Annual Report and Statement of Accounts 2017

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1 Annual Report and Statement of Accounts 2017

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4 A surplus of SEK 1,109 million was reported for 2017, which represents a deviation from budget of SEK +848 million. SEK 757 million of the profit can be allocated to the profit equalisation reserve. Like previous years, the surplus is largely the effect of the economic situation and the current economic boom. Higher tax revenues and income from land sales have generated a surplus compared with budget. The very low interest rates have resulted in a surplus regarding the Service department s properties, as well as improved net financial items. Most of the committees have relatively small deviations from budget and the surplus reported for the activities can be attributed almost entirely to central items. The main deficits are in the Disability Support Committee and the Labour Market and Social Welfare Committee. The result indicates good budget flexibility at the city s committees and the financial objective has been achieved. The result has also brought a high level of tax financing for the year s investments, which means improved financial scope for the major investment requirements of the coming years. Target achievement is good for many of the city council objectives, but none of the city council objectives were fully achieved in 2017, with the exception of the city council s financial objective. Target achievement is particularly good in An active and creative city and in A city for work and business. There are major challenges in particular within An equal city and A city for children and youth, including recruiting and retaining expertise within both educational activities and health and social care, as well as being able to offer equal service to all Malmö residents despite their increasingly different conditions. There is an ambition to use various methods to create the conditions for greater equality in the population that runs through all target areas and through the committees focus on participation, equality and sustainability. The number of residents increased by around 5,100 during 2017, which is a slightly slower rate of increase compared with previous years. The birth rate remains high and there is positive net migration. The increased net migration from abroad in 2016 and 2017 is largely the effect of asylum seekers who arrived in A continued large increase in population is also contributing to a continued increase in the number of children/students at preschool, compulsory school and in wraparound care. There is therefore a major focus on securing access to suitable premises and skills provision. Several development initiatives are underway in preschools and schools in order to attain both higher target achievement and equality. With an improved control and management system, the objective at the Compulsory Education Committee is to create more equal schools with higher target achievement, while work is also in progress at the Upper Secondary and Adult Education Committee to provide the conditions for, among other things, better student completion rates. The average merit rating and the proportion eligible to apply for a national programme at upper secondary school fell between 2016 and In contrast, the proportion of students at upper secondary school achieving eligibility for university/college or professional qualification within four years increased. House-building and the expansion of community services remain at a high level. The adoption of urban development plans during the year enabled work to commence on around 3,300 workplaces, 1,500 preschool places, 2,900 compulsory school places and 3,000 homes. Planning permission was also granted for a high number of compulsory school places, preschool places and homes. Construction began on 4,000 4

5 homes in total, which is the highest level for many years. Sales of development land have been at a high level during the year, which has contributed to the surplus compared with budget. An agreement was reached during the year between the Swedish government, Region Skåne and the City of Malmö in relation to the City package for Malmö and neighbouring municipalities, which includes investments in urban bus services, Pågatåg train services and cycle infrastructure, as well as 28,550 homes. An urban development process was also begun during the year through the Amiralsstaden project. The aim is, through broad participation and co-creation, to improve the urban and living environment and to contribute to more equal conditions within a geographical area. Program Lindängen is another urban development project that began during the year, with the aim of improving living conditions for those who live in the area and of developing methods for managing investments that involve several stakeholders and initiatives. For many committees, safety has been a prominent part of their public environment work during the year, including through initiatives for a safer transport environment, safety patrols, monitoring work, lighting and operation and maintenance contracts. In 2017, the number of households that applied for and were granted economic assistance continued to fall. Despite the reduction in the number of households, the municipality s total costs rose. This increase was the result of higher average disbursements to households because of an increase in the national allowance and higher rents. Many households have been receiving economic assistance for a long time. Homelessness continued to rise during Although the rate of increase slowed for adults, the number of children in homeless households continued to rise. On average, more than 5,100 people received assistance with housing every day. The increase is the result of households on average receiving assistance with housing initiatives over longer periods. The municipality s costs for helping the homeless increased by 26% compared with the previous year. Constant development is underway within elderly care and care for people with disabilities in relation to user surveys, health and welfare technology and other digital solutions. The aim is to become a more effective and available activity for both users and staff. Work is continuing within the care service for people with disabilities to develop communication with users in order to enhance their opportunities for participation and influence in their everyday life. The organisation within elderly care was adapted in 2017 with the aim of reducing lead times between inpatient care and health and social care at home. New forms of working have also been introduced within the context of the new health and medical care agreement between Skåne s municipalities and Region Skåne, which aims to offer more advanced care in the home for most patients. During the year, 3,104 new arrivals with a residence permit settled in Malmö. Of the 408 new arrivals allocated to Malmö, 33 could not be received during the year because of a shortage of space, but these will be received during A fall in the reception of unaccompanied children and young people meant that some HVB homes for the target group were closed down during the year. Changes to the government s compensation system for municipalities in relation to unaccompanied children and young people applied from the second half of the year onwards, resulting in lower levels of compensation, and a planned adjustment was therefore made during the year in order to maintain quality and streamline housing activities. In order for the City of Malmö to be able to provide a good service to Malmö residents, it is important that the organisation can 5

6 ensure it has the right skills at its disposal. Work therefore continued during the year, partly to enable the current skills and the skills needed to be described in a systematic and structured way and partly to secure, in a purely practical way, those skills identified as being required. In compulsory schools, this has been done using, among other things, initiatives to create new career paths and salary progression initiatives. New skills, such as teaching assistants and student coordinators, have also been added. Work has also continued to find various ways of offering good work conditions and a sustainable working life. The number of hourly paid staff has fallen for the fourth year in a row, mainly within health and social care and at preschools. Absence through illness also fell slightly during the year. 6

7 The past year, 2017, was as usual a year full of events both big and small that are worthy of mention. I would like to start by saying a big thank-you to all the individuals, associations and companies who in different ways have contributed and are still contributing to making the city a better place in which to live, thrive and work. In particular, I would like to thank the 25,500 City employees, who work incredibly hard to ensure that all of us who live in Malmö can have a good life and receive the best possible service and welfare every day. On 1 May 2017, we launched the City s new organisation. An organisation designed to handle the rapidly growing population and strengthen equality and the quality of care in the best way possible. Another clear aim is to improve and increase the effectiveness of initiatives so that all residents of Malmö who can work do work and provide for themselves. Malmö continued to grow at a rapid rate and there were 5,139 more of us living in Malmö during the year. This put a lot of pressure on house-building. There were 2,600 homes completed in Malmö, with construction begun on over 4,000 more. Anyone taking a tour of the city will now see cranes all over Malmö. Construction is underway not only at Västra hamnen, Hyllie and Limhamn, but also in areas such as Sorgenfri, Lindängen, Holma and Rosengård. Despite a fall in the number of homeless households compared with the previous year, it is concerning that the number of homeless children increased. One of the City s most important tasks for the future is to reduce homelessness. This means creating a better quality of life and also reducing the need and costs for temporary solutions. With the Storstadsavtalet ( City Agreement ) in place between the City, the Swedish government and Region Skåne, it will be possible for us in the future to enable many new additional homes to be built close to an expanded public transport network. The agreement paves the way for the largest investment in infrastructure since the City Tunnel, with a total of SEK 4 billion to be invested in electric buses, train services and cycle paths. There were 6,000 more jobs in Malmö than the year before and companies continued to launch, grow and move to Malmö. Malmö company Massive Entertainment, for example, was commissioned to turn the world s highest grossing feature film, Avatar, into a computer game and plans to employ a further 200 people in the future. The Game Assembly was named the second-best game design school in the world. Property company Rosengård fastighets AB was appointed during the year to begin planning on the Culture Casbah urban development project. Work on the job pact intensified, with the aim that more Malmö residents will be able to provide for themselves. It was pleasing to see that the number of households needing economic assistance fell for the second year running. Unemployment is still far too high, however, and this is one of the most important challenges for the future. Schools play a particularly important role in the continued development of both individuals and the City and we are pleased to be able to confirm that school results continue to improve, for the seventh year in a row. There has been a major focus on both expanding and developing the activities and teaching. Gottorpsskolan, Hyllievångsskolan and Rörsjöns förskola are just a few examples of new premises that contributed both to more places and to better learning environments for students and preschool children. This work continues with high ambitions. 7

8 There was a strong focus during the year on increasing safety in the city, together with the police and other authorities. The city council approved an additional SEK 50 million for investigating illegal clubs and other illegal activity, measures to increase safety in public environments and more resources for working with young people at risk. Having contributed to the transformation and development of Malmö for 19 years, Malmö College took down its signs to make way for new ones bearing the name Malmö University. Following our efforts on this issue over several years, many of us were particularly pleased when the government and the Swedish national police also took the decision to launch a police training course at Malmö University. Malmö FF consolidated its position as the best men s football team in Sweden by winning the Allsvenskan league for the 20th time. The Marine Education Centre was opened and will contribute to the knowledge and understanding of the sea. The Leisure Bank launched and now enables Malmö residents to borrow leisure equipment free of charge, benefiting both public health and the environment. The decision was made to hold the international World Pride event in Copenhagen and Malmö in 2021, which is expected to bring in up to half a million visitors. National Geographic listed Malmö as the world s eighth hottest travel destination and Travel + Leisure magazine named the city one of the world s best Christmas cities. Asset management firm Savills Management ranked Malmö third, behind London and Paris, of the hottest European cities to invest in, thanks to Malmö s young population and our sustainability work. The City of Malmö was the only Swedish municipality to take part when the government showcased the work on the global sustainability goal Agenda 2030 at the UN summit in New York. And when the City issued its first green bond during the autumn, interest in helping to finance sustainable green investments in Malmö was so great that the City was able to reduce its costs. The City was one of few Swedish municipalities to be awarded once again the highest possible rating by the world s leading credit rating agency. The financial objectives were achieved. Tax revenues increased and combined with, among other things, a government construction bonus and increased capital gains, the City made a profit of just over SEK 1.1 billion. This result means that we continue to have good long-term conditions at a time when the city is growing rapidly and the need for investment in the expansion of community services remains strong. Katrin Stjernfeldt Jammeh 8

9 The city council has established ten objectives within nine target areas, as well as a financial objective. Each committee and company board has a responsibility to help achieve the city council objectives. The committees and company boards therefore draw up their own objectives (committee objectives/company objectives) based on the city council objectives, as well as following up committee objectives/company objectives (indicators). The committees and company boards are responsible for following up and analysing what has been achieved in relation to the objectives adopted by the committee or company board, based on the city council objectives. Target achievement is good for many of the city council objectives, but none of the city council objectives were fully achieved in 2017, with the exception of the city council s financial objective (which is reported on page 59). The city council objectives are long-term in nature and follow-up therefore consists of an assessment as to whether development is heading towards target achievement. Target achievement is assessed in two stages. Firstly, an analysis is performed of how well the committees objectives live up to the ambition expressed in the city council objectives. This involves a goal support assessment to determine how well the committee objectives support all elements of the city council objectives. Based on how well the goals set by each department support the long-term strategic goal, the next stage involves a qualitative assessment of target achievement for each of the city council objectives in terms of the extent to which the committee objectives have been achieved during the year. A target is achieved only if the goals set by each department are considered to provide good support for the long-term strategic goal while at the same time the committees have achieved the committee objectives linked to the respective city council objectives during the year. The committees work on the assignments given in the 2017 budget are reported in a separate appendix. The organisational change that took place in 2017 has meant new conditions for several committees and activities. Many committees have begun new processes, built new organisational structures and entered into new forums for collaboration. It is considered that this will have a positive effect on target achievement within all target areas in the long term. For example, the Culture Committee and the Leisure Committee report that they now have more explicit responsibility for the entire city, which creates better conditions for achieving the targets of everyone being able to participate in the leisure and cultural activities on offer. The Disability Support Committee reports that the consolidation of expertise concerning the committee s target groups creates the conditions to improve the overall view and continuity, as well as cooperation with regard to the needs of users. For some committees, however, the reorganisation has resulted in delays during the year, for example in relation to initiatives as part of A city for work and business. The committees and companies report good target achievement within several target areas, although none of the city council objectives were fully achieved 1. Target achievement is particularly good within An active and creative city, despite the fact that continued active work is needed in order to make the range available to more people and on equal terms. One example is the Leisure Committee, which, based on the results of the Young Lifestyle research study, has targeted initiatives to encourage more girls to participate in leisure activities, which in the long term may also increase target achievement within An open city. The committees and companies are also carrying out intensified work within A city for work and business, for example by offering more internships to young people, students or Malmö residents who are distanced from the labour market. The level of employment among Malmö residents has increased and unemployment has fallen, albeit marginally, compared with the previous year. Youth unemployment has also fallen. There remain 1 With the exception of the financial objective. 9

10 large differences, however, between different groups, such as between women and men and between people born in Sweden and those born abroad. There are considered to be major challenges within An equal city and A city for children and youth, for example, where an increase in children, young people and the elderly in the population means continued difficulty in securing skills provision. In order to achieve the objectives, core activities, such as preschool, school, health and social care, need to be able to recruit qualified staff, making target achievement within A city with good work conditions an important prerequisite. There has also been a strong increase in the number of homeless people over the past few years and many of these fall into the category of structural homeless, whose main problem is that they do not have their own home. House-building continues at a rapid pace and community services are gradually being adapted to the increased population. Target achievement is therefore considered to be relatively good within An ecologically sustainable city (sustainable urban structure for a growing population). In times of rapid expansion, however, continued focus is required in order to ensure that the urban structure is sustainable environmentally, socially and economically. There must be enough homes for all Malmö residents and urban planning needs to counteract segregation. For example, the Compulsory Education Committee reports that segregation is making target achievement more difficult within A city for children and youth. Segregation means that students with poorer socio-economic conditions have classmates with a similar background to a great extent, while research shows that mixed study groups benefit both high-performing and low-performing students. Extensive work is underway for the objective that Malmö shall be a health-promoting and climate-smart city and there is a positive trend with regard to the energy use per resident, for example. At the same time, developments in areas such as reduced carbon dioxide emissions, the expansion of public transport and climate adaptation are not progressing quickly enough to achieve the city s demanding environmental objective. With regard to the objective that Malmö is to be an open, equal and inclusive city (An open city), the City of Malmö s work on gender mainstreaming has been the focus of attention and the committees reports indicate that positive progress has been made during At the same time, the objective is horizontal in nature and to achieve the target for the city as a whole, it needs to be a focus of all committees and company activities. The committees that have made the most progress, including the Preschool Committee, have linked equality and anti-discrimination to their systematic quality work, which improves the conditions for sustainable development work. Although the city council objective has not been fully achieved, it is clear that the City s committees and companies continue to work with the prioritised areas within A safe city and the initiatives implemented are very much in line with the city council s overall ambitions and focus in the budget for One example is a new cooperation agreement between the City and the police, which makes the work more systematic. At the same time, it is considered that the committees preventive work with trust, confidence and social establishment can be strengthened and also more closely linked to safety work. In order to attain greater target achievement within all target areas, there is a continued need to strengthen the City s collaborative structures and initiatives, within maintenance support and skills provision for example. Working to ensure that Malmö s children and young people receive the support and education they need is also a long-term collaborative process. Finally, in the year s follow-up of the city council objectives, three areas have been identified that are particularly prominent and are a common theme throughout all target areas. They are closely related to the ambition of greater equality for sustainable development as expressed in A young, global and modern city, but appear in the follow-up of several other city council objectives, probably because the work with this perspective needs to be based in the activities: 10

11 The committees are working to establish increased participation and influence linked to their activities in different ways this involves everything from user influence in elderly care to increased participation in urban planning processes. Several committee objectives aim for greater equality between Malmö residents, for example through the compensatory mandate, and to create an activity characterised by equality. Some committees are striving to create conditions to reach all population groups. This is done by methods such as identifying prioritised target groups and targeting initiatives, for example, in order to create equal conditions to participate in the leisure and cultural activities offered. Increased target achievement within all city council objectives also requires perseverance over time, even if the results or effects are only realised a long time into the future. This means being bold enough to tackle the most complex development areas and overcoming any conflicts of objectives. Several decisions were made by the City of Malmö in 2017, which together contribute to sustainable development. For example, a digitisation programme, an agreement on cooperation between the City of Malmö and the non-profit sector, and a programme for children s rights were all adopted. The reorganisation during 2017 was felt to be positive in relation to the target area as it contributed to new areas of cooperation. The new committees largely found the changes to be positive in relation to their work on the target area. At national level, the Swedish Commission for Equity in Health published its final report, which identified a number of areas where measures need to be targeted in order to close the health gaps. At national level, the government also presented a digitisation strategy for a sustainable digitised Sweden with the overall aim of making Sweden the best in the world at exploiting the opportunities of digitisation. The city council objective is visionary and encompasses several different perspectives. These include gender equality, equality, anti-discrimination and the environment, which are also to be found in other target areas (see in particular An open city, An equal city and An ecologically sustainable city). Here, the committees work in other target areas also contributes to target achievement within A young, global and modern city. The visionary nature of the objective means that the committees and companies have different interpretations of which targets should be set in order to contribute to target achievement. The elements that most committees and companies have included in the target are mainly those relating to participation/inclusion and digitisation. No committee or company has set any specific target relating to gender equality, equality or antidiscrimination. These targets are instead found under An open city and An equal city. The majority of the committee and company objectives are considered to be fulfilled and many others are well on the way to being fulfilled. The term pride is unique to this objective, but with the exception of the Compulsory Education Committee no committee or company has adopted an objective that clearly states that it aims to make Malmö residents feel proud of their young, global and modern city. The recurring factors for success in the reports of the committees and the companies are that the components of the city council objective (such as participation, equality and gender equality) have been developed over a long time and have been given a high priority. This work has contributed to greater understanding for the implementation of measures that work positively towards the city council objective. Another success factor is making strategic choices, which in turn have contributed to target achievement. For example, the Preschool Committee states that work on the children s participation in the systematic 11

