The leader of Oslo City Council, Eirik Lae Solberg, of the Conservative Party (H), has warned that the municipality is in a precarious financial situation, which will be reflected in the city’s future budgets.
“Oslo municipality is in a very serious financial situation,” he told public broadcaster NRK.
“We are facing an economic turnaround that we have not seen since the 90s,” he added.
Solberg and finance councillor Hallstein Bjercke of the Liberal Party (V) said several billion will need to be cut from the city council’s budget over the coming years.
More information on the extent of the cuts and where they will be made will be announced when the city council unveils its city budget on September 25th.
The city council in Oslo is led by a right-wing coalition following last year’s local elections.
The city council’s finance committee has said that three factors are behind the council’s poor finances. It pointed to tough economic times, the government redistributing money from wealthy municipalities to poorer ones, and the previous left-wing city council overspending.
Marthe Scharning Lund, leader of the Labour Party in Oslo Municipality, has denied overspending and blamed the shortfall on overambitious election promises from the right-wing coalition.
“The storm the Conservative city council is warning of has been set in motion by themselves by making far too many expensive and unrealistic promises in the election campaign,” she said.
Despite warnings of tight finances, the Conservative Party pledged to remove property tax in Oslo, with a 25 percent cut already arriving earlier this year.
Solberg didn’t confirm whether the city council would be able to completely scrap property tax in the coming years.
“We will return to that when we present the budgets. But what we do in various areas will have to be adapted to the economic situation,” he said.
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