The Directorate-General for Budgets (DGO) has already published instructions for central government services on the preparation of the state budgets for 2025 (OE2025), which again include a reserve of 2.5%.
The circular, published this Friday, contains “instructions that public services and organizations must follow in order to prepare their respective budget projects.”
In these projects, organizations such as ministries and state secretariats must, “in accordance with the principle of budgetary stability,” “ensure the budgetary balance of their budget project and an overall positive or zero balance,” the circular says.
In addition, “when drawing up the activity budgets for each entity, a reserve of 2.5% of the total expenditure must be taken into account, with the exception of those financed from income related to compensation payments and European funds.” The National Health Service and higher education institutions are also outside this reserve.
The circular also states that “in programs that show an increase in overdue payments, an additional tax revenue reserve equal to 50% of the amount of the increase confirmed between June 30, 2023 and June 30, 2024 must be created, in accordance with paragraph 3 of Article 4-B of Law No. 8/2012, of February 21, as amended.”
Thus, the ministries are subject to capitulation, and it should be remembered that the previous Minister of Finance, Fernando Medina, decided in the last state budget to deprive the finances of the “authority of the finances to manage capitulation”, even though he retained this instrument.
Captivations are a budget management tool that allowed the Ministry of Finance to retain (subject to prior approval) a portion of the budgetary allocations of organizations and other ministries.
In 2023, its value was €1,242 million. The responsible persons will have to prepare the programmes and notify the DGO of the allocation model for the upper limit by 31 July 2024, and the OE2025 registration systems will be open from 31 July to 14 August.