12 quality work has a high priority at the municipality s preschools and that time for activity development has helped to create the necessary scope for reflection and planning. Reasons why committees and companies have not achieved their objectives include the fact that the committee and company objectives are long-term in nature and therefore require ongoing development work. Some committees believe that they have not achieved their objectives because of the heavy workload of employees. Finally, it is found to be impossible to make an overall assessment of target achievement as there are shortcomings in how well the goals set by each department support the long-term strategic goal. The positive economic situation in Sweden during 2016 and 2017 contributed to increased employment and lower unemployment. The number of jobs in Malmö also increased by more than 10,000 new gainfully employed people between 2014 and The level of employment among Malmö residents has also increased. The rate of increase is particularly positive and exceeds the national average, although Malmö still has a lower proportion of the population employed than other major cities and the country as a whole. Unemployment has also fallen compared with the previous year, albeit marginally from 14.9% to 14.7% of the workforce. Youth unemployment has also fallen, from 20.3% of the workforce in 2016 to 19.1% in This positive situation is balanced, however, by the trend in the composition of the unemployed, which shows more unemployed people in a vulnerable position on the jobs market and fewer unemployed people with adequate education, training and professional skills. There remain large differences between different groups, such as between women and men and between people born in Sweden and those born abroad, as well as between young people and others. At the same time, there is a noticeable shortage of qualified labour according to both the Economic Tendency Survey and the Swedish Public Employment Service. A large number of professions have a shortage of labour and skills provision has been made more difficult, particularly in the public sector where there are shortages in many professions that require higher education and even upper secondary education. The difficulties of skills provision and a rising population present major challenges to the municipal activities. Businesses are also experiencing difficulties in recruitment, which in the long term may hamper the companies expansion and employment growth. Access to childcare is an important condition for the opportunities of parents to participate in working life and is therefore a prerequisite for self-sufficiency. Through long-term strategic planning, adjusted routines and measures to ensure developed information and good dialogue with independent accountable authorities within preschool activity, all children whose parent or guardian applied for a place in 2017 were offered a place in preschool activity. Completing education at secondary level is considered vital for the individual s ability to establish themselves on the labour market and to be able to support themselves. The Compulsory Education Committee s objective for all students who complete compulsory school to be eligible for study at upper secondary school and to be well prepared for the future labour market has only been partially achieved. A particular reason for this is that the committee has not completely managed to compensate for the different backgrounds of students. The Upper Secondary and Adult Education Committee also considers that the objective for students to be satisfied with their education and for results to be stable over time has only been partially achieved, as the target level set for the year has not been fully achieved. 12

13 The technical committees have contributed clearer, better and more long-term foundations for planning and strategies for the city s development of business and opportunities for jobs. The sale or provision of land enabled around 3,300 new jobs to be created during the year. During the year, major emphasis was placed on Malmö residents having access to a growing jobs market in the plans for offices on municipal land. Interest has remained high in office premises in Hyllie. The service sector is developing strongly and Hyllie remains an interesting establishment location for many companies. Other development in Hyllie, with housing and municipal services, is also strengthening interest in offices. The Labour Market and Social Welfare Committee, which is responsible for municipal labour market schemes, has several initiatives targeted at different groups of jobseekers as well as recipients of maintenance support, SFI students and young people. The majority of committees and companies have also contributed to the city council objective by creating and providing internships for young people, students or Malmö residents who are distanced from the labour market and by stipulating social requirements in procurements. MKB has, through social responsibility in procurement, helped more than 50 people to be offered an internship or employment. Intensified cooperation, both internally and with external stakeholders, is highlighted as an important factor for success in several objectives with relatively good target achievement. The strategic agreement which the City of Malmö and the Swedish Public Employment Service revised during the year represents an important forum for cooperation with common goals and analyses, as well as a management structure. Subordinate local agreements are helping more Malmö residents to be able to provide for themselves through work, study or other maintenance. Another example is the investigation carried out by the Disability Support Committee together with the Labour Market and Social Welfare Committee, in collaboration with the Swedish Public Employment Service and the Swedish Social Insurance Agency. This investigation provides a clearer picture of the situation for people with disabilities in relation to the ordinary labour market and provides an important basis for strengthening the connection to the labour market. The committees indicate several specific solutions and prioritised areas for improving target achievement. The technical committees refer to the setting of clearer targets in the planning of areas of activity for workplaces that are employee-intensive and make efficient use of space in accordance with the expansion strategy and the master plan. The Compulsory Education Committee sees a need to continue to develop a systematic approach that reduces individual variations between the work of teachers, work teams and schools and so the students results. The Labour Market and Social Welfare Committee has developed a new participant process to ensure that Malmö residents who receive economic assistance are given access to municipal labour market initiatives within specified timeframes. The work begun within the context of the new committees is also considered to be a good basis for continued work during For example, a new working method to create more jobs in the City s activities will be implemented during 2018 as part of the Job pact. Reporting shows a greater focus on initiatives in the labour market area than in the business area, which may be considered challenging given the close relationship between the issues. In 2017, a new business programme was adopted with five focus areas and subordinate aims: Malmö in its surroundings, Attractive environments and accessibility, Innovation and enterprise, Skills provision and Municipal service. The programme acts as a strategic tool to help the City s work with business to contribute to increased target achievement in the city council s target area A city for work and business. In summary, there has been positive progress with enhanced cooperation both internally and externally and intensified work to provide Malmö residents with better conditions to provide for themselves. The overall assessment, however, is that the objective has not been fully achieved. 13

14 Of the committees and companies that have followed up their objectives within the target area, only a few consider that they will achieve all committee objectives by the end of the year and the city council s objective is not considered to be fully achieved. In order to work even more effectively towards the aims of the objective, there must be greater understanding of the scope of the objective and its impact on children and young people. This is not always clear in the follow-up of the committee and company objectives. A good example is housing and school segregation, which the Compulsory Education Committee reports is a major challenge, but which the committees have difficulty influencing. The contributions of the three education committees are key to assessing the degree of target achievement. Preschools, compulsory schools and secondary schools face major challenges in compensating for the different conditions of children and young people. Conflicts of objectives arise around the boundaries between the different tasks and areas of responsibility of the committees and the companies; for example equal access to preschool places versus the child s opportunities to move freely in public spaces, as open spaces for preschools and schools have reduced as the city has become more concentrated. The education committees describe how they continue to face major challenges in compensating for the differences in the conditions of children and young people. The Preschool Committee is working for a more equal preschool with improved staffing in areas that are more socio-economically weak at a time when there is a national shortage of qualified preschool teachers. All education committees highlight skills provision as a key to success and quality in the activities. Skills provision is mainly described under A city with good work conditions, but affects target achievement within A city for children and youth. The Compulsory Education Committee reports that neither Malmö s schools nor Sweden s schools are managing to fully compensate for the different backgrounds of students. As before, there are major variations in the knowledge outcomes between schools and student groups. Within upper secondary and adult education, the proportion of students achieving qualification on the university preparatory programmes of upper secondary schools is relatively high, but lower than the national average for vocational programmes. The difficulties in compensating for the different conditions of students can be seen on the introduction programme for students who left compulsory school without being eligible for upper secondary school. Progress there is often slow and the total completion rates are considered by the Upper Secondary and Adult Education Committee to be inadequate. A long-term collaborative structure is being established between the Culture Committee and the Leisure Committee to improve the opportunities for children and young people to do activities in their free time. Initiatives where activities are offered free of charge using government subsidy, for example, have generated increased cooperation between the Culture Committee and the Leisure Committee. The Leisure Committee is working to provide conditions to reach all of the city s children through initiatives such as the formation of more school sports associations in order to encourage influence and physical activity. The work also focuses on expanding the activity in those parts of the city where the number of associations and children s levels of activity are low. The Culture Committee considers that it generally has difficulty reaching older youths. The Service Committee reports that increased cooperation and transparency between the committee and schools provide a good basis ahead of the upcoming improvement work, including in relation to school meals. The Technical Committee is working, among other things, to ensure that the route to school is safe in terms of traffic, the Environment Committee on improving indoor and outdoor environments at schools 14

15 and preschools and the City Planning Committee is using the social consequence assessment tool, which helps to incorporate the perspective of the child in all urban planning. The follow-up of the new committees consists primarily of base year measurement and mapping current activity. Target achievement at city council level therefore cannot be assessed on the basis of the improvement in how the goals set by each department support the long-term strategic goal for The new committees mostly deal with the most vulnerable groups in society, which means that cooperation and child participation and influence are important parts of their work. It is the companies that report to the greatest extent that they do not have committee objectives directly related to the city council objective but that work is taking place within the context of ordinary work or within the context of other objectives. One example is Parkeringsövervakning i Malmö AB, which helps by informing young people about traffic regulations and increasing understanding of why there are parking wardens. MKB Fastighets AB works to create participation, safe residential areas and good schools from a more long-term perspective, for example by offering summer jobs and homework help to senior students. In April 2017, the Development plan for the rights of the child in the city of Malmö was adopted. They work to implement this is ongoing, but is not yet fully visible in the reports. The rights of the child need to permeate the municipality s activity and service so that the children and young people of Malmö receive the support and education to which they are entitled. In summary, the assessment is that the city council objective has not been fully achieved. The work to ensure that the children and young people of Malmö receive the support and education they need in order to grow in safe and equal conditions and to develop their full potential is a long-term collaborative process, which means that target achievement will not be clear during a single budget year. There has been positive progress during the year, but to attain target achievement it is important that committees and companies focus on the compensatory mandate in order to create equal growth conditions for children and young people in Malmö. The City of Malmö carries out successful equality and anti-discrimination work. This is demonstrated, among other things, by the fact that Malmö is a model municipality for in a government-funded project for gender mainstreaming. The city s strategic framework for its work on various forms of discrimination has inspired several municipalities and the city receives regular national and international study visits with a focus on systematic work for equality and gender equality. Several activities, analyses and training programmes have been carried out in the City s operations in order to help achieve this objective. The committees reports show a good result overall in terms of how well the goals set by each department support the long-term strategic goal for the different perspectives within the target area. For example, the Disability Support Committee reports that there is a need to develop the committee s work with domestic violence and to begin work on the resource allocation model adopted by the committee. The Leisure Committee has targeted measures based on the results of the Young Lifestyle survey to encourage more girls to participate in leisure activities. The Leisure Committee and the Compulsory Education Committee report initiatives to combat abuse within A city with good work conditions. The Leisure Committee states that the committee particularly needs to work with this through continued dialogue on issues of values, increased support from HR and through better knowledge among managers and safety officers of how bullying and abuse can be prevented and 15

16 handled. On the other hand, none of the committees report how the issues that arose in the social debate during the year in relation to discrimination and abuse (for example from students and teachers in schools, care staff or from women with disabilities) influence the ongoing work. Initiatives are underway within gender mainstreaming in several areas. Anti-discrimination work primarily takes the form of having various activities LGBT-certified. Other committees state that they work for inclusive activity, but it is often unclear how the term inclusive is defined. The committees reports indicate that the work is most successful and sustainable in those committees where it is integrated in standard processes and structures and is considered part of the committee s normal areas of responsibility. One example of how the target area has been integrated into ordinary activity is the Preschool Committee, which uses its systematic quality assurance to monitor the work done in this area. This increases the opportunity for sustainable development work. Finally, it is important to mention that the target area is horizontal in nature and if the city is to report good target achievement, it should permeate all the activities of the committees and companies. As in the previous year, the assessment is that the objective has not been fully achieved, but that there is movement towards target achievement. This objective means that the City of Malmö must provide good welfare and service to Malmö residents that help them to feel they have social and economic security in their everyday lives. For example, elderly people in Malmö must be able to affect and have influence over their everyday lives and in the community, and people with disabilities must be able to participate in society on equal terms in order to promote health and participation. Over the next 10 years, the number of older people will increase, while continued rapid growth in the population of Malmö in general means greater demand for housing, jobs, schools and care for children and young people. This places demands on all committees to offer high quality services. Skills provision remains a major challenge for the Health, Care and Social Care Committee, the Disability Support Committee and the Labour Market and Social Welfare Committee. In 2017, implementation began of the agreement between Region Skåne and the municipalities of Skåne on the division of responsibility and development in relation to healthcare in Skåne. The agreement will mean that more patients will be cared for in their homes instead of within primary care or inpatient care, which places greater demands on the activity of the City of Malmö. The Compulsory Education Committee reports that a major challenge within the target area is that they have not been able to compensate for the different home life conditions of students to an adequate extent. There are still differences between the results of different student groups and between and within schools. Work is underway to identify how cultural activity can be given better conditions to provide a compensatory function and contribute to greater social sustainability for children and young people, as well as adults, throughout Malmö. Initiatives during the summer focused in particular on children and young people in socio-economically vulnerable areas. Malmö Exhibition Hall, for example, developed initiatives with a focus on people who are distanced from the labour market. Malmö s elderly have also been a prioritised target group for the activity. The Preschool Committee is working to create conditions for a preschool activity that is adapted to the needs of children and that compensates for the differences in the conditions of children. Every child s right to support has been a prioritised development area within municipal preschool activity since

17 With regard to homelessness, the Labour Market and Social Welfare Committee s objective has only been partially achieved. Structural homelessness has risen and although the rate of increase in the number of homeless people has slowed, the number of homeless families with children has increased compared with the previous year. This trend generates increased costs for housing. At the same time, the target of offering at least 500 people accommodation in newly created transitional apartments has been achieved, which means that a total of 628 people have been offered accommodation. The target of at least 450 people who have been living in transitional apartments progressing to the ordinary housing market has also been achieved. With regard to the work to increase users opportunities to participate in society, the Disability Support Committee has focused, among other things, on individually adapted support that helps to improve selfesteem and enhance the opportunities to participate in society and to make their own independent decisions. This can also contribute to a meaningful existence and a feeling of influence over their everyday life. The Health, Care and Social Care Committee has focused its work on achieving an increased perception of being treated well, a feeling of safety, influence over healthcare and social care, as well as increased trust in staff. The committee has begun work to review existing models of how the activities work with dialogue, influence and participation. The committees report that key factors for success in the activities are having functioning values work and improved staff continuity, as the quality of interaction with the users is decisive for increased target achievement. The committees also report the importance of outreach activities and targeted initiatives. Investments in IT and digitisation, efficient handling processes and cooperation between committees and with external stakeholders are also extremely important for increasing target achievement. The committees report different reasons for the lack of target achievement, which is also linked to different levels of ambition in the objectives. For example, in some cases the measures implemented have not had the desired or anticipated effect. In other cases, more time is needed before the anticipated effect can be observed. It is also reported that a lack of resources has resulted in delayed planning and therefore also delayed measures and activities. Based on the follow-up by committees and companies of the committee and company objectives, there appear to be fairly major challenges within the target area, with regard to skills provision for example, and the overall assessment is that the city council objective has not been fully achieved. Development within the target area has been affected by gangland shootings and organised crime during the year. The reporting of crime can also lead to a perception of decreased safety. In 2017, funding was set aside for a specific focus on initiatives to increase safety in the City of Malmö, in relation to both the physical environment and social work. For example, a specific initiative targeting sexual assault during the Malmö Festival, a safety initiative to combat gangland shootings involving, among other things, Group Violence Intervention, and various forms of collision protection and safety patrols were all implemented. The prioritised areas for A safe city in the City of Malmö s budget for 2017 are young people at risk, organised crime, preventing the abuse of women and domestic violence, hate crime, drug prevention initiatives, traffic safety and safety in the public environment. The focus for 2017 lies in similar areas. In view of the initiatives reported and implemented in relation to the prioritised areas and focus in the 2017 budget, the assessment is that the committees activities are very much in line with the city council s stated 17

18 ambitions. For example, the Labour Market and Social Welfare Committee, in conjunction with the City Executive Board and the Compulsory Education Committee, has catalogued honour-based issues. The Service Committee and Leisure Committee have also carried out an investigation of Hylliebadet s changing rooms from a norm-critical safety and accessibility perspective. The evaluation identifies which spatial and material factors contribute to a feeling of accessibility and safety in the shower and changing rooms. The content of the final report resulted in a number of suggestions for amended project design guidelines, which will be incorporated in the next version of the City properties project design instructions. The Health, Care and Social Care Committee has also carried out work during the year that contributes to positive development in terms of health-promoting and preventive measures and to increase safety at home. The safety and security policy, which emphasises the systematic, promoting and preventive perspective, is also in line with the focus for Cooperation with the police, between administrations within and outside the City and with civil society has also been strengthened during the year. There is a new cooperation agreement between the City and the police, which expressly states a systematic approach to safety work. In order to obtain a common picture of the current situation, as a starting point for cooperative initiatives, weekly meetings have been introduced throughout the city. The introduction of the Communities That Care (CTC) work model for support initiatives and the preventive work designed for the entire population (and not just for specific individuals) is also considered able to contribute to increased target achievement. The work is based on the idea that safety and security are about confidence, trust, social engagement and participation. The overall assessment is that in the reports of the committees and companies there is a lack of focus to a certain extent on the underlying aspects of safety, such as confidence and participation, and therefore a preventive perspective. Participation is nevertheless highlighted in several other target areas. The fact that safety is a feeling specific to each individual and linked to a time and a place may result in committees and companies interpreting the objective in different ways based on their respective mandates. Several committees report that they have achieved the committee objectives, but the assessment is that the city council objective has not been fully achieved. The reports of the committees and the companies show that work actively takes place to offer Malmö residents a meaningful and varied range of leisure and cultural activities. Depending on the level of ambition of the committees and the companies with regard to the variety of their range, participation and quality and whether specified timeframes have been adhered to, a large proportion of the committee and company objectives are considered to have been achieved. Central to target achievement is reaching all residents of Malmö. This means that the range needs to be adapted based on the needs of the different groups. In order to work on this in a systematic way, committees and companies need to identify target groups and target their initiatives to ensure that the conditions are in place for equal participation in the city. Several committees have had prioritised target groups within the target area during the year; for example new arrivals and unaccompanied children or people with disabilities. Through better cooperation at the planning stage, activities for the prioritised target groups can be intensified and complement one another with less risk of the City s committees competing for the same target groups or age ranges. 18

