This is the Government’s proposal for regional funding that takes into account the adjusted population.

The Minister of Finance and Public Function, María Jesús Montero, has sent this Friday to all the Autonomous Communities of common regime and the Autonomous Cities of Ceuta and Melilla a document to start the debate on the reform of regional funding. The Government has moved a proposal for calculating adjusted population, one of the essential variables of the funding model and that determines the distribution of resources based on demographic, social or territorial circumstances.

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The Ministry of Finance has also empirically analyzed the distribution of regional spending to establish new distribution percentages by function. Specifically, they have analyzed basic indicators of spending needs of the Autonomous Communities in health, education and social services, as well as spending on other regional services.

On the other hand, to complement this information, corrective variables of a geographical and demographic nature have also been taken into account, such as surface area, dispersion or insularity, which are already included in the current model. In addition, corrective elements for depopulation have been included and fixed costs linked to expenditure, which have an impact on less populated communities, are also taken into account.

With this document the Government aims to “open a fair and rigorous debate, which overcomes the dialectic of winners and losers communities, and betting on a rational model, in which the interests of all communities converge”.

Summary of the proposal:


In the case of health expenditure, the current indicator in the adjusted population is the equivalent protected population variable, which is divided into 7 age brackets and where coefficients are applied that reflect the costs of health care according to the age of the beneficiaries. In the proposal put forward to the Autonomous Communities, the groups are divided into five-year age brackets, which means going from 7 to 20 groups. In this way, the real cost of health care by age group can be much more precise. In short, the equivalent protected population takes into account the fact that, in terms of health expenditure, the age of citizens is relevant.

The greater stratification has been made possible by the fact that indicators of use and expenditure are now available with a greater breakdown by age bracket. The proposal also provides for an update of the applicable coefficients by improving the data and sources of information.

For example, it takes into account the distribution of care expenditure related to hospital and specialized services; primary health services; pharmacy; and consumption of prostheses, transfers and therapeutic devices. With all these elements, the weight of health spending in the adjusted population would increase with respect to the current system and would go from having a weighting of 38% to between 40% and 45%.


The current model of the regional financing system evaluates the needs in education taking as a variable the population from 0 to 16 years of age. Therefore, other academic stages such as university or vocational training were excluded, but in the proposal submitted by the Treasury are incorporated. In fact, in the document several options of how they could compute these variables to know the preferences of the communities are raised.

  • Assess the needs of the non-university population. That is, the population from 0 to 17 years of age according to the census and the entry of higher vocational training students from other Autonomous Communities, in order to take into account the transfer that occurs significantly towards certain territories.
  • Assess the needs of the university population. That is to say, population of the 18 to 24 years old population register and the arrival of university students from other communities.
  • </ul> However,

    the document proposes a second option that would include the non-university population from 0 to 17 years of age and the university population from 18 to 24 years of age. That is, without including students from other Autonomous Communities.

    A third possibility also included in the report is a non-university population from 1 to 17 years of age and higher Vocational Training students, and a university population based on enrolled students.

    The weighting of this education expenditure variable would also be increased from the current 20.5% to a range of 25% – 30%, with non-university education accounting for 75-80% and university education for the remainder.

    Social Services

    In the current model, the system of regional funding evaluates the needs for spending on social services based on the variable population aged 65 and over


    However, taking into account that these resources are focused on the oldest age groups, the proposal submitted includes the need to divide this group into two. In other words, one group would be people between 65 and 79 years of age and the other group would be people over 80 years of age. The greater breakdown allows a better adaptation to the reality of this expenditure, according to the Treasury.

    There is also a high consensus that the social services assumed by the Autonomous Regions reach a population that exceeds the elderly. For this reason, as a novelty, the unemployed without unemployment benefits are included in this variable.

    The weighting of expenditure on social services in the current model is 8.5% and would now be between 6% and 10%. Within this variable, the population over 65 years of age would weigh between 80% or 90% and the unemployed between 10% or 20%.

    Rest of services

    Regarding the expenditure on the rest of the services carried out by the Autonomous Communities, after analysing different alternatives, the proposal is to maintain the current structure with respect to this variable. This means that it will be measured taking into account the total registered population. In this

    In this case, the weighting of this indicator would be reduced from the current 30% to between 18% and 22%.

    The corrective elements are as follows:

    Non-population corrective variables.

    The adjusted population is also made up of corrective variables that aim to guarantee an adequate provision of services in those communities whose geographical characteristics have a particular impact on their spending needs. In this sense, the document presented takes into account a key challenge for many regions, namely the demographic challenge.

    In fact, the set of these non-population factors will go from a weighting of 3% in the current system to a range of 3%-4%. The following elements form part of these corrective variables of a geographical nature.

    Surface area

    Surface area is a variable that has formed part of the regional funding system since the first model that integrated the Autonomous Regions into homogeneous funding models.

    There are certain regional competences in which the surface area factor is a determining factor in the direct identification of the needs of the regions. Moreover, it is a characteristic that can modulate the spending needs of the territories in relation to those competences not directly linked to surface area. In other words, the larger the surface area, in order to provide health, education or social services, either the number of centres must be increased in order to reduce the number of trips made by users, or these trips must be paid for.

    Likewise, surface area can be representative of phenomena such as depopulation and dispersion. The way in which the variable is weighted is in square kilometres.


    Depopulation is another factor taken into account in the proposal and is linked to the demographic challenge that the Government wants to face. However, the report describes the need to analyse whether, in addition to variables such as surface area, which take into account the density of all the ACs, it is necessary to identify a specific variable, of a more concentrated nature, that specifically measures the problem faced by ACs with more depopulated areas.

    The document submitted by the Ministry of Finance contemplates various formulas for approaching this calculation of this variable. One of them is to take into account the population necessary for each province to reach the average density – without including towns with more than 75,000 inhabitants – which allows reinforcing the result of the most depopulated communities.


    On this point, the proposal submitted contemplates two possibilities. On the one hand, taking into account the singular entity of inhabited population. That is, any inhabitable area of the municipality. An inhabitable area is considered when there are inhabited dwellings or in conditions to be inhabited.

    An area is considered clearly differentiated when the buildings and dwellings belonging to it can be perfectly identified on the ground and all of them are known by a name.

    Another option is to consider the inhabited population nuclei, which are a set of at least ten buildings, which are forming streets, squares and other urban roads. Included in the nucleus are those buildings which, being isolated, are less than 200 metres from the outer limits of the aforementioned group.


    The insularity variable is also included in the document. It is weighted according to the number of kilometres from the islands to the mainland.

    Fixed costs

    Finally, another of the novelties of the report has to do with the incorporation into the adjusted population of the corrective variable linked to fixed costs or economies of scale. This factor could affect the seven autonomous communities with the smallest population and which, therefore, have greater difficulty in achieving economies of scale and fixed costs have a greater impact on them.

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