FLIGHT TO THE CITIES (3)

Danish Governments may not know how to stop the drift from the countryside to the cities, but they have an impressive system for ameliorating its worst effects. Basically, it involves taking money from rich local authorities and redistributing it to poor ones, in order that every local authority can deliver roughly the same level of service, irrespective of its structural financial position.

That sounds relatively straightforward. However, this being Denmark, the one system is in fact three. The biggest, covering roughly kr.48 billion, does as I have explained above. However, there are also two "mini-systems"; the first shuffles an extra kr.2.6 billion around 34 local authorities in the greater Copenhagen area, and the second gives an extra kr.4.7 billion to particularly hard hit local authorities outside of that area.

With three overlapping, and sometimes contradictory, systems, it has become a bit of a bureaucratic nightmare. Furthermore, given that the Copenhagen area is already the main beneficiary of the population drift outlined yesterday, the extra money given to the capital is under attack from provincial cities who would like to get their hands on it. So some sort of reform of the system is likely during the next few years. But with 98 snouts in the trough, the devil will be in the details.

Walter Blotscher