19 The Leisure Committee s follow-up shows that it has made investments in prioritised target groups, both on its own and together with others, and this is planned to continue in One example is targeted measures to encourage more girls to participate in leisure activities based on the results of the Young Lifestyle survey. The committee has also contributed by creating conditions for open activities aimed at children and young people. A varied range of free activities has been organised in conjunction primarily with clubs and associations with a geographical spread across the city, with a focus on areas with a low level of activity. A certain amount of variation in ambition is clearly noticeable in the committee and company objectives, which is largely due to differences in the committees core activities. The assessment is that in some cases the objectives could have been formulated on the basis of the wider perspective of all of Malmö. The reorganisation resulted in new committees, while some committees received amended and expanded mandates. Of greatest interest is the change in geographical scope for several of the larger committees within the target area, where they have been given new opportunities to take more explicit responsibility for the target area within the entire city. Through the developed networks that exist in the city districts area development departments, extremely valuable knowledge and collaborative partners have been gained primarily by the Culture Committee and the Leisure Committee. The assessment is that this has led to an increase in target achievement within this area. The continued work with the Culture Strategy is considered to contribute to increased target achievement by providing Malmö residents with a wide range across the entire city, in addition to the activities of the Culture Committee. Increased cooperation from planning to execution is vital for target achievement. For example, it is important for target achievement that the education committees evaluate the work that has begun with the Culture Committee and other cultural institutions in the city, where students, among other things, are made aware of the range of cultural activities on offer through the Culture Map. Two culture secretaries within the Compulsory Education Department work to support the schools 150 or so culture officers and educators in order to promote the presence of culture in schools, increase equality in the students access to the community s cultural offering and increase the students opportunities to develop their creativity through aesthetic learning processes. The assessment is also that target achievement is enhanced through the cooperation between the Preschool Committee and the Culture Committee that is based on the culture strategy and on the objective of all children having equal access to culture regardless of background. A physical arena for cooperation is the Creative learning centre, which offers activities to children at municipal preschools as well as skills development to employees. In the city planning processes, it is important to have a functioning dialogue between all the committees that are affected. For example, the Service Committee is a support function that is central to the target achievement of the Leisure Committee and the Culture Committee and it is therefore extremely important that there are functioning structures for communication and dialogue between these committees. Several committees stress the importance of continued and intensified dialogue with the Culture Committee and the Leisure Committee, as well as clubs and associations and civil society, in order to achieve the objectives within the target area. Some committees prioritise external cooperation and the assessment is that it is at least as important to develop internal cooperation in order to increase target achievement. In summary, target achievement for committees and companies is relatively high. However, the assessment is that the city council objective has not been fully achieved, primarily because the Culture Committee has not fulfilled the objective of equal conditions for participating in culture in the whole of Malmö. This is a long-term objective that is important for the City s target achievement as a whole. 19

20 There are two city council objectives within this target area. The first focuses on creating a sustainable urban structure for a growing population, while the second expresses the ambition to be a healthpromoting and climate-smart city in which it is easy to make sustainable choices. Overall, follow-up indicates relatively good target achievement during the year, although the city council objective has not been fully achieved. The city s committees and companies work mainly with two general tasks to achieve the objective of a sustainable urban structure for a growing population; community services and spatial planning. These tasks are not separate from one another but take place in parallel as the city grows. However, in order to clarify the contribution of the respective committees and companies to the city council objective, it may be easier to think of these as two general municipal tasks. The rapid population growth that has taken place in Malmö in recent years means significant challenges for both community services and spatial planning. Increasing capacity at a rapid rate and at the same time maintaining or increasing quality is a challenge that many of the City of Malmö s committees and companies grapple with in their day-to-day activities. In order to achieve the city council objective of a sustainable urban structure, all three sustainability aspects must be taken into consideration at the same time in order to ensure ecologically, socially and economically sustainable development in this work. Working for a sustainable urban structure therefore means that a number of conflicts of objectives must be handled. For example, high environmental ambitions in some cases mean higher costs, at least in the short term. In the longer term, however, consideration of the environment can be economically sustainable. Another relevant conflict of objectives is the general ambition for Malmö to be a compact and green city. Densification means, by definition, that multiple interests must share the same space, which requires a constant balancing between, for example, community services, house-building and green spaces. This type of cooperation is key to handling conflicts of objectives. This is an area where there has been positive development among the committees and companies of the City of Malmö in recent years. For example, the Preschool Committee and the Compulsory Education Committee have developed their strategic property management work and actively participate in the relevant planning processes. Despite the improvements that have been made, cooperation needs to be developed further in order to achieve a sustainable urban structure together in Malmö. A lot of work was done in 2017 to develop the city towards the city council objective. Construction continues at a rapid pace in the city. MKB completed 520 apartments during the year and at the turn of the year had 1,066 homes in production. MKB has the target of constructing 2,250 new apartments by The work of the City Planning Committee also contributes to the high rate of construction. Planning permission was granted for almost 5,000 homes during the year, while 3,654 homes have been made possible in the adopted urban development plans. The work of the Technical Committee and the city s legal property owners are also contributing to the city s physical development. In 2017, development activities returned a surplus of SEK 475 million, which illustrates the high rate of construction in the city. The fact that a lot of construction is taking place in locations close to public transport also helps to create a sustainable urban structure as the city grows. In 2017, Sverigeförhandlingen (The National Negotiation on Housing and Infrastructure) was concluded and the City package for Malmö was signed. The implementation of the City package will involve major investments in infrastructure and housing, co-funded by the government, until the 2030s and will therefore have a major impact on the future physical environment and structure of Malmö. This will include 20

21 investments in, among other things, urban bus services, Pågatåg train services on the Continental Line and cycle infrastructure. Major steps have been made in terms of adapting community services to an increasing population. In recent years, for example, capacity within the city s preschool and compulsory school activity has been increased, with 1,700 compulsory school places created during the past year. The committees also highlight their active work in various urban planning processes to present the needs of their activities and to have them taken into account early in the planning stage. At the same time, they stress the importance of counteracting the cost trend for premises and operating costs, as this has a negative impact on other parts of the activity. The Labour Market and Social Welfare Committee, the Disability Support Committee and the Health, Care and Social Care Committee also actively work to adapt and develop their activities for a growing Malmö. These committees participate in various planning processes in order to present the perspective and needs of their users. The Disability Support Committee reports that it is a challenge to meet its target groups needs for housing. For example, some of their users need a quiet rural environment, which is not always compatible with a compact city with internal growth. Work on ecological sustainability is progressing on many levels, but not quickly enough. The Environment Committee states, for example, that further initiatives are needed in order to achieve more efficient use of resources and energy. The committee also writes that of the 19 sub-areas in the City of Malmö s environmental programme, it looks as though only two of the ambitious targets will be met on schedule. Overall, the City of Malmö s committees and companies are actively working to adapt community services and spatial planning to an increasing population. Progress has been made in the right direction in several areas, although major challenges still remain. The city council s objective is not just about expanding at the rate required by the population increase, however; it also aims to create a sustainable urban structure. To achieve this objective, further work is required to strengthen both the ecological and social aspects of sustainability in the city s future development. Finally, it can be confirmed that the follow-up indicates relatively good target achievement during the year, although the city council objective has not been fully achieved. Extensive work is also being carried out by the City s committees and companies in relation to the city council s objective for Malmö to be a health-promoting and climate-smart city. Initiatives are being implemented in several areas to reduce the organisation s own environmental burden. Buying organic food is an important part of this work. The Service Committee, which runs the city s school canteens, used 76% organic food in its canteens during the year. The Preschool Committee also reports that the proportion of organic food in its activity has increased from 57% in 2015 to 73% in This has helped to reduce the ecological footprint and at the same time means that the food served to children and young people contains smaller quantities of chemical residue. This is an example of how health-promoting and climate-smart work can go hand-in-hand and strengthen one another. The Environment Committee actively works to develop food handling in the City of Malmö s activities. Among other things, the committee has organised a training programme aimed at reducing the climate impact of food and cutting food waste. A chemicals plan with a focus on children and young people was adopted during the year and represents an important cornerstone of the work to create healthy indoor and outdoor environments that are free from harmful substances. 21

22 Another important element of the work to ensure safe and healthy food in Malmö is the Environment Committee s food inspections. During the year, the committee enhanced its cooperation with the Swedish Tax Agency, the licensing authority and the police, with specific joint initiatives implemented aimed at reducing fraud in food handling. Reducing the use of chemicals is another important area for making the City s activities more environmentally friendly and healthy. The Service Committee, whose activity in many cases requires a lot of materials and resources, worked during the year to catalogue and reduce the number of chemical products it uses. To achieve the objective of Malmö being a climate-smart city, the City s committees and companies are working to reduce energy consumption in their activities. For example, MKB achieved its target of reducing the climate impact per apartment by 20% during the year. This was done through measures including the transition to renewable district heating, individual metering of hot water and energy-efficient new production. The City Planning Committee and the Technical Committee also actively worked to reduce the environmental impact of new construction in A dialogue was held, as part of the new Environmental Construction Strategy for example, with private constructors to incorporate greater consideration for the environment. The proportion of renewable district heating increased by 34 percentage points during the year, as the City of Malmö made an important climate decision when the Service Committee renewed its contract for the supply of district heating for the years The City and EON signed an ancillary agreement on renewable district heating involving a transition from fossil fuels such as natural gas to renewable biofuel such as wood chips. By 2020, the municipality s district heating will be 100% renewable and in a new agreement with EON, the City of Malmö is guaranteed zero carbon dioxide emissions. The Service Committee s proportion of self-produced renewable energy in 2017 was 6.9%, thanks to major investments primarily in wind power, but also in solar cells. Although energy consumption has not fallen at the targeted rate during the year, it is reducing enough to meet the City of Malmö s overall objective for Another important aspect of developing Malmö as a climate-smart city is to adapt the city s structure to climate change. One of the ways this was done during the year is within the context of the Cloudburst Plan for Malmö. Put simply, the City s climate adaptation work is at an initial investigation and planning stage, but not many actual physical changes have yet been made. For Malmö to be a health-promoting city, there must also be good environments for recreation and outdoor activities. During the year, the City Planning Committee catalogued over a hundred green spaces detailed in the nature protection plan and drew up a proposal for a Plan for Malmö s green and blue environments. At the same time, the densification of the city represents a challenge in this area as the proportion of green spaces per resident falls. One way of rising to this challenge is through increased joint use and by using the city s green spaces in a smarter way. Both the Preschool Committee and the Compulsory Education Committee worked to develop their outdoor environments during the year, in part to tackle these challenges. Overall, follow-up indicates relatively good target achievement during the year, although the city council objective has not been fully achieved. 22

23 The changes made to the committee and administration organisation are of considerable significance to target achievement within A city with good work conditions and mean new conditions within several areas of activity and major occupational groups. The city has been given an organisation with more dedicated specialist committees and therefore greater opportunities to further develop activities and move towards the city council s objectives. A local action plan was drawn up in 2017 to increase the proportion of full-time employees and the proportion of staff working full-time. The proportion of full-time workers varies greatly between different occupations and areas of activity and the committees face different challenges. Separate committee-specific plans will be drawn up at the Health, Care and Social Care Committee, the Disability Support Committee and the Service Committee in 2018, although other committees will also be affected by the issue. The aim to increase the proportion of full-time workers is part of a national focus on securing long-term skills provision and on meeting future large-scale recruitment needs. The objectives of the committees and the companies provide good support for the city council objective and create the conditions for achieving the city council objective. The objectives of the new committees that were developed in 2017 have not resulted in any deviation from the previous assessment. An important factor within the target area is the particularly significant variation in the number of employees at the committees and companies, from fewer than 10 employees to almost 6,000. This variation in itself means there are different conditions for the work relating to the skills and work conditions of employees. Taking into account the lack of comparative figures and target values for some of the committee objectives, the overall picture is that just under half of the committee and company objectives have been achieved. This means that the city council objective has not been fully achieved. One important aspect is that many of the objectives are of a long-term nature. This is shown by the fact that several committees which have not achieved their objectives nevertheless report an improvement compared with the previous year. It can also be noted that many committees have set very ambitious targets, which means that a quick overview of results does not clearly reflect the positive hard work that has been carried out. This often involves changing long-term trends and the companies and committees have demonstrated a lot of activity and a high level of awareness here. As in previous years, skills provision remains a major challenge. Both the Preschool Committee and the Compulsory Education Committee have had to deal with a national shortage of qualified teachers. The Upper Secondary and Adult Education Committee also highlights this problem in terms of future skills provision within the committee s activity. The Health, Care and Social Care Committee reports increased competition within several qualified professions within care. This view is shared by the Disability Support Committee, which faces a challenge in recruiting certain occupational groups. The Labour Market and Social Welfare Committee is also seeing continued strong demand for skills within several of the committee s occupational categories. Among the companies, MKB Fastighets AB reports a labour shortage within the property industry. The municipality-wide working practice for skills provision that was introduced in 2016 provides the committees with greater opportunities to map their needs and produce action plans. The education committees are trying to handle the shortage of teachers using supplementary skills and this may possibly also be a route other committees can take. Generally speaking, there is a lot of activity at the committees and companies designed to make them attractive employers that can attract new employees and also retain and develop existing ones. One factor that can make skills provision more difficult is staff turnover that is far too high. There is no specific level that is good or bad and the level must instead be evaluated on the basis of the nature, needs and conditions of the activity. Staff turnover for the City of Malmö as a whole in 2017 was 12.5%. This was an increase of 0.5 percentage points compared with 2016, but the level varies greatly between areas of activity and occupational groups. It is possible that the reorganisation has contributed to an increase within some occupational groups, particularly where there is strong competition for labour. This trend requires 23

24 continued specific attention and adapted measures from the committees with regard to work environment and work conditions. Absence through illness at the City of Malmö in 2017 fell from 6.95% to 6.55%. This breaks a trend lasting several years of rising absence through illness. The trend varies, however, between the committees, with some recording a marginal increase and others seeing a fall, but not to the desired extent. Absence through illness also varies within the areas of activity, which makes it difficult to draw conclusions of a more general nature. The committees report different measures for reducing absence through illness, including increased leader density, close leadership, systematic work environment management and qualitative, effective rehabilitation processes. The focus for the target area stipulates that the committees must continue to concentrate on reducing the proportion of hourly paid hours. In 2017, the proportion fell by 0.1 percentage points to 5.0%. The Health, Care and Social Care Committee and the Preschool Committee have achieved their objectives with regard to hourly paid hours, while the Disability Support Committee sees a need for continued measures to reduce the proportion within the committee s activities. Many committees use HME (sustainable employee commitment) as part of the follow-up of their own objectives. HME is produced from an annual employee survey and is a good complement to other followup within the target area. The combination of HME and other follow-up methods is an exciting development area that can further enhance the analysis of different cohesive factors relating to work conditions and long-term skills provision. In summary, the assessment is that the city council objective has not been fully achieved, that there are relatively major challenges in terms of skills provision for example and that many of the committee and company objectives are of a long-term nature. 24

25 At the turn of the year 2017/2018, the total population of Malmö was 333,633. The figure at the previous turn of the year was 328,494, which means the population increased by 5,139 during This is a lower rate of increase compared with the previous year. In 2016, the population increased by 5,920. The population increase is partly explained by an excess of births of around 2,400. During the year, more than 5,000 children were born in Malmö and around 2,700 people died. The excess of births in 2017 is greater than in the previous year. Malmö s relatively young population means that the number of births can be expected to rise over the next few years. The number of women of childbearing age is a key factor in the birth rates. Another important explanation for the increase in population is immigration and emigration. During the year, 23,700 people moved to Malmö and 20,900 people moved away from the city, giving positive net migration of around 2,700 people. Net migration from abroad was around +4,000 people, while net migration with the rest of Sweden was around -1,200 people. The net migration from abroad of +4,000 is slightly lower than in the previous year but higher than in In total, around 7,800 people migrated to the city and around 3,800 migrated away during the year. The net migration from abroad in 2016 and 2017 is largely the effect of the high number of asylum seekers who arrived in 2015 and In 2017, Malmö received around 2,500 refugees from abroad. The arrival of asylum seekers will probably also have some effect during 2018, but total immigration is expected to fall in the future compared with 2016 and In its most recent forecasts, the Swedish Migration Agency has revised down the anticipated number of people to be received by the municipality for , but the figures are subject to great uncertainty. It is worth noting that asylum seekers are not included in the population statistics because people without a residence permit are not registered in the municipality in the national population register. Children seeking asylum are nevertheless entitled to preschool, school and many other municipal services, which makes this group interesting to follow. The number of asylum seekers in their own accommodation (EBL) in Malmö fell during the year from 2,800 to 2,200. The migration streams between Malmö and the rest of Sweden are significantly larger than the migration streams to and from abroad. In 2017, over 17,000 people migrated away from Malmö to the rest of Sweden, while just under 16,000 people migrated into the city from the rest of the country, giving negative net migration of 1,200. There is a general link between domestic migration and age: the migration streams to and from Malmö are largest in the age group (when people start working) and in the age group (when people are starting or have already started a family). The same patterns have been observed in Gothenburg and Stockholm for several decades. Overall, net migration in Malmö is negative for year-olds and positive for year-olds. There is also a link between the age group and the 0 2 age group. It is worth noting that people who have recently been granted a residence permit (within the first two years of having a residence permit) have a high level of mobility compared with the rest of the population. In 2017, 800 people in this group migrated from Malmö to other parts of the country. At the same time, 750 people in the same group migrated to Malmö from another municipality. Net migration for the group is therefore negative and has been for many years for Malmö. The net figure for the group is therefore so small that it does not significantly affect total net migration. This does indicate, however, that mobility within Sweden s borders will increase gradually over the next few years as this group grows in size. 25

26 The budget for 2017 was prepared on the basis of the population forecast completed in spring The table shows that deviations from budget within the different age groups were only relatively small. The number of residents is calculated as an average of the population at 31 December 2016 and 31 December RESIDENTS 2017 Outcome Budget Difference Under years years years years years years Total The number of residents of school-age (6 19 years old) was over 200 more than budgeted, while the number of older residents (over 65 years of age) was lower than budgeted. The number of younger pensioners aged was almost 200 fewer than budgeted, while the number of older pensioners was slightly more than budgeted. The and <1 age groups have less demand for municipal services, which is why the deviations in these age groups is less significant for activities and cost trends. 26

