The government and municipalities in Denmark have reached an agreement to increase the service framework by 3.2 billion kroner in 2026 while simultaneously reducing municipal administration costs by 250 million kroner. This agreement, negotiated between the government and the municipalities, was presented on Tuesday afternoon at the Ministry of Finance.

The chairman of the Association of Danish Municipalities, Martin Damm (V), stated that this agreement is an improvement over last year’s, which he described as the best in 15 years. He emphasized the need to invest in welfare to ensure its continued relevance after a period of austerity.

The service framework, which has been raised annually since 2018, sets a limit on the total amount that municipalities can spend on service expenses. These service expenses include funding for essential services such as schools, elderly care centers, and daycare institutions.

The agreed-upon service ceiling for the municipalities’ economy next year is 336.8 billion kroner. Both the government and the municipalities have concurred that funds should be allocated to investments in daycare institutions, primary schools, and cultural and leisure facilities.