments.
The first reading of the plan took place at the town council meeting on Wednesday. A long-term plan for the years 2028–2030 was also discussed. The plan was unanimously referred to the town council's executive committee for further consideration and to a second reading in the town council.
Working steadily in the position
Mayor Thórður Thórarinsson said at the meeting that the half-yearly accounts showed the city's financial position to be considerably worse than had been anticipated. The deviation from the forecast was 2.8 billion króna.
„These figures must be taken seriously. They call for clear responses: increased austerity and difficult decisions regarding next year's budgets,“ he said, and was supported in the plans he put forward.
Orri Björnsson, chairman of the town council, said at the town council meeting that it was important for the Municipality of Hafnarfjörður to be a well-run local authority. It was important to think for the future.
„I am pleased with what the staff of Hafnarfjörður have managed to put forward, a good plan which will of course undergo some changes before it is finalised in December. But this plan, as it stands now, shows us that it is possible to achieve a strong recovery in the town's operations,“ said Orri.
Aiming for a turnaround in operations
The forecast for 2026 projects a deficit of approximately 2.38 billion krónur in the A-section and a deficit of approximately 1.37 billion krónur for the municipality as a whole. Next year's plan therefore includes an improvement of approximately 2.69 billion krónur in the A-section's performance.
Operating revenues for Section A are estimated at 51.87 billion króna in 2027, and the group's revenues at 55.76 billion. Wages and salary-related costs for Section A are estimated at 25.90 billion króna, and other operating expenses at 19.11 billion.
A capital gain of approximately 989 million króna is expected in 2027, which will have an upward effect on the operating result. The projected surplus is therefore partly based on asset sales.
Recruitment restricted and executive pay frozen
It was stated at the meeting that optimisation measures within the town's administration have been approved. The aim is to promote more cost-effective and efficient operations and to improve the use of financial and human resources.
Establish a recruitment committee that must approve appointments to positions outside core services. Vacant posts will not be automatically re-filled.
- It will continue to be permitted to make appointments due to normal staff turnover in nurseries, primary schools and homes for disabled people, provided that certain specified conditions are met.
It has already been agreed that the salaries of the mayor and department heads will be frozen for two years. It has also been agreed that rules will be drawn up to limit and condition new investments during the same period.
The core operations need to be strengthened.
A KPMG summary, which accompanies the plan, points out that the town's financial position has worsened, particularly in the A-section. The generation of funds from operations has been insufficient to cover the repayment of debts and liabilities.
Emphasis is placed on improving core operations, prioritising investments, improving asset utilisation and selling assets that do not belong to core services. Furthermore, clear financial targets and targeted monitoring are called for.
Yes, now the operation will be put right and improved for the future.
Yes, now the operation will be put right and improved for the future.