27 Important events in the committees activities that affected development during the year are described here. The net cost trend is also described. Net costs are the costs that are financed through taxes and general state subsidies and it is therefore important for the municipality to monitor these. On 1 May 2017, a new organisation was introduced in the City of Malmö, which resulted in the dissolution of the Social Resource Committee and the city district committees. The activities of these committees have been transferred to three new committees the Health, Care and Social Care Committee, the Disability Support Committee and the Labour Market and Social Welfare Committee as well as to the Culture Committee and the Leisure Committee. The labour market area has also been transferred from the Labour Market, Upper Secondary and Adult Education Committee to the Labour Market and Social Welfare Committee. At the same time, the Labour Market, Upper Secondary and Adult Education Committee changed its name to the Upper Secondary and Adult Education Committee. The aim of the reorganisation is to create a clear and stable organisation for welfare issues where resources and skills are used effectively in order to provide Malmö residents with good-quality initiatives of equal value. In 2017, there was a major consolidation of effort on safety and security issues. In the spring, the city council approved an investment of SEK 50 million for measures to increase safety, in relation to both the physical environment and social work. These measures included improved lighting and more extensive camera surveillance, as well as intensified crime prevention work in the form of preventive initiatives in schools and social services and increased investigation by the authorities of illegal clubs, for example. These have been implemented through broad-based cooperation between the City s administrations and will be reported on in a special report in spring The government has allocated funding for the launch of two new police training courses in Sweden. One of these contract courses will be situated in Malmö and is aimed to begin in This investment is expected to mean a lot for the city and is linked to a planned knowledge centre for preventive work in a collaboration between the City of Malmö, Malmö University and the police. The population trend in Malmö means there is a need for a developed infrastructure and more housing. Around 2,400 homes were completed in the city during the year, which is more than the estimated need, based on the population trend. Malmö has had a housing shortage for several years, however. Work has begun to develop a strategy for housing for the elderly. The aim of this strategy will be to provide more elderly with the opportunity to live independently and safely in ordinary accommodation, through measures such as innovations in the home and a more varied range of forms of accommodation. Sverigeförhandlingen (The National Negotiation on Housing and Infrastructure) was concluded during the year and an agreement on the City package for Malmö and neighbouring municipalities was signed between the Swedish government, Region Skåne and the City of Malmö. This means that the work is now moving from the negotiation phase to the implementation phase. The City package covers the expansion of the public transport network, as well as investments in cycling and housing. Program Lindängen is a project in which several of the City s administrations are involved. The aim is to improve living conditions for those who live in the area and to develop methods for managing investments that involve several stakeholders and initiatives. In January 2017, the city council adopted a programme for the City of Malmö s strategic work with its surroundings. The programme provides support for the strategic initiatives and activities of the administrations and forms a basis for the management and coordination of the City s collaborative platforms (such as MalmöLundregionen, Greater Copenhagen & Skåne Committee, etc.). Initiatives implemented within the context of the programme during the year included a preliminary study on opportunities to 27

28 establish public authorities in Malmö and the creation of a platform to pursue important issues for Malmö at national level. An inventory of the City of Malmö s work with various external meeting arenas (such as Almedalen and Kvalitetsmässan) was carried out during the year in order to increase coordination between these initiatives. In May 2017, the city council decided to establish a contact centre that will offer a way in to the municipality and provide help with such things as information, guidance and the handling of more basic matters. The Service Committee will operate the activities at the centre. On 1 May, a secretariat for sustainable development was established at the City Office. The secretariat works with a focus on development and on the surrounding area and pursues development work in collaboration with the City of Malmö s administrations and companies as well as with external stakeholders such as public authorities, business, academia and civil society. By taking up an active, developing and interdisciplinary role, the secretariat will support the administrations in important sustainability and innovation initiatives. The secretariat will also collect competitive intelligence in the field of sustainability. Procurement is a method that can be used to influence the development of ecological and social sustainability in the city. Development work is underway to introduce sustainability requirements in procurements, where an important first step has been to create a structure for identifying procurements where sustainability requirements can have a positive effect. The Technical Committee is responsible for monitoring the municipality s financial interests in city expansion, exercising the municipality s ownership of land to the extent this is not the responsibility of others, coordinating and implementing the new development of residential and commercial areas and performing the role of port owner for the city s ports. The committee has responsibility for the municipality s commercial and residential property management, for urban environments in terms of streets, meeting places, parks and beaches, for the transport system and transport environment, as well as for some of the city s events. Development activities include land for commercial use, housing and municipal services. Demand for land for commercial development has remained strong. During the year, buyers and developers were given access to municipal land that provides the opportunity to begin work on around 3,300 new workplaces, which exceeds the committee s target of at least 2,500 workplaces. The potential workplaces are mainly office workplaces close to stations. With regard to land for small industry, service and businesses that require large sites, the land set aside has all been allocated in principle and the committee highlights an urgent need for urban development plans for new areas to be drawn up as soon as possible. The forecast for 2018 shows that a number of urban development plans will be adopted during the year. The development of Norra hamnen has continued with the aim of creating opportunities to establish portrelated businesses, logistics and warehousing businesses, manufacturing industry and wind power. The production of new homes further accelerated during In total, on both private and municipal land, construction was begun on around 4,000 permanent homes, which is the highest level for many years. Normally, around half of all housing construction takes place on municipal land over the course of a business cycle. During the economic boom of recent years, more than half has taken place on private land and in 2017 the private proportion reached around 66%. Construction began on around 1,400 homes on municipal land, which exceeds the target of 1,300 homes. The proportion of tenant leasehold properties on municipal land is 56%, compared with the target of at least 50%. 28

29 Land for municipal service is regularly set aside in development projects. Two school sites and two preschool sites were made available during the period. Land has been secured for one school and two preschools through development contracts. There was expansion of public spaces in development areas and in existing housing developments during the year in areas such as Varvsstaden, Elinegård, Cementen, Industrigatan etapp 1, Nobeltorget and Kroksbäcksparken. Implementation work on the Continental Line continued during the year. During the year, an agreement was reached between the Swedish government, Region Skåne and the City of Malmö on the City package for Malmö and neighbouring municipalities. The agreement relates to the committee s area of responsibility and preparations began during the year with other affected administrations. The package includes eight lines for electrically operated bus services, as well as 14 cycle lane initiatives. The package also includes the Malmöpendeln line and measures for the Lommabanan railway. The committee s decision to introduce speed limits of 30 km/h outside all schools was implemented during the autumn. The investment in the summer pedestrianised street of Friisgatan was a success, with a more relaxed tempo and happier business owners. The city s air has become cleaner and the County Administrative Board has decided to end the programme of measures to deal with nitrogen dioxide in Malmö. The committee received additional funding for work on safety measures during the year. These measures included safety patrols, lighting, safer tunnels and operation and maintenance contracts. Work on vehicle towing has been expanded and the number of dishonestly registered vehicles has fallen as a result. Development work has taken place in recent years on municipality-wide strategic premises planning. It became clear during the year that the duties and powers of LiMas (Lokal i Malmö) need to be clarified and this will be done during The committee is responsible, on behalf of the ordering committee, for the acquisition of and administration of rent for premises and apartments for people for whom the municipality has a particular responsibility. Responsibility for the technical inspection of social housing apartments has been transferred to the Technical Committee as part of the reorganisation of the City of Malmö. The target for the acquisition of transitional apartments and for apartments being transferred to residents was achieved during the year. The process of merging the property office and the Streets and Parks Department to form a single administration by 1 July 2018 at the latest was ongoing during the year. The recruitment process for a joint head of department has been completed. The committee believes that a merger, and therefore a new organisation, will be able to improve the conditions in the long-term for good financial and operational management and create greater clarity and efficiency in the development process, as well as an increased consensus with regard to land use in the city. It is considered that the merger will have the desired effect from 2019 onwards. The administration of port facilities was transferred from the City Executive Board to the Technical Committee during the year. The transfer of the role of port owner aims to provide clarity in the relationship to the owner of usage rights, Copenhagen Malmö Port AB (CMP). The committee s investment activity covers investments in both non-current assets and development properties. The committee s gross investment volume for the year was SEK 459 million, which is SEK 450 million lower than the approved limit. The difference is largely explained by the postponement of a number of projects, as well as lower costs in some projects. 29

30 The committee s net costs, excluding port facilities and development and capital gains, were SEK 796 million, which is equivalent to an increase of SEK 61 million or 8% compared with This increase is primarily attributable to the costs of safety measures and staff costs relating to new activities for which the committee received an increased municipal contribution in 2017 and grants for public infrastructure in relation to the Continental Line project. The committee s net income for port facilities was SEK 18 million, compared with SEK 7 million for 2016, which is primarily attributable to increased revenue. The City Planning Committee s primary responsibility is to prepare, decide on and perform inspections in cases relating to planning and construction law. The committee is also responsible for housing adaptation and accessibility. The expansion of the city is enabled by the production and approval of urban development plans and planning permission. The committee writes that the year saw a record number of applications for urban development plans and the number of urban development plans approved allows for around 3,600 homes, 1,500 preschool places and 2,900 compulsory school places. All levels are above the committee s targets for the year. The total number of planning permission cases increased slightly compared with the previous year. Planning permission was granted for almost 5,000 homes, as well as for 600 compulsory school places and 800 preschool places. During the year, the administration launched a far-reaching development initiative that involves drawing up a plan for more coordinated working in its processes and exploiting the opportunities of digitisation. The aim is to make the business systems better able to meet the needs of the activity and customers. Digital planning permission management was launched during the year. Malmö s current master plan was approved by the city council in Under planning and construction law, the city council must examine whether the master plan is still appropriate at least once during each mandate period. Consultations and exhibitions were held for Master Plan for Malmö during the year, which also includes proposals for housing policy targets. This work was based on the assumption that the existing master plan still largely applies and that the underlying principles and focus areas remain the same. All parts of the master plan have been updated, however, on the basis of changed conditions, work in progress and work that has been approved to commence, as well as views from the consultations and exhibitions. Adoption plans were discussed by the committee during January Malmö City of Architecture, which is a thematic addition to Master Plan for Malmö, was exhibited during the year and the committee writes that the aim is that the document can be discussed by the city council in The work to draw up the Action plan for the supply of housing was concluded during the year. The action plan will secure volume and breadth in house-building and meet the needs of particularly vulnerable groups on the housing market in Malmö. The plan will be discussed by the city council. The Amiralsstaden project was launched during the year. Amiralsstaden is an urban development process that is centred geographically around the future Rosengård station. The ambition of the process is in line with the recommendations of the Commission for a socially sustainable Malmö to work on the basis of social investment in knowledge alliances, in other words utilising the experiences of different people and stakeholders and achieving change through dialogue and cooperation. During the year, an agreement was reached between the Swedish government, Region Skåne and the City of Malmö on the City package for Malmö and neighbouring municipalities. The agreement relates to the committee s area of responsibility and preparations began during the year with other affected 30

31 administrations. The package includes investments in urban bus services, Pågatåg train services and cycle infrastructure, as well as 28,550 homes. With regard to housing adaptation, the focus during the year has been on shortening waiting lists and on applicants receiving a decision on adaptation at an early stage. This work has gone very well and the target of all cases being begun within two months has been achieved. The committee has received funding from the city council s safety initiative to improve supervision in accordance with building legislation. The focus will be on investigating illegally built homes and businesses. The committee s total net costs for the city planning office and housing adaptation grants were SEK 84 million, which is SEK 4 million or 5% higher than the previous year. This increase is primarily the result of increased costs for staff and special investigations, which are offset to a certain extent by increased income for planning permission, among other things. The Service Committee provides services to the City of Malmö s administrations and municipal companies. The committee is responsible for the administration and construction of municipal properties, for the production of renewable energy and for the exercising of public authority and administration of community transport and national community transport. The city council has decided to establish a municipality-wide contact centre, which the Service Committee will be tasked with operating. The contact centre will offer a way in for Malmö residents and others who use the municipality s services. Since the decision was made, an implementation project has been initiated by the Service department and the City Office. Areas covered by the project include premises, technology, staffing and training. The committee has been commissioned to investigate the possibility of starting up small-scale laundries within the City of Malmö. The aim is to handle one tonne of laundry per day for work clothing within the Health, Care and Social Care Committee and the Disability Support Committee. The investigation has been completed and proposals sent to the affected committees for comment. Change and development work is underway in relation to school canteens aimed at, among other things, keeping up with the future expansion rate of the city s schools and the resulting increase in meal volumes, staff numbers and kitchens. The City of Malmö is growing rapidly and the committee writes that it is a challenge to be cost-effective while the demand for functions and completion times is increasing, for example in relation to the expansion of preschools and compulsory schools. The increased number of orders received places greater demands on cooperation between the technical administrations. Two compulsory schools, with sports halls, were completed during the year and the redevelopment and extension of three compulsory schools was also completed, resulting in around 1,500 places 2. Preschool activity was expanded with seven new preschools covering 45 departments. A number of projects are underway for the expansion of compulsory schools and preschools and these are expected to be completed during Soltofta retirement home, with 72 apartments, has been completed. The Marine Education Centre and the façade work on City Hall are other projects that have been completed. 2 Includes the projects completed by the Service Committee during the year. 31

32 The administration has received an order for the completion of apartments for individuals with a permanent residence permit. This accommodation is expected to be ready during 2018 and will be modular housing located in the Blombuketten district and at Kirsebergs IP. The committee s gross investment volume for the year was SEK 1,489 million, which is more than SEK 400 million lower than the approved investment limit. This outcome is the result of several factors, such as projects being both brought forward and pushed back and some projects becoming cheaper while others became more expensive. The committee s net income in 2017 was SEK 332 million, which is an increase of SEK 33 million or 11% compared with This increase is the result, among other things, of lower interest expenses thanks to favourable interest rates, as well as increased rental income. The activities of the Environment Committee are governed by a number of laws and regulations. The committee is required to ensure compliance with these. The committee also implements preventive measures within its area of responsibility and leads and coordinates the work carried out under the City of Malmö s environmental programme. The committee is also responsible for the municipality s consumer guidance and energy advice. In 2017, a new chemicals plan with a focus on children and young people was adopted and begun to be implemented. The Environment Committee has also coordinated the City s safety initiatives within the focused monitoring work, called Safer Malmö. The results show that it is highly effective to combine and coordinate several authority initiatives in order to deal with problems such as illegal clubs, food fraud, illegal accommodation and illegal activities in the vehicle industry. This cooperation has led to the enforced closure of a large number of activities. In 2017, there were 2,600 registered food businesses in Malmö. Over 3,300 food inspections were carried out at these, divided into just under 2,900 scheduled inspections and just over 500 follow-up inspections or inspections linked to events such as reports of food poisoning. Environmental aspects were also integrated in the work and the businesses are continuously informed of how they can contribute to sustainable development. Net costs were SEK 68 million, which is an increase of SEK 2 million or 3% compared with the previous year. This increase is primarily because the committee received an increased municipal contribution of just under SEK 3 million for measures to increase safety. At the same time, budget and rent advice was transferred to the Labour Market and Social Welfare Committee in May 2017, resulting in a reduction in net costs of just under SEK 3 million. Demographic changes mean that the number of children and students continues to increase strongly, particularly with regard to compulsory school activity, which is in a period of expansion. Continuous adaption of the activity to the changing conditions is a permanent challenge for the educational activities. The strong expansion involves a continued major focus on access to suitable premises and skills provision. The lack of teaching staff has led to the implementation of initiatives to attract new and retain existing employees and also to develop alternative solutions. The increased need for premises means there is a greater need for cost control and cost-effective solutions. A large number of development initiatives are underway in preschools and schools in order to attain higher target achievement and equality. Follow-up of the students knowledge outcomes is used, among other things, as a basis for identifying development areas. Other activities that are regularly carried out in order to 32

33 develop the activity include quality/development visits, quality dialogues and surveys of legal guardians, students and staff. In addition, a number of major changes were carried out or begun during the year. The Preschool Committee, for example, set aside time for activity development for each individual employee and the Compulsory Education Committee launched a large development project in the autumn, which is based on Swedish and international research. The Swedish Schools Inspectorate s regular inspection of educational activities in the City of Malmö that began in autumn 2016 has now been completed. The inspection takes place every three years and is the government s way of ensuring that school activities comply with laws and regulations. By extension, it helps to ensure every student s right to a good education and a safe environment. The inspection provides an important basis for the committee s ongoing quality work. In October, there were 222 municipal preschools 3 and 77 independent preschools in Malmö. New preschools have been added during the year, while others have been closed down or merged. New preschools are usually larger than those which are closed down, which provides greater access to places despite a reduced number of preschools. Pedagogical care was provided by six childminders under municipal management and 40 under private management. There were also nine open preschools in the municipality during the year. The net costs of the preschool activity for the year were SEK 2,719 million. Compared with 2016, this is an increase of SEK 111 million or 4.2%. An increase in the number of children with a preschool place accounts for 1.7% of the rise in costs. Otherwise, the increase is mainly the result of higher salaries and prices. The Preschool Committee s net cost per child in preschool activity is approximately SEK 132,000 for The Preschool Committee received around SEK 130 million in targeted state subsidies during the year. The largest state subsidies are a subsidy because the City of Malmö applies a maximum charge (SEK 66 million) and a subsidy for smaller groups of children (SEK 32 million). The state subsidy for smaller groups of children is used to reduce the size of groups or to prevent an increase in the size of groups of children. Ten new municipal preschools opened in 2017, which is equivalent to 1,100 places. Other than temporary places, there were closures equivalent to approximately 500 places. There was a net increase of just over 600 preschool places. The Preschool Committee considers that the capacity of premises should also be adequate for The number of preschool age children in Malmö continues to rise, albeit at a slightly slower rate than before. During the year, around 20,600 children had a place at preschool or in pedagogical care. This is just over 300 more than the previous year. This increase took place across both municipal and independent activities. The number of children on the waiting list fell slightly in 2017 and the average for the year 3 There are fewer municipal preschools than in the previous year, which is largely the result of a change to the definition bus departments, outdoor departments and some special departments are no longer classed as separate preschools. 33

34 was 175 children. All children have been offered a place within the mandatory time frame. Demand for preschool places is seasonal and is at its greatest in the spring. At the end of May, there were around 21,600 children enrolled in the activity. Temporary departments, special spring preschools and the introduction of flexible start dates have enabled demand to be met. The proportion of children in the population seeking a place continues to rise and a high proportion of children are seeking full-time places. Increasing the proportion of children who participate in preschool activity is part of the work to achieve a socially sustainable Malmö. During the year, 89.4% applied for a place in preschool activity. This is an increase of 0.6 percentage points on the previous year. PRESCHOOL AND PEDAGOGICAL CARE Change Total number of children enrolled Demand fulfilment 99,2% 99,0% 0,2% Demand 89,4% 88,8% 0,6% Proportion of children with a fulltime place Proportion of children in independent activities 96,1% 96,0% 0,1% 15,1% 14,7% 0,4% The development of the best preschool for children has been the central focus for the Preschool Committee during the year. Work has continued in order to meet the challenges in terms of equality, quality and skills. Guidelines on time for activity development were established during the year. The guidelines are governed by collective agreement and stipulate the minimum amount of time each individual employee at the municipality s preschools must set aside for activity development. In the spring, the Swedish Schools Inspectorate completed its inspection of the responsibility taken for preschools in the City of Malmö by the accountable authority. The assessment of the Swedish Schools Inspectorate is that the City of Malmö performs well-functioning work with regard to both conditions for education at preschool and the development of education at preschool. Preschool activity in the City of Malmö is one of the trial activities in the government-appointed Trust Delegation 4, which examines how trust-based management can create more efficient activities with greater benefit and quality for local residents. The aim is to produce good examples for development work. One of these is the quality model developed at the City of Malmö s preschool activity. Based on the recommendations of the Malmö Commission to reduce differences in health among Malmö residents, there is an intention to establish more family centres. During the year, a letter of intent was drawn up between the Preschool Committee, the Labour Market and Social Welfare Committee and Region Skåne. Work is also ongoing to develop the forms and activities of open preschools. The time that children actually spend at preschool is a key factor in the planning of the educational activity. Development work has begun to enable attendance hours to be monitored systematically and digitally. Measures are ongoing to secure skills provision and increase the skills of employees who lack formal education. These include the development of a training plan for childcare professionals whereby around 300 employees each year will be offered internal five-day basic training and 120 employees each year will be offered contract education one day a week for one year, which provides a formal qualification as a childcare professional. The Transition Fund 5 is contributing SEK 7.5 million in funding over three years. 4 In June 2016, the government appointed a state commission the Trust Delegation which will run trial activities and gradually propose new management models for the public sector. The aim is for the management of public administrations to be based on trust to a greater extent. The final report will be submitted to the government in June The Transition Fund is backed by the Swedish Association of Local Authorities and Regions, the Pacta Employers Association, as well as the Swedish Municipal Workers Union, OFR s association areas and AkademikerAlliansen. 34

