Funding of local Government
In Norway, kindergartens and schools are financed by municipalities and counties. It is therefore appropriate to give a description here of the funding of local government in Norway.
The main sources of revenue for municipalities and counties are local taxes, general grants, earmarked grants, charges and fees. The General Grant is a lump sum transfer to every unit of local government and is administered by the Ministry of Local Government and Modernisation. Local taxes accounted for 40 per cent of total revenue in 2016, followed by general grants at 34 per cent, fees and charges at 14 and earmarked grants at 5 per cent. Municipalities get the majority of their tax revenue from income tax, but also have income from wealth tax, property tax and tax on natural resources.
There are large differences between municipalities and between counties, in both the level of income and in the level of expenditure. It is a national aim to offer citizens a high level of public services in all parts of the country. This is done through a redistribution of income between municipalities and between counties, which is achieved through the General Grant Scheme. Both tax income and the General Grant are included in the General Grant Scheme.
Most of the General Grant is initially distributed as a per capita grant. To ensure that all municipalities have the means to provide sufficient services to their inhabitants it is necessary to redistribute the grant according to expenditure needs. Redistribution is achieved through the mechanism of expenditure equalization.
The purpose of the mechanism of expenditure equalization is to fully compensate involuntary costs (costs that are not influenced by the county or municipality) related to population characteristics (i.e. demographic aspects and social characteristics) and population and population density (this has a favourable effect for small and sparsely populated municipalities).
Tax income is paid by the inhabitants directly to the municipalities and counties. As the revenue from local taxes varies significantly between municipalities, redistribution is necessary to ensure an equivalent level of public services all over the country. Tax income for municipalities varies from 60 to 274 per cent of the country average (2015). Tax income is redistributed indirectly, and is used to calculate an addition of a subtraction from the General Grant.
In addition to the redistribution, part of the General Grant is distributed according to criteria related to regional and urban policy. Finally, a small share of the grant is distributed by the county governor depending on local needs.
Criteria for equalization of expenditure on kindergartens are:
- Number of inhabitants aged 2-5
- Number of children that receive cash for care benefits (se chapter 3.4)
- Share of parents with higher education
- Traveling distances within the municipality
Criteria for equalization of expenditure on primary and lower secondary schools are:
- Number of inhabitants aged 6-15
- Immigrants from outside of Scandinavia aged 6-15
- Traveling distances within the municipality
Criteria for equalization of expenditure on upper secondary schools are:
- Number of inhabitants aged 16-18
- Pupils in expensive education programs
- Traveling distances within the county
Funding of early childhood education and care
Kindergartens are financed by municipalities and fees from parents. About 85 percent of the funding comes from the municipalities. See text above on funding of municipalities and chapter 3.1.4 on fees.
Funding of primary education
Primary and lower secondary schools are financed by municipalities. See text above on funding of municipalities.
Funding of upper secondary education
Upper secondary schools are financed by the counties. See text above on funding of local government.
Training establishments receive a grant from the county to cover the cost of the for apprentices. Rates are set by the Ministry of Education and Research. An extra grant can be given for apprentices with special needs.
Financial autonomy and control
Counties and Municipalities have considerable autonomy in allocation of resources between sectors and in organising welfare services for their inhabitants, including kindergartens and schools. The work of municipalities and counties are regulated by the local government act and special legislation related to the different services and sectors. The autonomy of kindergartens and schools also depend on delegation of responsibilities from the county or municipality to kindergartens and schools.
The County Governor supervises the municipal and county authorities’ fulfilment of the duties bestowed upon them through relevant legislation.
Early childhood education and care
The municipality is the local authority for kindergartens and at the same time owner of public kindergartens. The municipality must offer a place in a kindergarten to children under school age living in the municipality. The municipality shall provide guidance and ensure that kindergartens are operated in accordance with current national regulations.
Important regulations limiting the financial autonomy of kindergartens are listed below. See the Kindergarten Act with regulations for a complete picture.
- Kindergartens shall have adequate pedagogical and administrative leadership. The Pedagogical leaders must be trained preschool teachers.
