Higher housing benefits, cuts in overheads still major challenges

In a letter to the House of Representatives of 16 October 2014, the Court of Audit comments on a number of aspects in the 2015 budget of the Minister for Housing and the Central Government Sector. The letter is one in a series that the Court will send to the House between now and mid-November commenting on the ministries’ budgets.

The letter considers, among other things, central government’s increased expenditure on housing benefits. When the benefit had been provided in the form of individual rent subsidies, the annual cost to the government had been relatively stable. Since housing benefit was introduced in 2006, the cost has increased from approximately €2 billion to €3 billion this year and is projected to reach €4 billion by 2019. More people are applying for housing benefit and the payments are increasing as incomes fall and rents rise.

The letter also considers developments in operational management and overhead costs in central government The present government wishes to save €1.1 billion on overhead costs (including personnel and material costs of the civil service) in addition to the spending cuts of more than €3 billion introduced by previous governments. Despite the sharply lower expenditure in 2011, overhead costs on balance declined by just €0.2 billion (excluding expenditure on the armed forces and judiciary) between 2009 and 2013. The Court of Audit describes the achievement of the targeted savings of €4.1 billion as a ‘major challenge’.

The letter is only in Dutch available.