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Revisions in statistics on local government finances change data for general government

The figures for general government for the statistical reference year 2015 changed more than usual in the January 2017 release. The change is caused by a revision in the main data source for the local government sector, the statistics on local government finances. The revision improves the quality of data but causes a break in the time series between 2014 and 2015. Data between these years are not necessarily comparable. The change affects the total data of local government (sector S1313) and general government (S13).

Due to the revision, internal service purchases in the local government sector become consolidated. This reduces the sector’s service purchases or intermediate consumption and sales proceeds from services or market output in equal measure. This decreases the total expenditure and income of general government correspondingly. The effect is around EUR 1.2 billion or around 0.6 per cent relative to gross domestic product.

The revision does not affect net borrowing or the deficit at all. The revision affects consumption expenditure so little that it is still comparable between years.

The division of the local government to industries and functions changed because the function classification of municipalities was renewed. The biggest changes apply to health care services. Internal purchases in health care services are consolidated and part of the functions have been classified to other industries. The market output of health care services decreases by close on EUR 1.8 billion and intermediate consumption by almost EUR 1.5 billion.

Municipalities’ and joint municipal authorities’ activities previously classified in industry 82 “office administrative, office support and other business support activities†have been classified in 841_842 “public administration†since 2015.

The industry and function structure of compensation of employees, intermediate consumption, market output and consumption changes somewhat. As a whole, the revision increases the non-market output of social welfare activities and decreases that of public administration.

The changes in the function distribution of expenditure are considerable for some functions. The expenditure of health care services and general public services changes the most. The division of social work activities’ expenditure also changes between the expenditure of services related to sickness and disability and to old-age.

In addition, the revised data content of the statistics on local government finances includes more detailed data on received land rents, insurance compensations and investments.

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Last updated 31.1.2017