Most municipalities spend less than the standard on education

#LeParoleDiOpenCivitas is a communication campaign by SOSE and openpolis to explain the key concepts of fiscal federalism through the publication of podcasts and in-depth articles.

61% of the municipalities in the Regions with Ordinary Statutes (Italian acronym - RSOs) record a historical expenditure lower than the standard one for education, which can also be due to the lack of resources to guarantee an adequate level of educational services. 

The services related to minors' education and training are essential. The widespread availability of facilities such as schools, canteens, for example, is the fundamental prerequisite for allowing all children and teenagers to access them. 

Education: some municipal services are mandatory, others are not. 

One of municipalities' fundamental functions is education. First, they manage the construction of buildings for kindergartens, primary and lower secondary schools, pay utilities (water, electricity, heating) and are responsible for maintaining the gardens and other green areas of state schools. 

In addition, the municipality provides other non-mandatory services, such as municipal preschools for which the institution must pay all expenses, including teachers' and auxiliary staff's wages. Other non-mandatory services aim to support and facilitate the use by citizens of state educational services. These are on individual requests, such as school transport, meals, assistance, and transport for disabled students (especially in municipalities without public transport) and other complementary services, such as after-school activities and summer camps. 

Expenditure on education in the fiscal federalism system 

The Italian system of fiscal federalism estimates, through SOSE, the financial needs of all municipalities in the Regions with Ordinary Statutes to perform their educational function and determine the allocation of equalization resources from the municipal solidarity fund. 

The primary function of the standard expenditure needs is to guide the mechanism for redistributing the economic resources between municipalities. 

See Expenditure needs 

The standard expenditure needs are based on a measurable and comparable element, the standard expenditure. It refers to the resources that a municipality should spend to perform a specific function based on the territory's demographic, morphological and socio-economic characteristics. On the other hand, the resources the municipality has actually dedicated to those services is referred to as historical expenditure. 

€ 78,4 per capita is the historical expenditure on education incurred by municipalities of regions with ordinary statutes in 2017. 

The calculation of municipalities' standard expenditure on education is based on 15 variables that economically impact this function, the so-called "determinants of standard expenditure". The most relevant of them are the resident population aged 3-14 (32 euros per inhabitant on average), the number of school canteen users (€ 16) and municipal and state school complexes (€ 6 per inhabitant). 

How the level of expenditure on education varies according to the number of inhabitants ... 

As we have already seen, the resident population impact the municipality's expenditure on all functions. As for education, we consider the number of children who attend kindergarten, elementary, and middle schools of municipal competence. Therefore, we can say that as the number of residents varies, the municipal expenditure, both the actual (historical) and the estimated (standard) one, also changes. 

 

SOURCE: openpolis elaboration on SOSE database (last updated on 15 March 2021) 

The first relevant aspect is that the municipalities in the RSOs with more than 100 thousand inhabitants incur a higher per capita expenditure, both historical and standard, for education, € 120 and € 109 per capita, respectively. 

Small municipalities offer fewer services on average than cities. 

On the other hand, small municipalities with fewer than 500 residents show a lower expenditure, both historical (€ 54 per inhabitant) and standard (€ 60 per inhabitant). This difference is probably due to the higher number of residents aged 3-14 and canteen users in large municipalities. As already seen, these two variables affect the expenditure on education more than others. 

30.9% of 3-14 aged children are school canteen users in the municipalities with more than 100 thousand residents, against only 11.6%.in municipalities with less than 500 inhabitants.  

The gap is smaller but still significant if we consider the percentage of 3-14 aged residents. In larger municipalities, it is 10.6%, against 7.9% in the smaller ones. 

Historical expenditure exceeds the standard one only in most populated municipalities. 

Another perspective to observe these data is comparing standard expenditure and historical expenditure within each group of municipalities divided by number of inhabitants. Comparing the two indicators helps us understand how much local authorities spend on educational services (historical expenditure) compared to the expenditure estimated on the basis of their demographic and territorial characteristics (standard expenditure). 

The historical expenditure is lower than the standard one in almost all the groups of municipalities. The historical expenditure is lower than the standard one in almost all groups of municipalities. Only municipalities with 60 -99 thousand inhabitants and over 100 thousand show a historical expenditure higher than the standard one. This condition could depend on the administrations' choice to invest more resources than those estimated to provide more services to citizens. The data relating to the surface area of municipal and state school buildings confirm this hypothesis. In municipalities with over 60 thousand residents, it exceeds 13 square meters per 3-14 aged inhabitant; it drops to 4 square meters per capita in municipalities with less than 500 residents. 

