Mayor Jukka Mäkelä’s budget proposal for 2021: Espoo will secure services for residents, in spite of major challenges posed by the coronavirus

The city’s operating expenses have increased considerably more than tax funding, and the level of investments is high. Espoo’s population will continue to grow by about 4,500 new residents per year. Over the next ten years, Espoo’s population structure will change and the dependency ratio will rise. It is expected that population growth will not result in increasing tax revenue as before.
According to the budget proposal for 2021, it is expected that tax funding, i.e. revenues from taxes and central government transfers to local government, will be lower than in 2020 as the state’s coronavirus compensation will decrease. The growth of operating expenses will significantly exceed the amount of tax funding, and the result is estimated to be EUR −43 million in 2021. It is predicted that the result will not be positive until 2023.
Responding to the population growth will still require significant investments. The City of Espoo’s investment programme will have a total budget of EUR 2.5 billion for 2021–2030. In addition to schools and day care centres, the programme includes traffic route and public transport projects required for the growth of the city and for the development of the urban structure, such as the Jokeri Light Rail, the City Rail Link and the metro development corridor.
Cash flow financing will cover 40 per cent of the investments at the beginning of the financial plan period and 70 per cent at the end of the period. The city’s loan portfolio will increase by EUR 0.5 billion during the financial plan years 2021–2023.
The result of the Corporate Group of Espoo is expected to be clearly in deficit in 2021 and 2022 and remain negative until 2029. The group’s investments will total EUR 4.7 billion and the group’s loan portfolio will increase to EUR 5.4 billion by 2024, after which it will start decreasing.
“In the future, the state should take better account of the investment needs of growing cities and the costs of a multilingual service structure in the central government transfer system or other financing systems. Espoo’s taxpayers significantly support the economy of other Finnish municipalities through both state and local income taxation, while the growing City of Espoo gets further into debt. This cannot continue,” Mäkelä says.
In addition, the possible health and social services reform would significantly weaken the economy of Espoo and the entire Western Uusimaa area. “To put it simply, the reform would take our revenue but leave our debt,” Mäkelä says. The reform solution has not been taken into account in the budget proposal calculations.
To correct the economic imbalance and to control indebtedness, the City Council decided on the Economically Sustainable Espoo productivity and adjustment programme. The objective of the programme is to balance the operational economy by EUR 147 million by the end of 2025. In addition, the level of investments will be reduced by 10 per cent, with annual investments totalling EUR 250 million, on average.
“The same process of economic adjustment and improving productivity is underway in all major cities,” Mäkelä says.
The City of Espoo aims to be carbon-neutral by 2030 and is one of the forerunners in implementing the UN’s Sustainable Development Goals (SDGs). According to the City of Espoo’s Sustainable Energy and Climate Action Plan (SECAP), it is possible to achieve carbon neutrality if both the city and its partners actively work towards the goal. Espoo’s climate work is managed through the city’s economic and operational planning, in line with the SECAP. The measures planned and implemented by the city to reduce emissions can be found in the budget, the units’ plans and scorecards.
Further information
Mayor Jukka Mäkelä, tel 046 877 3953
Financial Planning Director Pia Ojavuo, tel 043 826 9139
Keywords
Images

Links
About Espoon kaupunki - Esbo stad

PL 1 / PB 1
02070 ESPOON KAUPUNKI / ESBO STAD
+358 9 816 21http://www.espoo.fi
Subscribe to releases from Espoon kaupunki - Esbo stad
Subscribe to all the latest releases from Espoon kaupunki - Esbo stad by registering your e-mail address below. You can unsubscribe at any time.
Latest releases from Espoon kaupunki - Esbo stad
Tee oma taidereitti: EMMA – Espoon modernin taiteen museon julkiset taideteokset löytyvät nyt Espoon kaupungin karttapalvelusta18.6.2025 08:30:00 EEST | Tiedote
EMMAn taide ulottuu ympäri Espoon kaupunkia. Yhteensä 70 julkista taideteosta on kaikkien kaupunkilaisten saavutettavissa eri puolilla Espoota ja määrä tulee täydentymään. Kesäkuun alussa teokset on lisätty Espoon kaupungin avoimeen karttapalveluun yhteistyössä Espoon kaupunkitekniikan keskuksen kanssa. Taide kaupungilla -karttapalvelun tavoitteena on parantaa tiedon jakamista ja teosten löydettävyyttä.
Kaupunginhallitus: Espoontorin asemakaavan muutos mahdollistaa asemanseudun kehittämisen16.6.2025 19:55:34 EEST | Tiedote
Asemakaavan tavoitteena on mahdollistaa Espoontorin kauppakeskuksen laajentaminen hypermarketilla, lisätä asuntorakentamista sekä kehittää asemanseutua joukkoliikenteen solmukohtana.
Konserni- ja tilajaosto kokoontui ensimmäistä kertaa16.6.2025 14:06:20 EEST | Tiedote
Konserni- ja tilajaosto tukee kaupunginhallitusta kaupungin tytäryhteisöjen johtamisessa sekä muiden yhteisöjen ohjauksessa ja seurannassa.
Stadsträdgårdens trädbank hjälper Esbo att anpassa sig till klimatförändringen12.6.2025 11:19:59 EEST | Pressmeddelande
Den globala uppvärmningen kommer inom en snar framtid att leda till liknande väderförhållanden i Esbo som i Centraleuropa. Därför bereder sig staden på och anpassar sig till klimatförändringen genom ett nytt försök, där trädslag importeras från sydliga länder och odlas som framtida gatuträd.
Kaupunginpuutarhan puupankki auttaa Espoota sopeutumaan ilmastonmuutokseen12.6.2025 11:19:59 EEST | Tiedote
Ilmaston lämpeneminen tuo lähitulevaisuudessa Espooseen Keski-Euroopan olosuhteet. Siksi kaupunki varautuu ja sopeutuu ilmastonmuutokseen uudella kokeilulla, jossa etelästä tuotuja puulajeja kasvatetaan tulevaisuuden katupuiksi.
In our pressroom you can read all our latest releases, find our press contacts, images, documents and other relevant information about us.
Visit our pressroom