The President of the Independent Authority for Fiscal Responsibility (AIReF), Cristina Herrero, took part today in the 4th Congress on Local Internal Control, held in Cordoba, at a round table entitled “Commitment to excellence, guarantee of confidence” together with the President of the Andalusian Chamber of Accounts, Manuel Alejandro Cardenete, and the General Comptroller of Boadilla del Monte, María José Fernández Domínguez. The Comptroller General of the State Administration, Pablo Arellano, acted as moderator.
During her speech, Cristina Herrero presented an overview of the situation of local governments (LGs), highlighting that their financial position remains the most solid within the General Government Sector. AIReF estimates that the LG sub-sector will close 2025 with a surplus of between 0.2% and 0.3% of GDP, following the 0.4% achieved in 2024. Additionally, debt will be reduced to 1.2% of GDP, strengthening solvency.
However, the President emphasised the heterogeneity among Local Governments and highlighted cases of sustainability risks or non-compliance with the expenditure rule. In this regard, she recalled that AIReF has recommended applying the preventive measures provided for in the Organic Law on Budgetary Stability and Financial Sustainability (LOEPSF) and monitoring budgetary execution of LGs with greater spending pressures.
With regard to AIReF’s monitoring of local finances, Cristina Herrero explained that the analysis has evolved over the years. At present, AIReF carries out an individualised and granular analysis. On the one hand, large LGs with bigger budgets are monitored throughout the budget cycle in a similar way to the Autonomous Regions (ARs). On the other hand, AIReF has developed a tool – the Local Government Monitor – which allows all LGs, regardless of their size, to be classified according to their sustainability risk through a visual system of indicators. This Monitor, in operation since 2018, is updated annually and is a key tool for fiscal supervision and transparency.
Lastly, Cristina Herrero addressed the effects of the new European fiscal framework at the local level, highlighting that its implementation is an opportunity to reform the national framework and align Spanish rules with European ones. In her opinion, the LG sub-sector is well prepared to face this change in approach, given its traditional compliance with the expenditure rule and its culture of budgetary discipline.
However, she considered that the new rules should involve greater ownership and differentiation by sub-sector, the principles inspiring the European reform. Specifically, she pointed out that large LGs could prepare their own Medium-Term Fiscal-Structural Plans (MTP), like the Central Government, Social Security and the 17 ARs. Among medium and small LGs, those with a debt/current revenue ratio of more than 75%, should be especially considered. In addition, it will be necessary to better define the contribution of the sub-sector to national commitments according to their situation, align European and national expenditure rules, and strengthen the National Commission of Local Administrations.
