Budapest Municipality tightens belt

The cost-cutting measures concern management positions and company structures and will not affect municipal employees or the general public

Budapest Mayor Gergely Karácsony announced on Friday a series of spending cuts and restructuring moves aimed at easing the burden of the corona crisis on the municipal budget.

“We are not squeezing, we are saving. The transformations will not affect workers, that is, gardeners, street sweepers, heating installers, but management positions, directors and committee members,” wrote the Mayor on his Facebook page.

The cost-cutting measures include:

• Abolition of the 200 million forint (EUR 555 000) mayoral budget. Half of that budget was saved this year but will be done away with completely in 2021.
• After the resignation of David Dorosz, deputy mayor for climate protection and development, the vacant post will not be filled and the Mayor will have four deputies.
• The number of municipal council committees will be reduced from eight to five.
• The budgets of the city leadership and the city assembly factions will be cut by one-third.
• Two institutions of the capital - the Municipality Hall and Market Directorateand the Municipality of Budapest - will be abolished, and their tasks will be taken over by other institutions. This reorganization will not affect workers, market vendors or consumers, promised Karácsony.
• Most importantly, five municipal companies will merge, following the Stadtwerke model adopted by Vienna and major German cities. Thus, municipal parks manager Főkert, the Budapest Funeral Institute, metropolitan chimney sweeping company Főkétüsz, Budapest’s public works company FKF, district heating company Főtáv and Budapest Városüzemeltetési (City Administration) Holding Company (BVH) will become one joint utility company. The transformation has been drafted and spearheaded by Katalin Walter who will become CEO of the Budapest transport authority BKK, described by the Mayor as the city’s largest and most difficult to manage company, from 1 January 2021.  

The restructuring will not affect professional staff but will streamline the administration’s performance. It will mean a reduction of 21 supervisory board seats, fewer management positions, fewer service cars, more rational and efficient operation, stressed Karácsony.

Thrift over austerity

Speaking to the media, the opposition Mayor complained that the Hungarian capital, like the rest of the country, has to grapple with both the epidemic surge and economic slowdown exacerbated by “the increased (financial) burdens that the government is putting on Budapest”.

Summing it up, Karácsony said: “We’ll defend our city without passing austerity measures because austerity just leads to more austerity which deepens the crisis.”