……. and to the geographic area 

As seen above, most Italian municipalities in the regions with ordinary statutes (61% equal to 3,929) record a historical expenditure on education lower than the standard one. These institutions are either particularly efficient in offering citizens the services related to education, or choose to allocate more funds to other functions, or have not enough resources to guarantee an adequate level of service. 

We have already seen how the comparison between historical and standard expenditure varies according to the number of inhabitants. Another determining variable is the geographical area. 

SOURCE: openpolis elaboration on SOSE database (last updated on Monday 15 March 20221) 

Almost all southern municipalities spend less on educational services than the standard expenditure estimated on the basis of their morphological, demographic and socio-economic characteristics. 

Regarding the expenditure on education the gap between the south and the rest of the country is wide. 

As the map shows, the situation is different in the centre, where more than half of the institutions (52%) record a historical expenditure higher than the standard for the services related to education. The same is true for the municipalities in the northeast (51%) and, to a lesser extent, in the northwest (45%). This condition, which could suggest a waste of resources, may result from the administrations’ choice to offer more services to their citizens than the standard.  

Municipal data on the diffusion of educational services seem to confirm, at least in part, this second option. For example, school canteen users are on average 32.3% of 3-14 aged residents in the municipalities of the northwest, 25.5% in the northeast and 29.1% in the centre. The share falls to only 12.3% in southern municipalities, indicating a lack of this service. The same trend is evident, albeit less marked, in the per capita surface area of municipal and state school complexes: 15.8 square meters in the municipalities of the northeast, 14.6 in those of the northwest, 12.5 in the centre and 10.1 in the south. 

 

SOURCE: openpolis elaboration on SOSE database (last updated on Monday 15 March 2021) 

Description 

To know your municipality's historical and standard expenditure, click on the Search ... and write the name of your municipality. You can change the order of the table by clicking on the column header 

So far, we have analysed separately the variations of the expenditure and the service level regarding education, from school canteens to the availability of school complexes. On the OpenCivitas platform, Sose compares these two elements for each municipality of the Regions with ordinary statutes to understand whether a low or high level of expenditure corresponds to a low or high level of services. 

Performance analysis 

This procedure assesses each municipality's level of expenditure and services for education on a 1:10 scale. The first indicator shows how much the historical expenditure is higher or lower than the standard one; the second measures the offer of services related to this function, compared to the average of municipalities with the same number of inhabitants. 

 

SOURCE: openpolis elaboration on SOSE database (last updated on Monday 15 March 2021) 

THINK TO KNOW 

  • The position of municipalities in the four quadrants depends on their level of expenditure and the number of services provided on a 1:10 scale 
  • The municipalities in the lower right quadrant incur a historical expenditure higher than the standard one and provide fewer services than the average of municipalities with the same number of inhabitants. 
  • The municipalities in the upper-right quadrant record a historical expenditure lower than the standard one and a higher service level than the average of municipalities with the number of inhabitants 
  • The municipalities in the lower-left quadrant incur a historical expenditure lower than the standard one and provide fewer services than the average of municipalities with the same number of inhabitants.  
  • The municipalities in the upper-right quadrant show a higher historical expenditure than the standard one and a higher service level than the average of municipalities with the same number of inhabitants. 

 

Compared to municipalities with the same number of inhabitants, Bari and Naples record a level of services related to education well below the average, with a score of 2 out of 10, probably because both municipalities show a historical expenditure (4 out of 10 and 5 out of 10, respectively) lower than the standard one estimated on the basis of their characteristics. 

Milan shows the best performance in education. 

All other big municipalities have a level of services and expenditure above the average. Within this function, they offer more services than the average of municipalities with the same number of inhabitants and have a historical expenditure higher than the standard one. In particular, Milan is the city that offers more services compared to the expenditure. Its scores are 9 for the service level, like Bologna, Verona and Florence, and 7 for expenditure, compared to 10 in Bologna, 9 in Verona and 8 in Florence. In other words, it has a lower level of expenditure on education than the other municipalities guaranteeing an equally elevated level of services. 

Finally, it is interesting to note that Rome and Venice have identical scores in this context, both for expenditure (7) and the offer of services (8).