35 The compulsory school activity includes preschool classes, compulsory school, compulsory special needs school, wraparound care centres, pedagogical care and open leisure activities for schoolchildren. At the end of 2017, there were 75 municipal schools in Malmö, including one school with an international focus and one reception school (Mosaik), as well as 27 independent compulsory schools. The total net cost for compulsory school activity during the year was SEK 3,936 million, which is an increase of SEK 305 million or 8.4% compared with This increase in costs, which is three percentage points lower than last year, is mainly the result of an increased number of students and higher prices and salaries. There were just under 5% more students in both compulsory school and wraparound care compared with the previous year. The Compulsory Education Committee s net costs per student at compulsory school were an average of SEK 98,780 in 2017, which is an increase of 2.6% compared with the previous year. Salary increases for teachers remain at a high level, while rental costs for newly opened schools were lower than anticipated. Targeted state subsidies are helping to finance an increasingly large portion of compulsory school and wraparound care activities. The Compulsory Education Committee received around SEK 290 million in subsidies during the year. Of the state subsidies, funding has been approved for improving staffing in the amount of approximately SEK 100 million via the Lågstadiesatsningen (SEK 87 million), Fritidshemssatsningen (SEK 15 million) and improving staffing in school libraries. These investments in improving staffing are conditional on staffing levels increasing, otherwise these must be repaid. State subsidies have also funded higher teacher s salaries in the amount of approximately SEK 70 million through the state subsidies Lärarlönelyftet and Karriärtjänster. The Compulsory Education Committee has received SEK 50 million for asylum seekers and newly arrived students, among other things for the education of asylum seekers children and as compensation for large-scale reception during There were just under 35,000 students at compulsory school during the year, which is an increase of around 1,600 students compared with the previous year. The diagram shows that the number of students since 2010 has increased by around 8,000. The largest increase was in 2016, when the number of students increased by almost 1,900. Alongside ordinary population changes, a large number of newly arrived students were also received by the schools. This also meant that municipal schools that are not directly intended for newly arrived students, such as the Reception School and the International School, had on average around 7% newly arrived students at the end of The ratios vary at different schools and the school with the largest proportion (other than the specifically intended schools) had 18% newly arrived students. The number of students is rising at all types of school, as can be seen from the table. This increase has taken place at both municipal and independent schools. The proportion of students at independent schools has remained relatively constant in recent years. Around 5,600 students chose to attend an independent school and around 300 students attend a school in a different municipality. COMPULSORY SCHOOL STUDENTS Number of students in preschool class Number of students in compulsory school Number of students in special needs school Change Total Proportion in independent activities 15,9% 16,0% -0,1% 35

36 In order to accommodate the increased number of students, around 1,700 new school places were created during the year. These places were added through the opening of Gottorpskolan and Hyllievångsskolan, through the redevelopment of Risebergaskolan and by increasing numbers at existing schools. Redevelopments also began during 2017 in order to improve the air quality in schools in accordance with current authority requirements. This has meant relocating students to other schools. As the number of schoolchildren increases, so the number of children in wraparound care also continues to rise. On average, around 16,400 children were enrolled in wraparound care during the year. This is an increase of approximately 800 children compared with the previous year. Around 63% of schoolchildren in the 6 12 age group apply for a place in wraparound care. Demand has remained unchanged in recent years. The proportion of students who attended a municipal or independent school in Malmö and who left compulsory school in the spring term of 2017 and were eligible to apply for a national programme at upper secondary school was one percentage point lower than the previous year. Of those students who left school in the spring term of 2017, 76% were eligible for a vocational programme at upper secondary school. The outcome varies greatly by gender (girls 80%, boys 73%) and by school (from around 32% to 100%). As at national level, in Malmö there is particularly low target achievement in mathematics and in Swedish as a foreign language, as can be seen in the grades achieved. Of those children who attended municipal schools, around 9% lacked a pass in only one subject required to achieve basic eligibility for secondary school. Mathematics was the subject in which most students lacked a pass. Students have been able to supplement their grades after leaving school through summer school 6 and assessment. Summer school at the municipal schools resulted in a further 1% of students achieving eligibility for secondary school. The average merit rating for students at Malmö s schools fell by five percentage points to (max. 340) and is now around two percentage points lower than the national average. This result is affected by, among other things, a high proportion of newly arrived students. The Swedish Schools Inspectorate s inspection was concluded in December. All measures taken in connection with the report of the Swedish Schools Inspectorate have been approved. The Compulsory Education Committee initiated a large development project in the autumn. The aim is to use an improved and more extensive control and management system to create more equal schools with higher target achievement, in other words the best school for every student. This development work is based on Swedish and international research. The increased number of students in Malmö means there is a need to employ more teachers. At the same time, there is a shortage of qualified teachers both locally and nationally. In order to attract, develop and retain employees, a large number of initiatives have been implemented within skills development, salary progression, senior teachers and in creating new career opportunities. New skills, such as teaching assistants and student coordinators, have been added. These aim to free up time for teachers so that they can devote themselves to their main task, teaching. 6 Since 1 August 2017, accountable authorities have been required to offer summer school to those students who have completed Year 8 and risk not being eligible for a national vocational programme at upper secondary school in Year 9. The same applies to those students who have completed Year 9 without becoming eligible for a national vocational programme. 36

37 The Upper Secondary and Adult Education Committee is responsible for upper secondary schools, upper secondary special needs schools, municipal adult education, special education for adults and Swedish for immigrants. From 1 May, responsibility for the labour market area has been transferred to the newly formed Labour Market and Social Welfare Committee. The committee decided during the year on a new future organisation of programmes at upper secondary schools and upper secondary special needs schools. The starting point is to develop and strengthen profiling at school level and to enhance the vocational programmes and increase the number of applicants. This change will also provide the conditions for improved quality, target achievement and completion rates. The decision also includes combined adult education in the Margareta district, which is possible through relocation within existing premises. The Swedish Schools Inspectorate s inspection of the committee s activities was concluded during the spring. A number of shortcomings were subsequently remedied. Those that remain include developing study supervision in the student s mother tongue. This is being developed digitally and will be widely offered across the organisation during Work is also ongoing to develop follow-up of the results of the introduction programmes and of upper secondary special needs schools, as well as to enhance quality work. The inspection showed that Swedish for immigrants, SFI, was not offered within the mandatory time frame. The number of people waiting for SFI who have waited more than three months fell, however. In December, there were 1,050 people on the waiting list, of which 70 had been waiting for longer than three months. Net costs for the year were SEK 1,642 million, which is a fall of SEK 48 million compared with the previous year. This reduction is primarily the result of the costs for the labour market area only being included up to and including April The committee received a total of SEK 120 million in targeted state subsidies during the year. Targeted state subsidies represent a relatively large portion of the funding for adult education and are therefore of great significance in terms of the ability to provide municipal adult education at upper secondary level. Since January 2017, the majority of targeted state subsidies for adult education must be applied for jointly by at least three municipalities. Malmö has therefore applied for state subsidies together with 11 other municipalities in south-west Skåne. Malmö has also applied as an individual municipality for state subsidies for education combined with trainee jobs as well as education for temporary employees within healthcare or elderly care. In addition to state subsidies for adult education, the committee has received state subsidies for initiatives such as Lärarlönelyftet, Karriärtjänster and for asylum seekers. The number of students at upper secondary school who are registered in Malmö in the national population register is at the same level as in The number of students at upper secondary school during the year was approximately 9,500, an increase of 70 from the previous year. The change in student numbers since 2010 is shown in the chart. Around 53% of students at upper secondary school received tuition at schools operated by the municipality, which is almost two percentage points lower than the previous year. Instead, around 200 more students attended independent schools or schools in other municipalities, which means that there are now approximately 4,400 students attending an independent 37

38 school or a school in another municipality. The number of students at upper secondary special needs school is 199, which is 13 fewer than the previous year. The proportion of students achieving eligibility and qualifications within four years 7 is increasing. Of the students registered in Malmö in the national population register who have attended a university preparatory programme at upper secondary school, 76% achieved eligibility for university and college within four years. This is an increase of two percentage points on the previous year, but is lower than the national figure (81%). Of the students registered in Malmö in the national population register who have attended a vocational programme, 63% have received a qualification within four years. This is an increase of six percentage points on the previous year, but is still lower than the national figure (75%). As at compulsory school, girls achieve better results than boys. Young people under 20 years of age who are not pursuing or have completed education on national programmes at upper secondary school, upper secondary special needs schools or equivalent education will be tracked in accordance with the municipal activity responsibility, KAA. It is the responsibility of the home municipality to offer suitable individual measures to those young people affected. The measures must in the first instance aim to motivate the individual to begin or resume their education. UngMalmö contacts young people and supports them with guidance. During the year, an average of 1,300 young people were registered as part of KAA, of which around 44% were female and 56% male. This is the same level as the previous year. The chart shows that the number of students at Malmö s municipal upper secondary schools continues to fall. The number of students during the year was approximately 6,300, which is a fall of 160 compared with Most of this is accounted for by a reduction in the number of students on the introduction programme. Of the students at Malmö s municipal upper secondary schools, 59% attended a university preparatory programme during the year, 15% attended a vocational programme and 22% attended an introduction programme. The number of students on an introduction programme at municipal schools is now around 1,400. A shortage of applicants meant that fewer vocational programmes began in the spring term As a result, the introduction programmes linked to these were unable to accept students either. Instead, independent upper secondary schools accepted more students than before. Adult education represents an opportunity for more Malmö residents to take the growing number of jobs in the city. The number of places has increased, both at basic and upper secondary level. There were around 3,000 annual places for municipal adult education at upper secondary school level during the year, which is an increase of 900 on the previous year. The number of flexible solutions within adult education was increased during the year. A large degree of flexibility in terms of the form and pace of study is particularly valuable for adults who work and study at the same time. 7 Statistics Sweden/Kolada statistical database 38

39 The number of study places on Swedish for immigrants, SFI, has increased by around 200 from the previous year. Of the 4,600 or so annual places for SFI, 57% were at folk high school or other external education providers. At the turn of the year, legislation relating to the right to municipal adult education at upper secondary level was expanded. This means that people who are not eligible for college/university or vocational college have a right to education in order to achieve such eligibility. Certain adjustments have been made to the range of adult education offered in order to satisfy demand. A new form of financial aid was introduced in July for certain unemployed people who choose to study at basic or upper secondary level at komvux or folk high school. The aim of study start aid is to motivate more adults to participate in education. This aid has so far only been used to a small extent and therefore has not had any direct impact on the activity. The Culture Committee already had responsibility for the city s museums, exhibition hall, culture school, city library, city archive and more. Since 1 May, all 11 local libraries and the meeting places Ungdomens Hus, Arena 305, Kajplats 305, ReTuren (Lindgården), Kirsebergs fritids- och kulturhus and the multi-activity buildings at Hermodsdal and Lindängen have also come under the Culture Committee s area of responsibility. Malmö city theatre and concert activities at Malmö Live are operated through companies. The Culture Committee s net costs during the year were SEK 444 million, which was an increase of 16%, or SEK 62 million, compared with The strong increase is mainly the result of activities being taken over from the former city districts during the spring. The city s cultural institutions welcomed high visitor numbers during the year. The number of journeys made on the culture buses also increased strongly during the year. There is strong interest from preschools and schools in visiting the culture administration s NUMBER OF VISITORS institutions. There was a visitor record at Malmö Museums (including Malmö Art Museum) of almost 450,000 visitors. Malmö City Library is now approaching one million visitors per year Change Malmö City Library Malmö Museums Malmö Exhibition Hall Malmö City Archive Malmö culture school has increased the number of student places by 134 to over 4,000. There has also been a large increase in the number of students participating in the Pröva på-verksamheten sampler activity and the Tvåornas kör choir. The culture school has broadened its range with courses that combine art forms. The Musical course (song, theatre, dance) had its first performance during the year. During the summer, Sommarscen Malmö had 156 performances with approximately 61,000 visitors at 48 locations around the city. Ten of the venues were completely new, such as the engine sheds at Kirseberg, the backyard of the chocolate factory, Käglinge recreation area and Cronhielmsparken in Rosengård. For children in the 6 15 age group, there was also a summer holiday programme with 150 free activities, which was made possible with the help of state subsidies. The Marine Education Centre was opened at Ribersborgsstranden in the autumn, a new activity in the city of Malmö. The centre is a meeting place for greater knowledge and understanding of the sea and the rich flora and fauna of Öresund. 39

40 During the autumn, the Swedish government decided that the City of Malmö would receive SEK 5 million per year to continue work on the Movements Museum, a new national museum of democracy and migration. The idea behind the Movements Museum is to create a locally based museum in Malmö with a national mandate and an international standing. The proposed museum will be unique, as there is no other museum in Sweden or the world that brings together the areas of democracy, social movements and migration. During the year, it was established that the Science Centre at Malmö Museums would receive SEK 20 million from Knut och Alice Wallenbergs stiftelse for visualisation technology in a future domed theatre, Wisdome. The intention is to create by 2019 an innovative meeting place for the visualisation of science in Malmö for schoolchildren, students, researchers, business and the general public. One of the aims is to increase the interest of children and young people in science and instil in them a curiosity to explore the world. The Leisure Committee is already responsible for the running of larger sports, swimming and leisure facilities, general association services and association grants, except where responsibility lies with other committees, as well as larger sporting and leisure events. Following the reorganisation in the spring, the committee is also responsible for youth recreation centres and meeting places for children and young people, except where responsibility lies with other committees. The change in the committee s area of responsibility means better conditions for strengthening work on the growth conditions of children and young people and creating equal access to leisure activities within the city. The Leisure Committee s net costs for 2017 were SEK 502 million, which was an increase of 14%, or SEK 61 million, compared with This large increase is mainly the result of responsibility for open leisure activities being taken over from the city districts during the spring. A number of activities during the year aim to increase accessibility to different types of leisure activities. One of these was the establishment of the Leisure Bank, which provides the opportunity to borrow leisure equipment free of charge. A number of events were held to collect equipment and the bank has been set up at the Urban Centre in the Kampen district. Two new sports halls were also opened during the year. One, Hyllievångs sports hall, has been provided with specialist equipment to meet the needs of gymnastics associations. The sport of gymnastics is growing steadily and attracting many children and young people, particularly girls. Several activities were also carried out during the year within swimming, recreation, spontan-i-stan and holiday activities with a specific focus on girls. Targeted event subsidies also created the conditions for involving more girls in leisure activities during the year. As a further initiative to stimulate the increased participation of more girls in leisure activities, the Leisure Committee decided in the autumn to increase the level of activity support for the target group by 10% from 1 January A new agreement was signed with the Sports Association for the Disabled (FIFH) 8. In connection with this, the FIFH hall was inspected and made accessible and an operating agreement with the association has been drawn up. The dialogue with Malmö s clubs and associations was also intensified during the year. Initiatives included the establishment of another new forum for dialogue, Samrådsgruppen. The work to provide summer holiday activities free of charge was expanded in 2017 and the Leisure Committee received a state subsidy of SEK 13.5 million for this. One specific initiative was the extra summer swimming lessons provided at Rosengårdsbadet and Hylliebadet. 8 FIFH Malmö is one of the largest parasport associations in Europe. 40

41 One of the year s most visible environmental measures was the hybrid grass matting that arrived in the Stadionområdet area. Artificial grass pitches are very important for year-round football activities but their environmental impact in terms of spreading microplastics in nature is a worrying environmental consequence. Hybrid grass mats containing the largest possible proportion of natural grass may be one of the solutions in finding alternative materials that meet football s needs. Individual and family care covers social work under the Social Services Act (SoL) with regard to initiatives for children, young people, families and substance abusers, as well as economic assistance, but also the Care of Abusers (Special Provisions) Act (LVM), the Care of Young Persons (Special Provisions) Act (LVU) and the Children and Parents Code. As a result of the reorganisation and the redistribution of activities that have taken place, it is not meaningful to examine the net cost trend for the affected activities in this report, as the net costs after reorganisation are not comparable with the net costs before reorganisation. The number of applications and reports to social services relating to children and young people increased by 7.5% compared with Aside from the rise in the population 9, the reason for this increase is that more reports have been received as a result of initiatives from social services. Of all the applications and reports received, 60% related to boys and 40% to girls, with an increase of 9% in relation to boys and 5% in relation to girls. The reasons for applications and reports with the largest increase are lack of care, children in a environment where they are at risk and suspected criminality. Converted into annual placements, the number of placements at homes for care and accommodation (HVB) at institutions and in family homes increased by 4.8% compared with 2016 and the total net cost increased by 13% to SEK 253 million. The cost increase was the result of a general increase in day rates, an increased number of placements under LVU and increased use of consultantsupported emergency and family homes with high or very high day rates. Placements were also made for more children and young people with extensive or complex needs that require longer and more expensive placements. Fewer children and young people were placed compared with 2016, but they were placed for a longer period. The trend during the year of disturbances and violence in several residential areas has once again emphasised the need for preventive fieldwork. To ensure that young people in Malmö have equal access to initiatives and support, fieldwork needs to be coordinated and cooperation with the police developed further. The number of people abandoning a criminal lifestyle has increased, which is a positive development. Several of social services activities have introduced or worked to increase the use of video links, the aims of which include enabling more frequent contact and greater participation with children and parents. Video links have been used as a way of having regular contact with children and young people placed further away 9 The population in the 0 18 age group increased by around 2.5%. 41