- Staffing at the kindergarten must be sufficient for the staff to be able to carry out satisfactory pedagogical activity. As a minimum, there shall be one pedagogical leader per 14-18 children above the age of 3 and one per 7-9 children below the age of three. This applies when the children are in the kindergarten more than 6 hours per day.
The Ministry of Education and Research has defined a guiding principle for the area that as a minimum, should be available for the children. 4 m2 per barn above three years and 5,3 m2 for children under 3 years. The outdoor area should be six times the indoor area.
Basic statutory salaries for pedagogical leaders are negotiated at central level, between trade unions and the organisation of Municipalities, KS and laid down in a collective agreement. Local authorities are free to increase minimum wages (in local agreements). Working hours for pedagogical leaders are also negotiated between the social partners and laid down in a separate agreement.
As owner of public the kindergartens, the Municipality decides the budget for each public kindergarten. The Municipality decides the transfers from the Municipalities to each kindergarten, while the fees paid by parents are strictly regulated, see chapter 3.1.3. Financing of private kindergartens is described in chapter 3.1.6.
Primary and secondary education
The Municipality is the local authority for Primary and Lower Secondary schools, while the County is responsible for Upper Secondary schools. At the same time, they are school owners.
The Municipality or County (for Upper secondary education) decides the budget for each school. Most Municipalities and Counties practice devolved financial management. The school receives an annual block grant, decided by the municipal/County council for wages and other operating expenses. Teachers are usually selected and employed by the school. Head teachers are employed by the Municipality/County. School building maintenance and operating costs are often organised and funded by a separate department in the Municipality/County.
The municipalities shall offer pupils in grade 1-4 a place in a Day Care Centre before and after school. Participation is financed by fees from parents and funding from the Municipalities.
Important regulations limiting the financial autonomy of schools are listed below. See the Education act with regulations for a complete picture.
- Maximum number of teaching hours per year and subject and is regulated, but municipalities/(or schools) have a certain flexibility in deviating from the national standards.
- There is no quantitative regulation of the teacher pupil ratio. Regulation of maximum class size was abolished in 2003.
- Teaching in schools shall be led by head teachers. (section 9-1)
- The pupils have the right to necessary counselling concerning education, careers and social matters. (9-2)
- The pupils shall have access to a school library. (9-2)
- The schools shall only use textbooks that are available in both Norwegian and new Norwegian.
- The Municipalities shall offer pupils help with homework, but participation is voluntary for pupils.
- Persons appointed to teaching posts in primary and lower secondary education and in upper secondary education shall have relevant professional and educational qualifications. (details are laid out in administrative regulations)
- Teaching staff must have relevant qualifications in the subjects that they teach. (specifications are described in administrative regulations)
- The Municipality has to provide transport to and from school for children who live more than 4 km away from the school.
Basic statutory salaries for teachers are negotiated at central level, between trade unions and the organisation of Municipalities, KS. Local authorities are free to increase minimum wages (in local agreements). In some municipalities, local agreements allow schools to give individual wage increases to teachers. School heads' salaries are negotiated individually or collectively at local level. An agreement on teachers' working hours is also negotiated between social partners at central level, but there is room for further negotiations at local level.
Fees within public education
Early childhood education and care
According to regulations under the Kindergarten Act, a maximum limit shall be fixed for the fee parents have to pay for a place in a kindergarten. This applies to both public and private kindergartens. The maximum fee is decided by the parliament in the annual budget. In addition, no family shall pay a fee amounting to more than 6 percent of their income for a place in a kindergarten.
The Municipality shall offer a discount for siblings, making sure that parents get a discount of minimum 30 percent for the second child and minimum 50 percent for the third child and onwards. The Municipality shall also offer a place free of charge for 20 hours per week to children aged 3 and more from low income families. The income limit is set by the Parliament in the annual budget. The Municipality may further reduce fees or give places free of charge to other groups.
In addition to the fee, kindergartens may charge a fee to cover the cost of food served in the kindergarten.
