Madrid gets tough with feet-dragging town halls

The central government has made good its threat to freeze transfers to municipal governments that have failed to file their budget-execution reports for last year with the Economy Ministry.

Madrid gave city halls until the end of September to send their accounts for the 2010 budget year, but 1,022, or 12 percent of the total, omitted to do so. As a result, the central administration is withholding 13.5 million euros due to them. Cash-strapped local governments are already reeling under the impact of budget cuts forced upon them under an austerity drive to meet the country's deficit-reduction targets.

The central government set an original deadline of the end of March but extended this until the end of July, threatening to start freezing fund transfers this month. The central government advances municipalities a share of the state coffers. They must then account for what they have done with the funding.

Most of those failing to present their books are small and do not include any of the provincial capitals. Those failing to comply include Cercedilla and Navacerrada in the Madrid region, Almuñécar in the province of Granada, Campofrio in the province of Huelva and Benavente in Zamora province.

The obligation on the part of municipal government to file their budget returns in a timely fashion or face having funds withheld was enshrined in the Sustainable Economy Law. Last year, when the law was not in force, only 48 percent of the country's town halls made their budget returns within the stipulated deadline.