42 from Malmö and also as a way of having more frequent contact with parents who live a long way from Malmö. Reduced reception of unaccompanied children and young people meant that five HVB 10 homes for the target group were closed down during the year. Changes to the government s compensation system for municipalities in relation to unaccompanied children and young people applied from the second half of the year onwards, resulting in lower levels of compensation. A planned adjustment was therefore made during the year in order to maintain quality and streamline housing activities. The number of investigations and the number of ongoing initiatives within substance abuse and dependence care in the City of Malmö has remained at roughly the same level in recent years. The number of placements in support accommodation has increased, however, and there are no indications that this will fall in the near future. Social services are also seeing an increase in tablet abuse, particularly among youths and young adults. Converted into annual placements, the number of placements at homes for care and accommodation (HVB) at institutions and in family homes increased by 10.6%, from 158 to 175, compared with Costs also increased by around 10% and amounted to SEK 98 million in During 2017, the City of Malmö and Region Skåne drew up a Local agreement on coordination of cooperation between Region Skåne and the City of Malmö in relation to people with substance abuse and dependence problems, which is based on the regional agreement adopted in The agreement establishes the parties joint intention to carry out and develop coordination and cooperation between the activities of the City of Malmö and of Region Skåne aimed at the target group. Malmö residents with substance abuse and/or dependence problems often need help in several different areas of life. The target group often comes under the category of comorbidity, which means that alongside substance abuse or dependence they also show signs of mental illness. It is a challenge to establish a coherent care chain for this target group because they have complex care needs that require the coordination of several different parties. Housing and employment are a key part of the process of becoming free from substance abuse or dependence. To this end, in 2017 a new collaborative structure was developed between the Labour Market and Social Welfare Committee and the Disability Support Committee. Housing for the homeless includes accommodation in apartments that the municipality sublets, accommodation at hotels, apartment hotels, hostels, camping cottages and similar, as well as accommodation with more extensive supervision and assistance for residents. On average, more than 5,100 people received assistance with housing every day. Net costs for housing for the homeless increased by 26% compared with 2016 and amounted to SEK 488 million. The cost increase was greater than the increase in the number of housing days, which rose by 11%. The reason why costs are increasing more than the number of housing days is that households on average are receiving assistance with housing initiatives over longer periods, while the inflow of households needing assistance has reduced slightly. The largest increase in the number of housing days was in the more 10 Homes for care and accommodation (HVB) 42

43 expensive emergency and temporary forms of accommodation, such as hotels, hostels and other short-term solutions. The average accommodation period at hotels, for example, increased from 62 days to 106 days. As well as being expensive, these housing solutions are generally worse from a social perspective, particularly for families with children. An annual homelessness survey is carried out in Malmö at the beginning of October. This survey provides a basis for planning the municipality s homelessness work and is also a tool for monitoring homelessness work in the City of Malmö. The year s survey showed that the total number of homeless adults was 1,752, which was 12 more than in Among adults, 69% were considered to be homeless for structural reasons, which means that their main problem is that they do not have a place to live and that there is no known individual problem, such as substance abuse or mental health problems. The number of children in homeless households increased by 20% to 1,070. Among children, 98% are in the group that is homeless for structural reasons. The homelessness survey does not include accommodation in apartments which the municipality sublets. During the year, the Labour Market and Social Welfare Committee has worked to improve processes to ensure that the child s perspective is taken into account in case handling and a check list has been drawn up indicating quality requirements that must be met in the accommodation that is arranged for homeless families. The municipality has administered over 1,300 apartments for subletting to homeless people, of which 750 are transitional apartments where the aim is for the subtenant, with support from social services, to be able to take over the main tenancy. In total, 196 tenancy agreements were able to be transferred from the municipality to the subtenant. During the year, the municipality acquired 251 transitional apartments. During 2018, the Labour Market and Social Welfare Committee will strengthen its social work, primarily in terms of increased quality and frequency of follow-ups of households in emergency and temporary accommodation. This is expected to lead to reduced homelessness and more transfers of main tenancy agreements. A common booking centre will be established. The booking centre will be responsible for booking emergency and temporary accommodation and accommodation in the municipality s temporary apartments as well as for access to and quality assurance of rented emergency accommodation. At the same time, a central housing advice office is planned which aims to prevent households becoming homeless and to support homeless households in finding a home more quickly. 43

44 Economic assistance is the work of social services to help people so that they are able to provide for themselves. The number of households that applied for and were granted economic assistance increased for several years in a row, but this trend was broken in The number of households receiving assistance continued to fall in In total, 15,500 different households were granted economic assistance at some point during the year. Every month, an average of 9,700 households received economic assistance, just over a third of which were households with children. The proportion of households with children has fallen slightly in recent years. Despite the reduction in the number of households, the municipality s total costs rose slightly, from SEK 971 million to SEK 988 million (+1.8%). This increase was the result of higher average disbursements to households because of an increase in the national allowance and higher rents. Many households have been receiving economic assistance for a long time. Of all households with economic assistance during December 2017, more than 5,300 households, or 54%, had been receiving assistance for longer than two years 11. Households with long assistance periods increased slightly during the year, with the largest increase among households with single women, and there were children in over a third of these households. The gender distribution among households was largely even, but the trend is that the proportion of households with women is increasing. The Labour Market and Social Welfare Committee finds in its annual analysis that work is required in order to increase the number of women who are able to support themselves. Households with children have been a prioritised group in recent years in the work to reduce the need for economic assistance. Through the work now being done within the context of Hela familjen 2.0, families with children that have a long-term need for economic support can be offered better help to move towards providing for themselves. An increase in staffing levels enables more structured work to be done, including 11 For the assistance period to be classed as continuous, the household must not have had more than two months break from receiving payments. 44

45 investigations using a standardised assessment method (Förutsättningar Inför Arbete, FIA), more frequent follow-ups, practical social work and active collaboration. During the year, the Labour Market and Social Welfare Committee developed the digital service Mitt försörjningsstöd. The aim of the service is to make it easier for users to obtain information while at the same time reducing the workload of social workers, who need to spend less time answering individual questions. Within the healthcare and social care activity, support and assistance is provided to the elderly and people with disabilities. Elderly care includes home care, short-term care, retirement homes and meeting places for the elderly. Social care for people with disabilities includes, for example, housing under the LSS 12 for people with disabilities, daily activity, personal assistance and social psychiatry. As a result of the reorganisation and the redistribution of activities that have taken place, it is not meaningful to examine the net cost trend for the affected activities in this report, as the net costs after reorganisation are not comparable with the net costs before reorganisation. Safety, participation, accessibility and influence are important quality concepts within both elderly care and social care for people with disabilities. Ultimately it is about the user s experience of the activity and it is therefore important to know what this is in order to drive activity development forward. In terms of elderly care, the users experience is gauged through the Swedish National Board of Health and Welfare s annual user survey. Within disability support, Malmö has started using a relatively new tool that has been specifically developed for people with reduced cognitive function. The user surveys mean, among other things, that good examples from activities with a high level of user satisfaction can be shared with activities with poorer results. The new organisation spent a lot of time during the autumn mapping and inventorying the development work begun in the previous organisation. Other important focus areas during the year which affect the users experience of the activity were skills provision, reduced absence through illness and improved staffing planning. Digitisation brings opportunities for a more efficient and accessible activity for both users and employees throughout the healthcare and social care activity. In 2017, the City of Malmö took part in the LEDA för smartare välfärd programme, which is run by the Swedish Association of Local Authorities and Regions, (SALAR) in collaboration with Sweden s innovation agency (Vinnova). The programme aims to increase the speed, benefit and quality of the introduction of digital solutions in welfare by identifying, describing and sharing what enables development and what may prevent it 13. Work is continuing at the City of Malmö within Testbed for elderly care at the health, care and social care administration, where innovators are invited to test and develop products and services in conjunction with the activity. The disability support administration is also examining the possibility of joining the testbed or forming its own. The new Act (2017:612) on coordination on discharge from inpatient healthcare came into effect on 1 January 2018 and aims to reduce lead times between inpatient care and care and social care in the home. The law also means that the municipality s liability to pay for a care place after completed treatment comes into effect after three weekdays (irrespective of whether these are working days or weekends/public holidays) in contrast to the current five working days. Adjustments have been made during the year to enable a more flexible transition between inpatient care and municipal care. These include increased staffing at evenings and weekends, as well as new procedures and processes in the activity. 12 Swedish Act (1993:387) concerning Support and Service for Persons with Certain Functional Impairments 13 Source: SALAR, 19/02/

46 New forms of working have also been introduced within the context of the new health and medical care agreement between Skåne s municipalities and Region Skåne. This form of care means that it will be possible for a greater proportion of the care provided to those who are most ill to be given in the home environment of the patient/user, with the help of doctors from the region as well as nurses and healthcare staff from the municipality. At the end of 2017, around 60 patients were enrolled in the new form of care, of which 10 were patients in ordinary housing being provided with care by the mobile care team ÄMMA (Elderly in Malmö mobile emergency team). In June, Sweden s largest dementia home, Soltofta, opened with 72 apartments divided across eight departments. The home has been built to provide a safe environment that is specially designed for its users. It has two inner garden courtyards, which enable users to move around and do activities both indoors and outdoors. A new type of alarm system means that the residents can move around larger areas and go down to the inner courtyards without the risk of going to the wrong floor or ending up outside the building. Since 2015, there has been a national initiative with stimulus funding for increased staffing within elderly care. The aim is to provide increased safety and quality to the individual. In 2017, the City of Malmö received just over SEK 58 million in total, which helped to increase the quality of reception for those returning home from a stay in short-term accommodation or hospital and to increase safety at night in retirement homes. In total, the stimulus funding financed over 132 annual full-time equivalent employees at the City of Malmö and at private providers and helped to increase the percentage of employment of more than 30 staff. Of the users with elderly care measures, the majority are aged 85 and older. In the 90+ age group, around 90% of residents have some form of measure. The corresponding proportion for the age group is around 54%. The population trend in these age groups therefore affects the demand for elderly care. Over the past five years, the number of residents in these age groups has fallen by around 4%, while the proportion of residents with measures has increased. In 2013, on average 50% of the age group and 79% of the 90+ age group had elderly care measures. Overall, the population trend means that the average number of users with elderly care measures is increasing. In 2017, an average of 10,430 users per month had measures within home care, short-term care and retirement homes, which is on a par with the level in Compared with 2013, however, the number of users has increased by around 6%. At the same time, statistics for the respective activities show a certain amount of shift in measures from care in a retirement home to home care and short-term care 14. At times during 2017, there were waiting lists for retirement homes, which affected the number of short-term placements, but the trend is also towards more people being able to be offered care and support in their own home. Changes to working methods through the new health and medical care agreement with Region Skåne, for example, mean that this trend is likely to continue in the future. 14 Short-term care means accommodation for a limited period, for example after discharge from hospital or while waiting for a place in special housing. 46

47 Self-determination and the ability to live an independent life are important elements of the legislation on special support and service for people with disabilities (LSS 15 ). In the user survey carried out during the autumn for users of housing with special service under LSS (LSS housing), there are three questions about self-determination: Are you able to decide what you do in your free time?, Are you able to decide what you want help with? and Are you able to decide what you eat for dinner?. The overall result of these three questions shows that around 74% of users feel they have self-determination in their everyday life. An important development area identified by the activity in terms of increasing opportunities for selfdetermination and independence is cognitive and communication support. Cognitive and communication support enables users in the activity to increase their ability to express themselves and to understand, which improves their opportunities to participate in society and to make their own independent decisions. Cognitive support includes everything that makes it easier for an individual to manage time, remember, plan, understand and choose. The activity also worked on the quality assurance of implementation plans during the year, where the user s wishes concerning the implementation of measures are documented in order to increase the users control over how and when support is provided. Demand for LSS housing continues to increase. On average, 903 users had an LSS home during 2017, of which 13 were placed in accommodation outside Malmö. The rate of increase of 1% in 2017 was relatively low in comparison with the average rate of increase over the past decade of around 3%. In total, 27 new apartments were added to the City of Malmö s stock in Redevelopment is also underway in several homes in order to better meet the needs of users. At the end of 2017, there were 36 people waiting for a place in LSS housing, of which 26 people had been waiting for longer than three months. Of those who had been waiting for a long time for a place, nine people had been allocated one or more accommodation options but chosen to turn them down. Daily activity aims to provide meaningful employment based on the user s specific conditions. The number of users with measures has also increased within this activity. In 2017, the number of users increased by 4% to a total of 772 users. Over the past five years, the number of users in the activity has increased by a total of 16%. As a result of the increase in the activity, development work has taken place in recent years in order to achieve more efficient use of resources in the form of premises and staff. The activity is also being developed continuously to provide for the needs and interests of the users. People with a mental disability receive support within social psychiatry. This includes housing support that aims to help the individual in everyday situations both in and outside the home. Support is provided to people with a mental disability who live in their own home. There were 450 cases of housing support in total at the end of Personal assistance can be approved under LSS for people with a disability who need support in order to be able to live an independent life. If the need for assistance exceeds 20 hours per week, the user can apply to 15 Swedish Act (1993:387) concerning Support and Service for Persons with Certain Functional Impairments 47

48 the Swedish Social Insurance Agency for assistance compensation. If assistance compensation is approved under the Swedish Social Insurance Code (SFB), the municipality remains responsible for the costs of 20 hours per case per week. Guideline judgments in recent years have led the Swedish Social Insurance Agency to change its assessments so that in some cases users have lost their entitlement to assistance compensation or have had new applications rejected. This has resulted in users turning to the municipality to a greater extent in order to apply for personal assistance or other supplementary measures. The Swedish National Board of Health and Welfare identifies in a report that the changes in the Swedish Social Insurance Agency s assessments have led to the municipalities having to take on greater responsibility than before. This has also affected the opportunities of users for participation and self-determination, which has led to relatives taking greater responsibility for meeting their needs for support, care and supervision. 16 The shift of responsibility from the Swedish Social Insurance Agency to the municipality is reflected in the number of cases and hours of personal assistance. The number of cases with personal assistance under SFB fell by almost 6% in 2017 to an average of 451 cases per month (each of which covers 20 hours per week). The increase in personal assistance under LSS (decided on by the municipality) is almost four times as large, however. This is because when an individual loses entitlement to assistance compensation and turns to the municipality, the municipality assumes the costs for the entire personal assistance needs of the individual, which were previously funded mostly by the Swedish Social Insurance Agency. The chart shows the trends for personal assistance under SFB and personal assistance under LSS. The figures are indexed in order to make the trends clearer, rather than total volumes. The effects are also reflected in net costs, which are falling for personal assistance under SFB but increasing strongly for personal assistance under LSS. The Swedish Migration Agency has primary responsibility for the reception of asylum seekers arriving in Sweden and must arrange accommodation for adults and families. The municipality has responsibility for receiving and arranging accommodation for asylum-seeking children arriving alone and where necessary providing support services in accordance with the Swedish Social Services Act. The municipality must also appoint a guardian to represent the child. Children seeking asylum, whether or not they arrive alone, have the right to attend preschool and school on the same terms as other children in Sweden. Once a person has been granted a residence permit, responsibility transfers entirely to the municipality, where the person is then registered in the national population register and so becomes a member of the municipality on the same terms as other residents. The municipalities also have a special responsibility for things such as help with housing, introduction initiatives and SFI. When a person is granted a residence permit as a refugee, having been granted asylum, under particularly deserving circumstances or as a relative of these groups, this person is removed from the Swedish Migration Agency s reception system and allocated to a municipality. If the person already has, or on 16 Source: Konsekvenser av domar om det femte grundläggande behovet En analys av hur kommuner och brukare påverkas, [Consequences of judgments on the fifth basic need An analysis of how municipalities and users are affected], Swedish National Board of Health and Welfare, December

49 receiving a residence permit organises, their own accommodation in a municipality, the person is considered received by that municipality. In 2017, a total of 3,104 new arrivals with a residence permit were received in Malmö, of which 1,150 people were in their own accommodation in the city when they were granted a residence permit. The immigration of relatives is the second-largest group and accounts for 673 people. A total of 621 people who were received in other municipalities on being granted a residence permit have moved to Malmö of their own accord during the year. A further 602 people came to Malmö from state accommodation through referral under the settlement law or through people leaving accommodation of their own volition. Malmö has also received 58 quota refugees. The chart shows how many have been received in Malmö over the past five years. The statistics show only newly arrived immigrants during the year. People with a residence permit who have been received in a municipality are entitled to certain establishment measures from the Swedish Public Employment Service and the municipality. These include education, Swedish for immigrants (SFI), social orientation and other activities to accelerate establishment in working and community life. The Swedish Public Employment Service is responsible for coordination during the establishment period, which normally lasts around two years. In recent years, almost 60 people per month have left the establishment programme for new arrivals and entered unemployment or programmes. The forecast is that the outflow from the establishment programme will increase slowly up to autumn 2018, when a rapid increase to around 130 people per month is anticipated. A large proportion of these is expected to apply for economic assistance. The Swedish Public Employment Service statistics show a wide variation between the activities of women and men 90 days after completing the establishment programme. In 2017, only 12% of women were in work or studying, while the corresponding figure for men was 36%. Under the settlement law, 17 new arrivals with a residence permit are referred to all municipalities according to a specially determined allocation figure. The aim of the law is for new arrivals to be received for settlement in a municipality more quickly and so begin establishing themselves on the labour market and in society. Referrals to municipalities relate in the first instance to new arrivals who are housed in state accommodation provided by the Swedish Migration Agency and quota refugees. Unaccompanied children are not covered by this law, except for those who are quota refugees. 17 The Swedish Act (2016:38) on the reception of certain newly arrived immigrants for settlement 49