Primary and secondary education
Pupils have the right to free public primary and lower secondary education. The municipality may not require pupils or their parents to cover the costs in connection with primary and lower secondary education, for example costs associated with teaching materials, transport during school hours, stays at school camps, excursions or other outings that are part of primary and lower secondary education (Section 2-15 in the Education Act).
The Municipalities may charge a fee for a place in day care facilities for pupils in grade 1-4. The income from fees must not exceed the Municipalities' expenses in offering this service.
Public-sector upper secondary schools are also free.
Post-secondary non tertiary education
The public post-secondary colleges are free.
Financial support for learners’ families
There is no specific support for families related to education. Family related benefits are administered by the Norwegian Labour and Welfare Administration (NAV).
Parents are entitled to a child benefit for children under the age of 18, who are living in Norway. The purpose of child benefit is to help cover the costs of raising a child.
Parental benefit is intended to ensure parents an income in connection with the birth or adoption of a child. The parental benefit period is comprised of the maternal quota, paternal quota and the shared period. The total period for parental benefit, is 49 weeks at 100 percent coverage, and 59 weeks at 80 percent coverage, up to a maximum level which is regulated annually. The parental benefit basis is normally calculated on the basis of the parents' income at the start of the leave.
Parents can receive cash-for-care benefit for children between the ages of one and two years of age. If a child attends a government subsidised kindergarten, they will not receive cash-for-care benefits.
Financial support for families of pupils with special educational needs
There is no specific support for families related to education. Family related benefits are administered by the Norwegian Labour and Welfare Administration (NAV). Special equipment, learning and learning materials for children with special needs are financed by NAV, subsequent to application.
Financial support for learners
Pupils in upper secondary school may apply for financial support from the Norwegian State Educational Loan Fund (NSELF). All pupils with a statutory right to upper secondary education (see chapter 6.1) are entitled to an equipment grant, the amount varies between education programmes. Pupils who have to live away from their parents are, on certain conditions, entitled to a housing grant and a travel grant. Pupils from low income families are entitled to a basic grant. Pupils with children of their own may receive an additional grant as child support. Pupils that are 18 years or older and live away from their parents may also receive a loan.
Foreign nationals who have been granted asylum in Norway are entitled to receive a refugee grant if they are a taking ordinary upper secondary education in Norway. They may also be entitled to receive a refugee grant for primary and lower secondary education, provided that they do not qualify for admission to upper secondary education.
See chapter 2.4 on organisation of private education.
Early childhood education and care
Financing of private kindergartens is regulated in the Kindergarten Act (§14) and regulations under this act. The aim is to give private kindergartens the same general terms and conditions as public kindergartens. The Municipality is obliged to give an operating grant to private kindergartens that are approved and already established (before 2011). The municipality may decide if they want to support kindergartens established after 2011. The grant is based on a rate per child. The rate is calculated by the municipality based on average operating costs per child in the public kindergartens within the municipality.
The same regulations apply to fees in private kindergartens as in public kindergartens,
Primary and lower secondary education
Only 3.3 per cent of Norwegian pupils are enrolled in private schools.
Most private schools are approved under the Independent School Act and are grant-aided. Only a few independent schools are fully financed privately. These schools are approved according to §2.12 in the education act and are entirely financed by parents’ fees and other private or public funding. This includes the international schools and the French and German schools. The two last receive public funding according to bilateral agreement with French and German authorities.
Private schools under the Independent School Act are financed by grants from the National government and fees. The grants are calculated based on the number of students. The rate is set to 85 percent of the national average cost per student in similar public schools. Fees may accordingly not exceed 15 % of total costs. In addition to the ordinary grant, private schools may apply for grants to cover expenses related to students with special needs, buildings etc.
Owners of Private schools are not allowed to profit from the school business. Any budget surplus must be re-invested in the school.
When a pupil attends a private school, the expenditures of the municipality or county will be reduced. Therefore, the General Grant to counties and municipalities is adjusted every year, based on the number of pupils in private schools.
Upper secondary education
The same regulations apply to Upper secondary schools as for primary and lower secondary schools, but there are more independent private schools, financed with fees from students. These are mainly commercial schools, but also a few international schools (??).