The Department of Local Government

Local government finances

The Department is responsible for distributing revenues between municipal and county authorities by developing and operating the revenue system at local government level. Its responsibility includes working on the overall budgetary framework for the local government sector in accordance with the national budget.

The Department is also responsible for developing the legal framework, guidelines and monitoring system with regard to financial management by the municipal and county authorities.

Coordination of government measures relating to the municipal and county authorities

The Department evaluates the tasks assigned to the local government sector in relation to its financial resources. The Department assesses whether central government measures affecting the counties and municipalities (legislation, earmarked grants, redistribution of responsibilities between administrative levels, etc.) are in accordance with the general guidelines for the division of responsibility between the various administrative levels and with the principles for central government management of this sector.

Renewal in the local government sector

The government would like to see a strong public sector that provides the general public with adequate services, freedom of choice and participation. The public sector must ensure quality, accessibility, legal safeguards and economic efficiency. The Department of Local Government coordinates the government’s work on local government renewal, which involves providing good framework conditions and greater room for manoeuvre for local authorities, and supporting them in their efforts to provide services to citizens and strengthen local democracy.

Municipal and county legislation and boundaries, and administration of elections

The Department is responsible for developing local government legislation and interpreting the Local Government Act, the Local Government Boundaries Act, the Intermunicipal Companies Act, and the Act of Pilot Schemes in Municipalities and Counties. The Department also deals with matters concerning the relationship between local government legislation and legislation for specific purposes, and with other legislation that is also applicable to counties and municipalities, such as the Public Administration Act and the Freedom of Information Act. Other important tasks include determining municipal and county boundaries. The Department is also responsible for the overall organisation of national and local government elections.

Consultations between central government and the local government sector

The Department is responsible for coordinating the Ministry’s participation in consultations between central and local government. The purpose of the consultation system is to discuss the relationship between revenues and tasks in the local government sector. The consultations consist of plenary meetings and bilateral meetings between the ministries and the Norwegian Association of Local and Regional Authorities. In recent years the system has been further developed and made more binding, and cooperation has been facilitated between the government and the Association of Local and Regional Authorities on bilateral cooperation agreements and costing of local government reforms.

Local Government Data Registration and Information Scheme (KOSTRA)

The Department is responsible for KOSTRA, a national data registration and information system that provides information on the use of resources by the municipal and county authorities. The system is based on annual reports to Statistics Norway by these authorities containing data on finances and service production. Statistics Norway compiles this material together with other data such as population figures, and generates key figures for prioritisation, degree of coverage and productivity in connection with services. The figures are published on the Internet in a format that makes it possible to compare resource use by similar municipalities. The comparisons assist local authorities in identifying areas where resources can be used more effectively.

The Statistical Reports Committee

The Statistical Reports Committee for municipal and county finances is a permanent committee whose task is to compile statistics on economic development, and undertake analyses of specific areas, in the local government sector in annual reports. The reports form an important basis for the consultations between central and local government. The Committee consists of representatives of the Ministries of Local Government and Modernisation, Finance, and Education and Research, the local government sector and Statistics Norway together with one independent member, who chairs the Committee. The Local Government Department serves as the secretariat.

Kommunalbanken Norway

Kommunalbanken is a private limited company in which the state owns 80 per cent and the National Local Government Pension Fund owns 20 per cent. The objective of Kommunalbanken is to provide loans to municipal and county authorities, intermunicipal companies and other companies that perform local government services against a guarantee from local authorities or the state or other secure guarantor. The Bank participates in the credit market on equal terms with other financial enterprises . An important part of the Bank’s mandate is  to promote competition in the market for municipal and county loans so that local government authorities can borrow on the most favourable terms.