50 In 2017, there were 408 new arrivals allocated to Malmö (included in new arrivals from state accommodation in the chart above). Of these, 33 could not be received during the year because of a shortage of space, but they will be received during The ability to receive new arrivals has been affected by unforeseeable delays, such as appeals and moisture damage in new constructions. It has been decided that 155 people will be allocated to Malmö in Labour market policy and labour market measures are principally a government responsibility. The municipal initiatives complement those provided by the state and focus in particular on young people and recipients of maintenance support. The initiatives are to provide the conditions for making use of the community s general measures available within the labour market and education and to offer alternatives where there is a lack of state or other municipal measures. The initiatives must meet the needs of women and men equally, focus on work and self-sufficiency and be based on individual need. During the year, over 4,000 people, of which 2,100 were women and 1,900 men, were registered for the municipality s labour market initiatives. The number of people who left the labour market initiatives for work or study increased slightly compared with More men left the labour market initiatives for work or study compared with the previous year. For women, on the other hand, the number leaving for work or study fell. THE MUNICIPALITY S LABOUR MARKET INITIATIVES Women Men Total Women Men Total Women Men Total Registered Moved into w ork Moved into study Total into w ork and study Source: Procapita arbetsmarknad Change Work began during the year on a new process to shorten the lead times from application for economic assistance to participation in a labour market initiative. A review has also been carried out of existing initiatives and of the need for new initiatives and changes will be implemented in A strategic agreement on cooperation between the municipality and the Public Employment Service in Malmö was revised during the year and forms the basis for extended cooperation during Collaborative work relating to young people based on the agreement between the Malmö Public Employment Service and the City of Malmö within the context of the Delegation for Young People to Work (DUA) and UngMalmö 18 has been prioritised. Targeted work began during the year to offer a parallel labour market plan to young women and men aged who are studying SFI. The work carried out within UngMalmö aims to reduce the establishment period of new Malmö residents. Praktik Malmö has increased the number of summer internship appointments and the number of places within the internship initiative at events. 18 UngMalmö is an activity that works for and with young people aged who are unemployed. 50

51 The City of Malmö is one of the largest employers in Skåne, with over 25,500 staff across 400 different professions. Every day, they provide Malmö residents with services in a range of areas such as schooling, the environment, elderly care, child care, urban planning, transport and culture. Their commitment, expertise and responsibility are important prerequisites for high-quality welfare services. In order for the City of Malmö to be able to provide a good service to Malmö residents, it is important that the organisation can ensure it has the right skills at its disposal. Work continued on a joint management system for skills provision which will create the conditions for describing current skills and the skills needed in a structured and systematic way. The administrations have performed analyses and produced a skills provision gap, while a municipality-wide skills provision gap has also been collated. The City of Malmö s activities work to offer good employment terms. For several years, therefore, the work to reduce the number of hourly paid employees in favour of more secure forms of employment has been a key issue. In 2017, the proportion of hourly paid staff fell for the fourth year in a row, mainly within health and social care and preschools. Work to create the conditions for a sustainable working life at the City of Malmö continued during the year. Absence through illness fell during 2017, which is positive. It is nevertheless important both to continue with the work that has been shown to produce good effects and to do further work on things that need to be developed. The average number of employees during the year, including temporary staff with an hourly wage, was 25,320, an increase of 628 compared with The chart shows the trend since The average number of employees is the average number of employees for the year, converted to full-time equivalents. On 31 December 2017, there were 25,502 monthly salaried employees, of which 76% were women and 24% men. The number of monthly salaried employees therefore rose by 463 compared with the previous year. Of all monthly salaried employees, 22,236 were permanent, which is 87%. Of women employees, 88% were permanent, while the figure for men was 84%. The number of permanent employees increased by 532 during The average age of a City of Malmö employee was 45.5, which is a marginal increase compared with the previous year s figure of The average age for women employees was 46 and for men 45. The average age for women has increased by one year since 2016, while the average for men remains the same. There are around 400 different occupations spread across different professional groups in the city s various areas of activity. The fifteen largest occupational groups accounted for a total of 14,642 employees or 57.4% of employees. The table shows the number of monthly salaried employees by occupational group. NUMBER OF MONTHLY SALARIED EMPLOYEES WITHIN THE 15 LARGEST OCCUPATIONAL GROUPS Total number Prop. of Prop. of w omen men Childcare professional ,4% 11,6% Assistant nurse ,3% 10,7% Preschool teacher ,9% 6,1% Healthcare assistant ,2% 26,8% Teacher of Years ,4% 17,7% Support assistant, LSS ,1% 25,9% Teacher of Years ,3% 35,7% Teaching assistant ,2% 46,8% Head of department ,4% 26,6% Teacher, general subjects ,2% 46,8% Cook ,2% 35,8% Social w orker, BoU authority ,9% 7,1% Assistant ,9% 14,2% Educator ,4% 14,6% Out-of-school educator ,3% 33,7% 51

52 The average wage increase for employees covered by the 2017 wage review was 2.96%. The increase was 3.03% for women and 2.76% for men. The average wage for all monthly salaried employees was SEK 29,416 as at 31 December This represents an increase of SEK 972, or 3.42%, compared with the previous year. The average wage for women increased by 3.45% (SEK 975) to SEK 29,250 and the average wage for men increased by 3.27% (SEK 947) to SEK 29,938. STAFF COSTS, SEK MILLION Salaries Social security expenses Pension costs Total Staff costs were SEK 12,338 million in 2017, which is an increase of 6.7% compared with the previous year. The distribution of staff costs is shown in the table. The pension costs in the table also include interest on pension provisions. Staff costs constituted around 58% of the activity s costs (excluding depreciation). Absence through illness in 2017 was 6.55%, a fall of 0.40 percentage points in relation to Absence through illness for women was 7.24% and for men 4.36%. In comparison with the most recent ten-year period, it can be seen that absence through illness has increased since 2011 but is now falling. This is in line with the trend in publicsector organisations. The occupational groups with a higher absence through illness than the average for the City of Malmö are teaching assistants, healthcare assistants, cooks, out-of-school educators, educators, preschool teachers, childcare professionals, assistant nurses and support assistants LSS. The trend for absence through illness volume for all monthly salaried employees during the period is shown in the chart. Total sick pay costs for 2017 were SEK 270 million (SEK 249 million in 2016). The costs of short-term absence through illness (1 14 days) were SEK 218 million, i.e. just over 80% of the total sick pay costs. ABSENCE THROUGH ILLNESS AS A PERCENTAGE (change in percentage points) Total time absent through illness in relation to total normal w orking hours of w hich long-term absence through illness (more than 60 days) in relation to total absence through illness Time absent through illness for w omen in relation to total normal w orking hours for w omen Time absent through illness for men in relation to total normal w orking hours for men Absence through illness for the under-29 age group in relation to total normal w orking hours for the group Absence through illness for the age group in relation to total normal w orking hours for the group Absence through illness for the 50+ age group in relation to total normal w orking hours for the group Change 6,90 7,16-0,26 39,20 41,70-2,50 7,60 7,92-0,32 4,80 4,83-0,03 6,00 6,03-0,03 6,20 6,44-0,24 8,20 8,47-0,27 The table shows absence through illness according to the statutory absence through illness report, which is calculated using a specifically indicated calculation basis (including temporary employees paid by the hour, rehabilitation compensation and preventive sickness benefit, excluding leave of absence). Total absence through illness according to this report fell by 0.26 percentage points in 2017 compared with the previous year. 52

53 In 2017, there were 8,266 jobs advertised, which was an increase of 8% compared with the previous year. This increase is partly attributable to a greater volume caused by the population trend and partly to staff turnover as a result of an increasingly mobile labour market and a high proportion of broken off recruitments. In 2017, the departments drew up a forecast and analysed the skills gap and established targets and plans in accordance with the joint working method for skills provision. This work continues during Total staff turnover for the City of Malmö in 2017 was 12.5%, which was an increase of 0.5 percentage points compared with Staff turnover among women was 12.7% and among men was 11.7%. The occupational groups with high staff turnover during the year included educators (23.3%), occupational therapists (24.5%), LSS support educators (22.0%) and nurses (29.07%). In order to afford the people of Malmö a good service, it is important to have equality and diversity in the city s activities. The proportion of employees with a foreign background was 36.6%, an increase of 1.4 percentage points compared with Of all employees, 37.0% of women had a foreign background and 35.0% of men. An efficient leadership is important in order to bring about a working climate where all employees feel motivated, committed and involved. An important factor in achieving efficient leadership is leader density in the organisation. In 2017, the average leader density was 19.2 employees per manager. In 2016, this was 19.8 employees per manager. Leader density varies between departments however. The average for female managers was higher than for male managers. Female managers had an average of 20.2 employees, while male managers had an average of 16.7 employees. At the City of Malmö there were 1,326 managers in total at the turn of the year, of which 72.1% were women and 27.9% men. Over the next decade it is estimated that there will be around 5,081 permanent employees who will retire with an old age pension (at the age of 65). This corresponds to 22.9% of the total number of permanent employees. In 2017, there were 440 employees who retired with an old age pension. In-depth information and follow-up of the City of Malmö s staff policy objectives and general staff areas can be found in the Staff report

54 The financial development and position of the municipality are analysed here. The analysis covers the committees and other items within tax-funded activity. A report is submitted on the profit/loss, investments, certain key financial ratios and reported budget deviations and forecast accuracy. Finally, an assessment is made of the outlook for the municipality and its finances during 2018 and beyond. Profit for the year was SEK 1,109 million, compared with SEK 962 million the previous year. The budgeted profit for 2017 is SEK 261 million and the reported profit therefore represents a deviation from budget of SEK +848 million. As in the previous year, the surplus is largely the effect of the economic situation and the current economic boom. Higher tax revenues and income from land sales have generated a surplus compared with budget. The very low interest rates have resulted in a surplus with regard to the Service department s properties, as well as improved net financial items. This surplus and a lower level of investment have meant that net debt has not increased to the extent budgeted. Instead, net debt as a proportion of taxes and general state subsidies fell compared with the previous year. The result has also brought a high level of tax financing for the year s investments, which means improved financial scope for the major investment requirements of the coming years. DEVIATION FROM BUDGET, SEK MILLION Outcome Budget Deviation Activities Development gains Capital gains Companies and municipal associations Tax income & general state subsidies Net financial items TOTAL A larger surplus from development activities than budgeted and capital gains account for SEK 343 million of the deviation from budget. Tax income provides a surplus of SEK 158 million compared with budget. The higher state subsidy for housing construction accounts for SEK 50 million of the deviation. The companies and municipal associations report a surplus of SEK 38 million. This deviation is the result of a greater than budgeted overall effect of the offsetting of deficits and surpluses at the various companies within Malmö Stadshus AB. Otherwise the activity generates a surplus of SEK 276 million. Of the surplus, SEK 145 million relates to central allocations not being utilised during the year. This is the result, among other things, of delays to measures where funding was set aside under the City Executive Board s disposable allocations. The committees will, in several cases, utilise resources during 2018 instead and this has been taken into account in the budget for Funding was also set aside in 2017 for a stimulus allocation that was not fully utilised, which contributes to the surplus. A further SEK 100 million of the surplus in the activity is attributable to other central items, with pension costs and staff costs being lower than budgeted. General municipal costs for premises and facilities also generate a surplus. 54

55 The surplus reported for the activity is therefore almost entirely attributable to central items, either in the form of central allocations not being utilised or general municipal costs being lower than budgeted. Most committees have relatively small deviations from budget. The technical committees and the City Executive Board report a surplus. The main deficits are at two committees: the Disability Support Committee and the Labour Market and Social Welfare Committee. The reorganisation on 1 May, from city district committees and social resource committee to specialist committees, has affected the activity within health and social care, individual and family care and leisure and culture during the year. There has been a focus on issues of organisation, collaboration and boundaries, both within the new administrations and between them and other administrations in the City of Malmö. During the autumn, the city council decided to give the committees that were forecasting a deficit in the interim report for January August permission to report a deficit for 2017 and instead take measures to achieve financial balance in Taking this into account, budget flexibility can be considered good, despite the fact that some committees report larger deficits. In 2017, none of the city council objectives were fully achieved, with the exception of the financial objective. The city council objectives are long-term in nature, however, and it is positive that there is progress towards target achievement. The overall assessment, based on the reported profit, the achievement of the financial objective and the positive progress towards target achievement is that the financial management has been good. The municipality s biggest sources of income are tax income and general state subsidies and these account for almost 80% of total income. Compared with the previous year, tax income increased by 6% and general state subsidies by 2.4%. The municipality had total income of SEK 23.5 billion in 2017, an increase of 6.2% compared with the previous year. The chart shows the distribution between the different sources of income. The majority of the general state subsidies, SEK 4 billion, comes from the municipal income equalisation system and is a consequence of the municipality having a relatively weak tax base. The municipality s tax capacity for the 2016 income year was 85.9% of the national average tax capacity. Following a relatively long period with a falling proportion of average tax capacity, the downward trend is believed to have ended and over the past two years the average tax capacity has increased. The municipality s total costs for the year were SEK 22.4 billion, which was an increase of 5.8%. Staff costs are the largest cost item at around 55%, followed by procurement of services and materials, which account for 32% of costs. The percentage distribution between cost types is shown in the chart on the left below. Of the municipality s activities, education is the largest, with a share of 39% of the municipality s costs, followed by healthcare and social care with 27% of the costs. The distribution by activity is shown in the chart on the right below. 55

56 The income statement forms the basis for reconciliation with the requirements of the Swedish Local Government Act for economic balance. This means that capital gains are to be deducted from the result. The result for 2017, adjusted according to the requirements of the Swedish Local Government Act, is SEK +941 million. The Swedish Local Government Act allows for positive results to be allocated to the profit equalisation reserve. The reserve can be utilised in future years if tax income is negatively affected by a weakening in the economy. According to the city council s guidelines, allocation can take place when the profit exceeds 1% of taxes, general state subsidies and equalisation (SEK 184 million in 2017). Under these conditions, SEK 941 million less SEK 184 million, i.e. SEK 757 million, can be allocated to the profit equalisation reserve. BALANCED BUDGET STATEMENT, SEK MILLION P rofit/loss for the ye a r all capital gains certain capital gains acc. to exceptions certain capital losses acc. to exceptions unrealised losses on securities reversal of unrealised losses on securities P rofit/loss a fte r ba la nc e d budge t a djustme nt funds to profit equalisation reserve funds from profit equalisation reserve exceptional reason RIPS Ba la nc e d budge t re sult Balanced budget deficit from previous years TOTAL Ba la nc e d budge t re sult to be re store SALAR s assessment in February is that tax income will have a lower rate of increase during the period than the average increase over the past decade. Should this be the case, the municipality will be able to use funds from the profit equalisation reserve during these years in order to even out income over the business cycle. It is a condition that these funds are used to balance a negative balanced budget result. Investment activity during the year totalled SEK 2,136 million, which is slightly lower than the previous year and significantly lower than budgeted for the year. The Service Committee and the Technical Committee are the committees with the largest investment volume at the City of Malmö. The Service Committee s investments for the year were SEK 1,489 million, which is more than SEK 400 million lower than the approved limit. This outcome is the result of several factors, such as projects being both brought forward and pushed back and some projects becoming cheaper while others became more expensive. 19 Budget parameters for the period , Circular 18:5, Swedish Association of Local Authorities and Regions 56

57 The Technical Committee s investments for the year were SEK 459 million, which is SEK 450 million lower than the approved limit. The difference is largely explained by the postponement of a number of projects, as well as lower costs in some projects. The average investment volume over the past five years was SEK 2,180 million per year. The chart below shows the trend in recent years for the corresponding five-year average and investments in relation to the activity s expenses. As can be seen from the chart, the investment volume has gradually increased in absolute terms, but not as a proportion of the activity s expenses. Before investment in an investment object commences, the committee must obtain object approval from the City Executive Board if the total gross outlay for the object exceeds SEK 15 million. If the total gross outlay for the object exceeds SEK 50 million, the object approval of the city council is required. During the year, decisions were taken regarding object approval for a total of SEK 2 billion. The tables on page 113 show a follow-up of decisions taken in respect of object approval. Sales for the year totalled SEK 755 million, which was SEK 400 million higher than during the previous year. The greater portion of the sales, SEK 570 million, related to development properties. Investments can be financed in three ways: tax financing through depreciation and surpluses in the activity, through sales of assets or by means of reduced financial assets/increased debts. Tax revenues were able to finance 67% of the year s investments. The remaining 33% was financed through sales. The year s investments therefore did not result in any need to increase debt. The chart shows the trend in recent years in the form of a rolling five-year average. The equity ratio indicates the proportion of the municipality s assets that are financed by equity. Equity increased by 8% during the year and assets by 6%. This means that the equity ratio at the end of the year was higher compared with the previous turn of the year and amounted to 45%. 57

58 The equity ratio, including the portion of liabilities recognised as contingent liabilities, was 29%, an increase of two percentage points compared with the previous year. The reason why the equity ratio increases more if contingent liabilities are included is that the contingent liability for pensions earned before 1998 is gradually reducing. The debt ratio indicates the proportion of assets not financed by equity. Just as the surplus and the lower investment level meant an increase in the equity ratio, so the debt ratio has decreased. At the turn of the year, the debt ratio was 55%, a fall of one percentage point compared with the previous year. The loan ratio indicates the size of net loans (funds invested and lent less borrowings) relative to income from taxes and general subsidies. Interest-bearing net liabilities (excluding pension provisions) fell by SEK 358 million in 2017 to SEK 218 million. This resulted in a fall in the loan ratio of over two percentage points to 1.2%. The municipality s interest-bearing net liabilities, including pension provisions, fell by SEK 253 million during the year and totalled SEK 2,080 million at year-end. Pension costs accounted for SEK 987 million of the costs for the year. The table shows the different elements of the pension costs and how they have changed compared with the previous year. As the municipality reports its pension obligations in accordance with the so-called mixed model, the disbursement of pension benefits earned before 1998 is shown as a cost. During the year, this cost amounted to SEK 296 million. The municipality has pension obligations for employees and former employees totalling SEK 7,339 million. Pensions earned up until 1998 total SEK 5,477 million and are recognised as a contingent liability. This means that 75% of the pension obligation lies off the balance sheet. In PENSION COSTS, SEK MILLION Change Premium KAP-KL Defined contribution Old-age pension Pension provisions excl. ÖK-SAP* ) Pension provisions ÖK-SAP Disbursed pensions earned before Financial expense **) Other pension costs Total FINANCIAL EXPENSE, SEK MILLION (incl. special payroll tax) Change Provisions Contingent liability Financial investments 0 Total re-borrow ed funds *) ÖK-SAP means the agreement on special contractual pension (according to KAP-KL) **) Pension costs are reported in note 2, financial expense in note 7 58

