Ghent and Antwerp will lose significantly from a fairer distribution of Municipal Fund billions (Ghent)

To fairly distribute the 3 billion euros that flows annually from the Municipal Fund to cities and municipalities, Ghent and Antwerp would have to make a significant sacrifice. This is evident from a long-awaited study by researchers affiliated with three Flemish universities, the results of which can be read in De Tijd and De Standaard.

It is a recurring complaint from not all mayors: the Flemish Municipal Fund is unfairly distributed among the municipalities. A resident of Ghent receives twice as much Flemish support as a resident of Bruges, an resident of Antwerp receives more than four times as much as a resident of Vilvoorde. Overijse even receives only a tenth of Ghent per inhabitant.

There is a chance that a reform of the Municipal Fund will be the subject of negotiations for the next Flemish government. To objectify the debate, Minister of Internal Affairs Gwendolyn Rutten (Open VLD) had a study carried out into the effects of a possible reform by the Administrative Innovation Support Center (UGent and KU Leuven).

The Municipal Fund is a crucial financing stream from the Flemish Region to the municipalities: approximately one fifth of a municipality’s income comes from it. In 2023 this amounted to 3.1 billion euros. Big cities have different needs than small villages. It was therefore determined that 41 percent of the fund is reserved for the 45 larger cities and coastal municipalities, which received an extra boost due to the costs of tourism. Thanks to this system of advances, Antwerp and Ghent together receive almost a third of the total fund.

Basic financing

The researchers looked at the effects of 27 simulations. For example, the system with advance payments can be replaced by basic financing. A distinction can then be made based on the functions that a municipality must fulfill (the degree of equipment). In almost all scenarios, the major cities face a decline in the allocation per inhabitant. Regional cities are also often hit hard. For the majority of the simulations, rural municipalities and the “regional urban city edge” (such as Vilvoorde) are improving.

If the entire reform has to remain budget neutral, Antwerp, Ghent and co will have to make concessions in favor of the little ones.

“More respect”

CD&V MP Brecht Warnez, who has been advocating for a better distribution of resources in the Flemish Parliament for years, sees the study as confirmation of the need for adjusted financing. “What we have been saying for years is now confirmed. Flanders must give the central cities, smaller towns and municipalities more money. Rural Flanders deserves more respect,” says Warnez.

Warnez himself puts forward a preferred scenario. He advocates cutting project financing. This project financing amounts to almost 1 billion euros, but according to the MP it “causes a lot of administrative nuisance for local authorities”. Warnez wants to invest the released small billion in the Municipal Fund. “In this way we can keep the money for Antwerp and Ghent the same and also give the smaller cities and municipalities what they are entitled to,” says the MP.