Slimming down

France tells local governments to cut the fat

WHEN Claude Monet lived near the Seine at Argenteuil, he painted white canvas sails and river banks. Today, Argenteuil is part of the suburban sprawl west of Paris, and is more famous for being the most indebted large town in France. A recent report from the Cour des Comptes, the national audit body, told the town hall to take urgent measures to curb the deficit “in line with the gravity of the situation”.

Argenteuil is poorer than the average French town, and its unemployment rate is nearly 17%. The share of residents living in subsidised public housing, in the concrete towers that ring the town, is twice the national average. And like many French towns, Argenteuil's aspirations to first-class public services exceed its ability to finance them.

Overlooking the river, a vast new plate-glass building house the Argenteuil-Bezons Agglomeration, a new layer of local government created several years ago to run joint services with its neighbouring town. In the old town centre, near the freshly scrubbed medieval chapel, six gardeners in fluorescent-yellow jackets are planting out municipal flower beds. Up the road sits a smart glass-fronted cultural centre, complete with 500-seat theatre and two cinema screens. Outside, a line of toddlers, grasping each other's hands tight, totters along the pavement. Argenteuil has 20 crèches, catering to babies from the age of ten weeks. Older pre-school children are served a daily three-course lunch, graced by such dishes as poached fish and quinoa followed by a slice of Camembert.

Locals consider such things to be the basic job of local government. But Argenteuil's debt already amounts to some 300m. Last year alone, the public-sector wage bill jumped by 8.5%, to 79m, according to the Cour des Comptes, and the deficit reached 17m. “It was insane,” declares Georges Mothron, the Gaullist mayor, who defeated his Socialist predecessor in elections in March. In 2013, he says, the town hall hired 377 new staff. This included 40 new workers to staff 150 extra crèche places. The old team disputes the figures, and Philippe Doucet, the previous mayor, describes the spending as “investments in the future”.

Applying similar logic, many French towns have given themselves a facelift over the past decade. Dijon has built a blackcurrant-coloured tram, which wends its way on tracks laid over fresh grass, as well as a new Olympic swimming pool. In the north, Tourcoing and Roubaix and its neighbouring cities of Tourcoing and Roubaix have constructed a new 50,000-seat stadium, a competition-class velodrome, and the biggest aquatic centre north of Paris, due to open next year. New layers of inter-town local government have proliferated. Between 2000 and 2011, the French town-hall headcount increased by 26%.

The new budget squeeze, and the fact that most civil-service jobs are protected, will force towns to put such projects on hold. Franois Rebsamen, president of Greater Dijon as well as the French labour minister, has called it the “end of a cycle” for big investment projects in his town. In Argenteuil Mr Mothron says he has cancelled a renovation of the swimming pool. Central-government transfers to Argenteuil will be cut by 3.5m next year and by 8.5m in 2016.

Such decisions will not be popular, given France's stagnant economy and high unemployment. Some town halls may think it would be better to raise local taxes rather than cut popular services. And the party barons who run many towns will seize on the chance to attack the central government. Indeed, this week Martine Aubry, the Socialist mayor of Lille, denounced the economic policies of her fellow Socialist, Mr Hollande. France is relying heavily on the local-government effort to help secure budget savings. But, despite the pressure from central government, town halls may yet refuse to do their bit.