The City of Helsinki is divided into the state-funded Social Services, Health Care and Rescue Services Division and Municipal Helsinki, which encompasses the City’s other functions. Helsinki has prepared separate financial statements for Municipal Helsinki; the Social Services, Health Care and Rescue Services Division; and the City of Helsinki as a whole.
According to the financial statements for 2023, Municipal Helsinki performed slightly better than budgeted. The result for the financial period was EUR 437 million, which is EUR 13 million better than the budget. In 2022, the result was EUR 347 million. Municipal and corporate taxes paid at the higher tax rates in effect in 2022 due to the healthcare, social welfare and rescue services reform increased tax revenue by EUR 222 million. Without them, the result for 2023 would have been slightly lower than in previous years. The 2022 tax rates will no longer affect tax revenue from 2024 onwards.
The total tax revenue in 2023 was EUR 2,038 million. Helsinki was paid EUR 1,192 million in municipal tax, which was EUR 52 million more than budgeted. The difference was due not only to the effect of the 2022 tax rates, but also the better-than-estimated development of incomes. As a result of the healthcare, social welfare and rescue services reform, municipal tax revenue decreased by 61% compared to 2022.
Population growth necessitates investments
The population of Helsinki grew significantly in 2023. At the end of 2023, Helsinki had a population of nearly 675,000 residents, indicating an increase of approximately 10,000 residents from the year before. The population growth also necessitates investments in service buildings, such as schools, and the urban structure, such as new streets.
Municipal Helsinki’s investments totalled EUR 849 million, with schools and other buildings accounting for EUR 289 million, major traffic projects accounting for EUR 140 million and streets and traffic routes accounting for EUR 92 million, for example. Helsinki also invests a great deal through its subsidiaries. With the inclusion of the public transport investments of Metropolitan Area Transport Ltd, the comparable level of investment in 2023 rises to approximately EUR 1,035 million.
Helsinki must finance both its service costs and investments with its tax and other revenue. In 2023, the City was able to finance its investments almost entirely with internal financing. The City's cash flow from operations and investments, which is a key indicator of the economic balance of the growing city, was nearly balanced at EUR 23 million. Municipal Helsinki’s loan portfolio did not increase in 2023, as borrowing needs were rolled over to 2024.
Social Services, Health Care and Rescue Services Division’s financial performance better than expected
The financial performance of the state-funded Social Services, Health Care and Rescue Services Division was better than expected. The Division's revenue was EUR 43 million higher than budgeted due to increased client fees, the Ministry of Finance’s start-up grants and the growth of services provided to Municipal Helsinki, among other factors.
The Social Services, Health Care and Rescue Services Division’s operating expenses exceeded the budget by EUR 32 million, and its operating margin was EUR -2,569 million. The Division received EUR 2,601 million in central government transfer to the wellbeing services counties. The Division’s annual contribution margin was EUR 40 million and its result for the financial period was EUR 29 million.
Salary development programme raised salaries by a total of EUR 14 million
The City's own salary development programme, which contributes to the City’s appeal as an employer, increased salaries by a total of EUR 14 million beyond the general level agreed in collective agreements in 2023.
The objective of the salary development programme is to improve the competitiveness of Helsinki’s salaries. Since 2019, the salary development programme has increased salaries by a total of approximately EUR 34 million beyond the general level. The personnel groups receiving the increases vary annually.
One of Helsinki’s strategic indicators is the recommendation index, which shows how many employees would recommend the City of Helsinki as an employer. In 2023, Helsinki’s recommendation index improved following the dip recorded in the previous year. Based on the Fiilari employee survey, 75% of respondents would recommend Helsinki as an employer.