Increasing financial buffer for provinces

13/12/2007 15:00

At the end of 2006 the net assets of provinces together totalled 3.8 billion euro. This is 522 million euro more than in the previous year. The increase was mainly the result of sales of shares and redemption payments by central government.

Net assets of provinces

Net assets of provinces

Sales of shares

Provinces with high net assets are usually in a position to spend more and to cope better with financial setbacks. At the end of  2006, Gelderland, North Holland and Utrecht had the highest amounts in net assets.
For Gelderland this was the result of the dividend payment of more than 145 million euro from energy supplier Nuon.
In addition Gelderland, just as Overijssel, booked a profit by selling off shares in water company Vitens.
The financial buffer of North Holland and Utrecht dates from around the turn of the century when they sold off share in energy company UNA.

Redemption payments from central government

Net assets rose by most in Groningen and Drenthe in 2006. Just as Overijssel and Zeeland, these provinces received cash redemptions from central government for road maintenance (including the N34 and the N46). This development continues the decentralisation of tasks from central government to the provinces.

Highest assets per capita in Utrecht

Overall, average net assets per capita for all provinces totalled 230 euro. The amount was highest in the province of Utrecht (496 euro on average), and lowest in South Holland (67 euro).

Net assets per capita, per province

Net assets per capita, per province

Increase in solvency

The provinces’ financial position is measured by their solvency ratio. This grew from 41 percent in 1999 to 53 percent in 2006. The net assets of provinces have therefore increased by more than their debts.

Per province solvency varies from 28 percent in South Holland to 77 percent in Utrecht. This means that Utrecht financed less of its property with loans than South Holland.

Solvency ratio per province

Solvency ratio per province

Elena van Kampen and Marty Rottman