Ministerial Committee on Economic Policy decides on implementation of previously agreed central government savings
In its meeting on 24 June, the Ministerial Committee on Economic Policy decided on the implementation and allocation of EUR 130 million in annual central government savings in addition to the savings of almost EUR 400 million already agreed on for various administrative branches.
The aim is to achieve savings by eliminating tasks and easing obligations, increasing the use of group-level services and speeding up the use of digitalisation and artificial intelligence in central government. The savings may also have an impact on central government personnel and the level of services.
“Given the challenging state of general government finances, savings will inevitably also be targeted at public administration. The total level of savings is more than EUR 500 million, so certain tasks and obligations will have to be eliminated in order to prevent the gap between resources and obligations from widening further. Ministries and agencies must be able to focus on attending to their core duties. With this in mind, the Ministerial Committee on Economic Policy will be closely monitoring the elimination of tasks and obligations,” says Minister of Finance Riikka Purra, who presented the matter.
Savings through digitalisation and more efficient group-level services
In addition to eliminating tasks and obligations, the savings package includes several measures, the most important of which involve the development of group-level services and more effective use of digitalisation. With regard to digitalisation, the focus will be on enabling public authorities to provide AI-based advisory services and introducing measures to promote the use of cloud services.
The role of central government group-level services will be strengthened and service production will be enhanced, for example by increasing the amount of joint procurement, continuing measures to improve the efficiency of the Government ICT Centre Valtori and Senate Properties, and centralising human resources management to the Government Shared Services Centre for Finance and HR (Palkeet).
Targeting of savings to administrative branches
Due to the challenges facing the security environment, the level of savings in the defence and security sector will be more moderate. A large proportion of central government employees work in these sectors, which inevitably means that other administrative branches will need to make more significant adjustments.
The savings targets for each administrative branch have been calculated in relation to the operating expenditures under the main titles for 2029 in the decision on the General Government Fiscal Plan for 2026–2029. The savings will be targeted at various administrative branches so that they will reduce total operating expenditures as follows:
- Administrative branches of the Ministry of Defence and the Ministry of the Interior: 1 per cent
- Administrative branch of the Ministry of Justice: 1.25 per cent
- Other administrative branches: 2.57 per cent
The allocation of savings may lead to an increase in the differences in resources between administrative branches and agencies. The ministries should pay special attention to this when dividing savings across agencies. Especially in the early stages of implementation, several agencies will temporarily be able to utilise their appropriations from previous years in their operational adjustments. The ministries have to come up with proposals for targeting the savings to agencies in the administrative branches by 13 August as part of the preparations for the 2026 budget proposal. The comprehensive security of our country is built through joint efforts by all administrative branches.
Impact of savings on personnel and level of services
The extent of the savings will be reflected in the activities of the central government in a variety of ways. With regard to personnel, the adjustment measures may lead to cooperation procedures, layoffs or redundancies. To some extent, the changes will also be visible in the level of services. However, the primary objective is to target the savings at structures and operating methods in order to minimise the impact on personnel.
Inquiries: Mikael Lith, Special Adviser to the Minister of Finance, tel. +358 295 530 334 and Susanna Huovinen, Permanent Under-Secretary, tel. +358 295 530 199, Ministry of Finance
The email addresses of the Finnish Government are in the format [email protected]