Three-quarters of the Netherlands’ 342 local councils are facing financial difficulties, with many delaying decisions in the hope of additional government funding, according to research by accountants group BDO.

In total, councils with a deficit are €5.2 billion short of what they need for the coming years, BDO said. Although all councils combined have reserves totalling €41 billion, these funds are not always accessible to cover budget shortfalls.

Next year, the government plans to reduce its funding for local authorities, which will further worsen the situation, BDO warned.

Local elections are also set to take place early next year, and councils that cut spending now risk being penalised at the ballot box, said BDO’s Marc Steehouwer. “Councils need to take a close look at their own organisations and the decisions they are making.”

Some 60% of local authority funding comes from the state. Councils raise the rest themselves through taxes – often based on property values – and service fees.