The budgetary effort requested from the departments as part of the 2025 budget will be reduced “very significantly” to take into account their “very specific” situation, Prime Minister Michel Barnier announced on Friday, November 15 at the close of the meeting of the Départements de France. “I am here to tell you that, taking into account your very specific situation, we are going to very significantly reduce the effort required of you by the finance bill,” declared Michel Barnier, noting a “‘departmental model’ as known for 30 years” reached “its limits”. However, he did not provide figures for the reduction in this contribution, which “will depend on the discussion in the Senate”, said Matignon.
The departments are facing an explosion in their social spending on child protection, assistance for dependent elderly people and people with disabilities, but at the same time are seeing their revenue from real estate transactions decline and are recording less than VAT as expected. The finance bill for 2025 provides for savings of 5 billion euros for communities, but according to Départements de France, the departments are the most impacted stratum of communities, with 44% of the effort, or 2.2 billion euros, even though their economic situation is recognized as fragile.
Earlier in the day, executive spokesperson Maud Bregeon announced that the government was ready to reduce the effort required of the departments, in response to threats from some of them to no longer pay the RSA to protest against the requested cuts. “We are aware that a certain number of departments are today in extremely complicated situations,” she declared on franceinfo.
Five measures announced
The departments demanded that the government review its copy, and those led by the right and the center had also threatened to stop taking care of new unaccompanied minors (UMAs). Michel Barnier had already said he was ready in an interview with West France to “significant adjustments” in favor of communities.
In Angers, the Prime Minister announced five measures, starting with the reduction in the rate of levy on departmental revenues, initially planned at 2%. Michel Barnier recognized that a “significant part” of their spending was “uncontrollable”. He also announced an increase for three years in the ceiling on transfer taxes for valuable consideration, levied on real estate transactions, to the tune of 0.5 points, a measure which should bring in one billion euros.
The Prime Minister also announced his desire to return “at a minimum” to the retroactive nature of the reduction in the rate of the Compensation Fund for value added tax, aid for community investment expenditure. The contributions paid to the departments by the National Solidarity Fund for Autonomy will also be increased to the tune of 200 million euros in 2025. Finally, the increase in contributions from territorial employers to the National Retirement Fund for Local Authority Agents will be spread over four years instead of three.
In the longer term, Michel Barnier announced the creation in early 2025 of a “steering body shared between the State and the departments” responsible in particular for considering the creation of a “single social allowance”. “Social policies must now be designed jointly by the State and the departments,” he stressed, pleading for “multi-annual contractualization which will anticipate and limit” the evolution of departmental spending.