Saving the budget is always for others. The Senate, always careful to show an image of seriousness, especially in matters of public spending, is in the process of carefully clearing all the government’s efforts to reduce local authority spending. And for good reason, the Senate is the representative of these same local commands!
Thus, this Saturday, the senators reduced by one billion euros the effort requested from the communities by the government in the 2025 budget that should in theory find about 60 billion euros in spending savings or tax increases. The Territorial Chamber of the Senate thus defeated the government on several key measures, such as the reduction of the VAT Compensation Fund, a system intended to support investments.
The government’s initial proposal aimed at saving 800 million euros was therefore rejected, because it was judged by senators “unfair because it hits all communities indiscriminately”, according to the centrist senator Bernard Delcros.
On the left, many voices were even more severe on this system proposed by the Barnier government. “If we want local elected officials not to show up again tomorrow, let’s keep going! We’re not very far », worries the communist senator Cécile Cukierman.
Concessions
The Prime Minister, Michel Barnier, who will probably be under the threat of a motion of censure on the series of 2025 budget texts next week, had announced in the past days that he was ready to partially cancel this measure, removing only retroactivity. Or more than 80% of the proposed 800 million, insisted the Minister of Public Accounts Laurent Saint-Martin during the session.
The senators also approved a reform of this FCTVA to allow the funds in question to be paid in the same year as the community expenditure. These would have to wait two years before being compensated according to the current system. Despite intense debates and requests from all sides of the chamber, the Senate did not want to index the inflation of the general operating subsidy (DGF), allocated to local authorities.
So many years of slippage
The government’s goal is still to reduce the public deficit to 5% of GDP in 2025, an objective that we already know will be difficult to fulfill. In its first proposals, the government had hoped to reduce local government spending by 5 billion euros, while the majority in the Senate wants to limit the effort to 2 billion. Hence the tough negotiations to finally set the cursor somewhere between 2 and 5 billion euros.
Obviously, these amounts are not proportionate to the challenge of restoring public finances. Especially since the government retreats step by step in the face of the senators’ attacks. Just spreading it over four years of the increase in pension contributions for territorial agents represents a lower income of 600 million euros in 2025.
But the Senate refuses to see the root of the problem, i.e. the expenditure of local authorities which has fallen by 13 billion euros in 2024. In the end, the initial effort requested by the government does not even represent half of this slippage.
