the effort required of the departments will be reduced “very significantly”, announces Michel Barnier

The government is giving up. Michel Barnier, who spoke this Friday late morning in Angers before the Assembly of French Departments, announced that the budgetary effort requested from the departments would be reduced. “I am here to tell you, taking into account your very specific situation which may not have been well seen in the first budgetary scenarios, that we are going to very significantly reduce the effort required of you by the draft finance law”declared the Prime Minister from the podium, provoking applause from the local elected officials present in the room.

The tenant of Matignon noted a ““departmental model” as known for 30 years” arrived “to its limits”. But he did not provide figures on the drop in this contribution, which “will depend on the discussion in the Senate”specified Matignon. The departments are facing an explosion in their social spending on child protection and assistance for dependent elderly people or people with disabilities but at the same time are seeing their revenue from real estate transactions plummet and recording less VAT than 'expected.

The finance bill for 2025 provides for an effort of five billion euros for communities, but according to Departments of 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. The departments therefore demanded that the government review its copy. Those led by the right and the center threatened Thursday to suspend the payment of active solidarity income (RSA) and to stop taking care of new unaccompanied minors (UMA).

Five measures announced

To give them fresh air, the Prime Minister announced five measures: the reduction in the rate of levy on departmental revenues, initially planned by 2%. Michel Barnier recognized that a “important part” of their expenses was not “not pilotable”. Highly awaited by the departments, he also announced an increase for three years in the ceiling of 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 head of government Barnier also announced his desire to return «the least» on 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 thinking about the creation of a “single social allowance”. “Social policies must now be designed jointly by the State and the departments”he stressed, pleading for a “multi-year contractualization which will anticipate and limit” the evolution of departmental expenditure.

The same morning, on Franceinfo, executive spokesperson Maud Bregeon had already opened the door to a reduction in the savings requested from the departments as part of the 2025 budget. “The door is open to reducing the effort compared to that which is requested today, because we are aware that a certain number of departments are today in extremely complicated situations”she declared.