Cities seek substantial monetary reparations for day care expenses
Municipalities in Germany are pressing the federal government to address the increasing costs of expanding or maintaining full-day childcare services. The German Association of Towns and Districts (Deutscher Städtetag and Deutscher Landkreistag) argues that the funding provided so far is insufficient to cover the rising expenses, and they oppose bearing these costs alone.
The dispute centres around avoiding additional cost burdens for municipalities. Proposed solutions to alleviate these burdens include securing a long-term federal funding commitment, establishing funding formulas based on actual costs, implementing clear legal frameworks and financial guarantees, and promoting collaboration between federal, state, and municipal governments.
One such proposal comes from the managing director of the German Association of Towns and Districts, Hans-Günter Henneke. Henneke suggests that the federal government could permanently allocate Value Added Tax (VAT) points to municipalities to cover operating expenses. This would provide a consistent source of funding for full-day care services.
However, the federal government considers its proposed contribution sufficient and has rejected demands for compensation through VAT. The operating costs for the school year 2025/2026, according to the paper, would be 3.24 billion euros per year, but this estimate does not include the costs for the last expansion stage, as the federal government's contribution is yet to be fully determined.
For the last expansion stage, the federal government plans to participate with just under one billion euros. Despite this, Henneke believes a solution must be found that does not leave districts and municipalities with the costs. He proposes that the states commit to keeping their municipalities free from cost burdens, especially operating expenses.
The sticking point in the conciliation procedure is the operating costs. The annual costs for full-day care, as estimated by the Association of Towns and Districts, amount to approximately 4.4 billion euros and are increasing dynamically.
An informal meeting between the federal and state governments is set to find a solution for the full-day care funding dispute. However, as of August 2025, concrete decisions or agreements specifically resolving this dispute have not been publicly reported. The status remains one of continuing dispute and negotiation focused on funding structure reforms to ensure municipalities are not overburdened financially.
The internal analysis by the German Youth Institute suggests that the demand for full-day places is lower than initially assumed. However, the implications of this analysis on the ongoing dispute are yet to be seen. The federal government's stance is based on this lower demand, but municipalities argue that the costs must be covered regardless of demand levels.
In summary, the dispute over full-day care funding between the German Association of Towns and Districts and the federal government is ongoing. Negotiations are continuing to find a solution that ensures municipalities are not overburdened financially while maintaining sustainable full-day care services.
- The German Association of Towns and Districts is advocating for a long-term federal funding commitment to cover the rising expenses for full-day childcare services, citing insufficient funding as the root of the problem.
- A proposed solution is for the federal government to allocate Value Added Tax (VAT) points to municipalities to provide a consistent source of funding, an idea initially proposed by Hans-Günter Henneke, the managing director of the German Association of Towns and Districts.
