The Ministry of Territorial Cohesion and Relations with Local Authorities published, on April 2, 2021, the details of the amounts of the global operating allocation (DGF) for the year 2021(new window). The DGF is the main state grant to local authorities. Its amount, the method of deduction and distribution are set each year by the finance law .
The total amount of the DGF stable for the fourth consecutive year
As in 2019 and 2020, the overall amount of the DGF paid by the State is stable over one year and amounts to 27 billion euros. The entire envelope intended to partially finance the functioning of local authorities has increased slightly but constantly since 2017. Between 2020 and 2021, the overall amount of the DGF increased by 0.5%. Between 2017 and 2021, this increase reached 1.9%.
These data apply at national level and reflect an average. But at the local level, some local authorities have seen the amount of their allocation drop. The amount of the endowment received by a community is defined by different criteria and may vary from year to year. In particular, we take into account the population, the area of the community and finally the overall amount of taxes it collects.
Local disparities and vigilance in the context of the Covid-19 pandemic
Between 2017 and 2021, the amount of the overall operating allocation increased for some communities while it decreased for others. These disparities can be explained by variations in the population in the municipalities and public establishments for inter-municipal cooperation (EPCI) and by the Government’s desire to accentuate the mechanisms of redistribution and solidarity between the communities.
This results in a revaluation of part of the equalization allocations. In 2021, the envelope dedicated to the urban solidarity endowment and the rural solidarity endowment increases by 180 million euros. Likewise, the inter-municipal allocation increased by 30 million euros.
To support communities facing the coronavirus pandemic, the Government has undertaken to continue work to assess the impact of the crisis on local budgets. Likewise, the latest finance law guarantees the tax revenues of the most vulnerable local authorities for the year 2021.