59 total, the obligation decreased by SEK 31 million. The entire pension obligation has been re-borrowed in order to finance part of the municipality s overall assets. Of the reported result from previous years, SEK 1,796 million has been reserved in a profit equalisation reserve intended to cover negative results arising as a consequence of a weak income trend in an adverse economic situation. In the annual accounts it is proposed that a further SEK 757 million be allocated to the profit equalisation reserve. SEK 100 million from the results of previous years has been reserved for preventive social initiatives. In 2013, the City Executive Board approved five measures at a total cost of SEK 34 million. SEK 4 million of this was utilised during The city council has set the financial objective for the City of Malmö to have sustainable financial development. The objective is long-term and is designed to ensure sustainable financial development over time. Financial sustainability is measured using the three indicators below. Based on the reported development of the three indicators, the financial development can be described as sustainable, given that all indicators are within the budgeted level. FINANCIAL OBJECTIVE, Proportion of taxes & state subsidies Profit/loss 6,0% 5,5% 3,5% -1,0% 1,0% Loan ratio -1,2% -3,3% -3,4% -3,8% 2,5% Depreciation & interest 5,3% 5,0% 5,1% 4,6% 5,2% The profit for the year must be 1% of tax income, general state subsidies and equalisation, taking into account the effects of component depreciation, by 2019 at the latest. Under the plan, the profit for the year as a proportion of taxes and general state subsidies must gradually increase to 1% by The budgeted level of the indicator for 2017 is a profit of 0.5% of taxes and general state subsidies. The effect of component depreciation corresponds to a further 0.9%. For the financial objective to be considered achieved, the profit for 2017 must therefore correspond to 1.4% of taxes and general state subsidies. The reported result is 6%. Interest-bearing net loans must be no more than 30% of tax income, general state subsidies and equalisation by The reported loan ratio for 2017 is 1.2%. A loan ratio of over 11% was budgeted for The relationship between net financial income, as well as depreciation, and tax income, general state subsidies and equalisation is to be monitored. The reported capital costs for 2017 correspond to 5.3%, which is 0.1 percentage points lower than budgeted. The budget deviation for financing and general municipal items is SEK +452 million. Income from taxes and general state subsidies was SEK 158 million higher than budgeted. The higher state subsidy for housing construction accounts for SEK 50 million of the deviation. 59

60 A further SEK 106 million of the surplus is attributable to lower pension costs/staff costs and lower costs for general municipal premises and facilities. The companies and municipal associations report a surplus of SEK 38 million. This deviation is the result of a greater than budgeted overall effect of the offsetting of deficits and surpluses at the various companies within Malmö Stadshus AB. A further SEK 108 million of the surplus is accounted for by funding set aside at the disposal of the City Executive Board that was not utilised during the year. This is the result, among other things, of delays to measures to which the funding relates and the committees will, in many cases, utilise resources during 2018 instead. This has been taken into account in the budget for With the new organisation coming into effect from 1 May 2017, some of the deficit for the first four months at the city district committees and the Social Resource Committee was transferred to the new committees through re-budgeting. This re-budgeting of a total of SEK 41 million is reported centrally as a surplus and will offset the reported loss for the period January April. The Chief Guardians Committee reports a surplus of just over SEK 1 million. This is SEK 4 million lower than forecast in the Interim Report January August and is largely the result of fees and costs for guardians, for unaccompanied children with a residence permit among others, increasing during the latter part of the autumn. The City Executive Board reports a total surplus for 2017 of SEK 129 million. One reason for the deviation from budget is that funds set aside for stimulus and restructuring and for projects and investigations have not been fully utilised during the year. Of a total of just under SEK 200 million, just over SEK 150 million has been distributed for various purposes. Most of the committee s surplus arises within the budget for the City Executive Board s administration, mainly as a result of vacant positions, higher income from procurement activity than planned and unused reserves for development and investigation. The Technical Committee reports a surplus of SEK 11 million, excluding port facilities and gains from development activity and capital gains. This surplus is mainly attributable to higher income than budgeted from leasehold site rents, land allocations and parking spaces, for example. This higher income is offset to a certain extent by higher costs for environmental remediation, grants for public infrastructure and writedowns. On 1 September 2017, responsibility for port facilities was transferred from the City Executive Board to the Technical Committee. Port facilities report a surplus of SEK 17 million. This surplus is attributable to rental income from properties in Nyhamnen, which were taken over by the City of Malmö through an exchange agreement in Mellersta hamnen, as well as a correction of previous years income. Development activity provided a surplus of SEK 475 million during the year, which is SEK 175 million higher than budget. Capital gains, which are not budgeted, provide a surplus of SEK 180 million. The committee reports a surplus of SEK 97 million. The surplus is primarily attributable to the City properties activity and is an effect of the low interest rates, lower costs of depreciation and lower costs for heating and for snow clearance and de-icing. Higher income than budgeted also contributes to the surplus. 60

61 The committee reports a surplus of SEK 25 million. The city planning office shows a surplus of SEK 16 million, primarily as a result of increased revenue from planning permission and building fines, as well as lower staff costs than budgeted. The costs of housing adaptation contributions show a surplus of SEK 9 million, which is mainly due to fewer decisions as a result of lower case volumes. The committee reports a surplus of just under SEK 2 million, mainly as a result of vacant positions in some of the strategic environmental projects. The surplus for the year is SEK 5 million, the majority of which is income from funds. A surplus arises from fund income because the amounts are considered uncertain and are therefore not budgeted. The Leisure Committee reports a deficit of SEK 1 million. The Preschool Committee reports a fairly small surplus of SEK 3 million in relation to budget. Deficits at the municipal preschools have been offset by surpluses for state subsidies and stimulus funding, among other things. Stimulus funding allocated by the City Executive Board is included in the results as a surplus of around SEK 7.8 million. Delayed deliveries and lower prices than estimated are the reason for the surplus. The Compulsory Education Committee reports a deficit of SEK 9 million. This deficit is primarily the result of some schools that have had a reduction in students failing to adapt costs to the lower volume, increased staffing levels at schools where the committee has received orders to pay fines and higher costs than budgeted for special teaching groups. The committee reports a surplus for the year of SEK 9 million. The main reasons for this result are that there were more students in municipal activity responsibility than budgeted, while the number of students in municipal upper secondary schools was lower than budgeted. The cost per student is lower in municipal activity responsibility compared with the cost of a place at upper secondary school. The surplus is also the result of increased state subsidies for upper secondary school. The Labour Market and Social Welfare Committee reports a deficit of SEK 142 million, which is mainly the result of an increase in longer and more expensive institutional placements and the effects of changes to state compensation for unaccompanied children. A deficit of SEK 13 million is reported for economic assistance, primarily as a result of an increase in the national allowance and higher rents. The net costs of housing for homeless people were SEK 86 million higher than budgeted. This is primarily the result of accommodation for longer periods at hotels and in other expensive forms of housing. 61

62 The state subsidy for refugees was SEK 54 million higher than budgeted, mainly because more refugees were received than was forecast when the budget was drawn up. The Health, Care and Social Care Committee reports a break-even result for A discussion on the boundary with the Disability Support Committee took place during the year, which resulted in a transfer of municipal contribution from the Health, Care and Social Care Committee to the Disability Support Committee. The Disability Support Committee reports a total deficit of SEK 14.5 million. This deficit consists of a deficit for the committee of SEK 33 million and a surplus of SEK 18.5 million for the special framework for personal assistance under SFB. The deficit of SEK 33 million is primarily the result of higher costs than expected for health and medical care activity, as well as a deficit within the activities of personal assistance and LSS housing. The boundary discussion and the transfer of municipal contribution from the Health, Care and Social Care Committee resulted in the committee receiving just over SEK 18 million during the year. The committee will be conducting an examination of the administration s health and medical care organisation in the future in order to optimise the organisation and resource use. The city council reports a break-even result for The board of auditors reports a break-even result for The Election Committee reports a breakeven result for The Health and Medical Advisory Board reports a break-even result for An efficient follow-up and forecast methodology is a prerequisite for maintaining sustainable financial development. Good-quality forecasts mean that the committees are provided with a basis for corrective decisions in the event of anticipated budget deviations. In the interim report for January August, the total deviation from budget was forecast as SEK +485 million. In the annual accounts, it was SEK +848 million, which was a deviation from the forecast of SEK 363 million. The DEVIATION FROM FORECAST Annual accounts IR Difference City council Board of auditors Election Committee Health and Medical Advisory Board Chief Guardians Committee City Executive Board Service Committee Technical Committee Gains on the sale of property Environment Committee City Planning Committee Upper Secondary & Adult Education Com Compulsory Education Com Preschool Committee Culture Committee Leisure Committee Health, Care and Social Care Committee Disability Support Committee Personal assistance under SFB Labour Market & Social Welfare Com Homelessness Economic assistance State subsidy for refugees Committees dissolved in Financing Total

63 deviation from forecast is primarily the result of increased tax income, greater gains on property sales and the central allocation not being utilised to the anticipated extent. The table shows the deviation between the forecast in the interim report January August 2017 and the results in the annual accounts for committees and certain activities. It is not possible, however, to fully assess forecast accuracy by comparing actual budget deviations with previously submitted forecasts, as the committees may take measures or make investments on the basis of the most recent forecast. It is primarily the forecast accuracy in relation to investments for the individual budget year that needs to be improved. The need for investment funding has been overestimated for several years, both in the budget and in forecasts. Investments in 2017 were more than SEK 1 billion lower than budgeted. The main reason for this deviation is not that the costs of individual investment objects are lower but that the timing of investments has been pushed back. Although investments are more difficult to forecast than costs and income in the operating budget, there is a need to find methods to incorporate the effect of delays into planning. The result indicates good budget flexibility at the city s committees and the surplus has meant that the financial objectives have been achieved and the municipality has a strong financial position for the year ahead. Nevertheless, the view of the long-term financial trend from previous assessments still applies to the years to come. Costs will rise faster than income. The adjustment need can be estimated at half a percentage point per year over the next fifteen years with unchanged service levels. At the same time, analyses from the Swedish Association of Local Authorities and Regions, among others, show that historically the service level has risen by half a percentage point more than the demographic trend 20. The reason for this may be increased levels of ambition, both from the municipalities and from the government, combined with fact that demand for welfare services increases as the income and purchasing power of residents increase. If this trend continues, the difference between income and costs over the coming years will be greater than the financial analysis indicates. In February 2018, the Swedish Association of Local Authorities and Regions (SALAR) made the following assessment of the economic situation 21 : The Swedish economy is experiencing a boom and we estimate that GDP will grow by almost 3% this year. Domestic demand is expected to weaken during 2019, but the global trend will be slightly better, benefiting Swedish exports. We expect Swedish GDP to grow a little more slowly in 2019 than this year. The economic boom will then reach its peak and resource use in the Swedish economy will begin to weaken. As the number of hours worked will not increase at all next year, this will put a rapid brake on the growth in the tax base. This brings a risk of a significant gap between the income of the municipal sector and the strong growth in demand for schools, healthcare and social care which the rapid population growth entails. The budget for 2018 is based on SALAR s tax forecast from September The latest tax forecast indicates that tax revenues for 2018 will be SEK 130 million lower than budgeted. Part of this reduction is due to lower tax income for 2017 than was reported in the annual accounts, which in turn is the result of the wage total and rate of wage increase being overestimated in previous forecasts. This will also have an 20 Financial report, October 2017 on the finances of local authorities and regions, Swedish Association of Local Authorities and Regions 21 Budget parameters for the years , Circular 18:5, Swedish Association of Local Authorities and Regions 63

64 effect on the tax forecast for Another reason why tax income appears to be lower in 2018 is that the population increase in 2017 was lower than forecast. The budget for 2018 does not contain central funding to the same extent as in With the lower forecast tax income for 2018, it is likely that the result for 2018 will be significantly lower than the surplus reported for One uncertain factor in the assessment is income from the sale of land. Development gains of SEK 200 million have been budgeted for 2018, but in recent years these gains have been at a higher level. The long-term adjustment need of half a percentage point per year on average over the next fifteen years is not evenly distributed. The need for adjustments will be greatest over the next few years. This is because the tax base is expected to grow relatively weakly for the next couple of years 22. The assessment is that there is a shortfall in financing scope of almost 2% for In order to check this cost trend in the longer term, the activity will need to be developed and streamlined, for example through the introduction of new technology and new solutions for welfare services. The effect of these kinds of changes will take time, however, and will not resolve the short-term adjustment need. The increasing population will also require more housing and new infrastructure. The physical expansion of activity premises in order to keep pace with demographic trends will involve major investments, which will limit the scope for other investments. It will therefore be important to have a developed investment management process, where different investment options can be described on the basis of anticipated benefit, in order to help prioritise within this limited scope. 22 Budget parameters for the years , Circular 18:5, Swedish Association of Local Authorities and Regions 64

65 A new company was formed in 2017, Boplats Syd AB (operations began on 01/01/2017). The company, together with the city s other wholly owned limited companies, forms part of the municipality s corporate group, in which Malmö Stadshus AB is the parent company. The other companies in the group are MKB Fastighets AB, Malmö kommuns parkeringsaktiebolag, Parkeringsövervakning Malmö AB, Malmö Live Konserthus AB, Vagnparken i Skåne AB, Malmö Stadsteater AB and MINC i Sverige AB. The companies income totalled SEK 6,222 million in 2017, compared with SEK 6,553 million in the previous year. This large difference is mainly the result of MKB Fastighets AB s property sales in connection with the Culture Casbah project, which were reported in Amounts in SEK million Share holding Wholly owned within the Malmö Stadshus AB group MKB group % 35% 100% Malmö Kommuns Parkering AB % 16% 100% Malmö Live Konserthus AB % 12% 100% Vagnparken i Skåne AB % 13% 100% Malmö Stadsteater AB % 18% 100% Parkeringsövervakning i Malmö AB* , ,05 21% 4% 100% Boplats Syd 19 n/a 0,3 n/a 14 n/a 0,6 n/a 4% n/a 100% Minc ,4-0, % 33% 100% Part-owned* Operating income Profit/loss after financial items Total assets Equity Equity ratio, % CMP, Copenhagen Malmo Port % 10% 28% SYSAV group % 31% 46% Sydvatten AB % 24% 34% Municipal associations* VA Syd , n/a n/a n/a n/a 68% Rescue Services South ,5 0, % 9% 60% * Figures refer to 100% of the profit/loss and position The group s total profit (before appropriations and tax) decreased to SEK 382 million compared with SEK 980 million in This large difference is mainly the result of MKB Fastighets AB s property sales in connection with the Culture Casbah project, which were reported in Significant profits are reported by the MKB group with SEK 347 million (SEK 931 million), Copenhagen Malmö Port AB with SEK 57 million (SEK 31 million) and Sysav with SEK 71 million (SEK 135 million). The overall revenue and profit of the companies are expected to rise, based on the population increase and economic growth. For MKB Fastighets AB and VA Syd in particular, it is clear that investments in housing and in water and sewerage facilities will increase, which will result in a greater need for financing. The longterm investment need may possibly be checked by a future economic slowdown, but is still considered to be extensive and will lead to a significant increase in debt and interest rate sensitivity for the municipal group. 65

66 MKB Fastighets AB (MKB) is the parent company of the MKB group. MKB Fastighets AB is a public municipal housing group whose main activities are to develop, own and manage rental properties consisting of housing and commercial premises for all those who want to live and work in Malmö. As well as MKB, the group contains subsidiary MKB Net AB, which carries out operations relating to the group s broadband network. MKB is Malmö s largest housing company, with a market share of around 33% of the rental market. This makes it Malmö s biggest landlord. A total of 520 apartments (544) were completed and at the turn of the year production was underway on a further 1,066 apartments (1,184). The property Malmö centralfängelset 1 was acquired during the year. At the end of 2016, a total of 1,660 houses in Rosengården were sold to Rosengårds fastighets AB. MKB Fastighets AB owns 25% of the company. The sale of these properties is part of the work to facilitate the Culture Casbah urban development project in Rosengård. In October 2017, Rosengårds Fastighets AB took possession of the properties in Rosengården. During the year, MKB Fastighets AB was deregistered as a public company. A customer satisfaction index (NKI) of 70 was achieved during the year. This is the highest result since the survey began. Profit after financial items was SEK 347 million (931). The fall in profit after financial items is largely because last year the company sold 1,660 homes, which resulted in capital gains of SEK 598 million. Profit for the year after tax was SEK 147 million (738). MKB has a strong financial position. The company s equity at the turn of the year was SEK 4,702 million (4,521) and the equity ratio was 34% (35). Interest-bearing liabilities at the end of the year were SEK 7,210 million (7,560). All loans are raised via the City of Malmö s internal bank. All loans are raised without collateral. The loan-to-value in terms of the properties book value was 64% (74) and the loan-to-value in terms of the properties market value was 22% (25). The market value of MKB s property portfolio was estimated at the turn of the year at SEK 32,654 million (30,347), which exceeds the book value of the properties, including new construction and redevelopment in progress, by SEK 21,436 million (20,118). The valuation for the year means an increase in market value of 3% compared with 2016, after adjustment for new properties added, sales and investments in existing stock. The valuation follows the guidelines of the IPD Swedish Property Index (SFI). This is done with the aid of a yield-based method, where future net operating income, larger maintenance requirements and the residual value at the end of the calculation period are assessed for each individual property. The market valuation resulted in the reversal of previous write-downs by a total of SEK 30,205 million. The valuation has not led to any write-down of properties. 66

67 The general demand for existing rental homes in the region is very strong. Profit after net financial items for 2018 is estimated at around SEK 190 million. Provisions have been made in the accounts for social housing investments of SEK 100 million. These funds are planned to be used as an additional investment in measures to increase safety in Malmö s residential areas. Negotiations with the Tenants Association on the housing rents for 2018 resulted in an increase of 1.02% from 1 January Maintenance and investments in existing stock are estimated at around SEK 380/m². Changes to these parameters will affect the company s results. The level of maintenance can be adapted continuously, however, according to the current situation, for example in relation to the need for new production and capacity on the market. Market interest rates are expected to return gradually to a normal level of around 3.5 4%. For the company to maintain its financial position, a combination of measures will be required, including a gradual increase in rent levels and continuous productivity improvements. The investment volume for 2018 is estimated at around SEK 2,500 million, including the acquisition of land. Additional property acquisitions may be made. Around SEK 255 million of the investments relates to the improvement and maintenance of existing stock. There is uncertainty with regard to the investments, mainly in relation to commercial volumes and improvement and maintenance investments. At the turn of the year 2017/2018, there were 1,066 homes in production and the company has begun planning on a further 1,400 homes. Malmö Kommuns Parkerings AB (Parkering Malmö) provides parking in Malmö, both in its own facilities and on open land. The company was formed in 1976 and its task is to provide customers with parking in safe, well-maintained and welcoming facilities, whether it owns these or leases them from a third party. Parkering Malmö meets the city s parking needs in line with the development of the city of Malmö and takes active responsibility for sustainable development and consideration for the environment. During the year, Parkering Malmö has worked extensively on sustainability issues. A contract has been agreed with E.On under which the number of charging points for electric vehicles will have doubled at the company s facilities by the end of Following a joint procurement with the Streets and Parks Department at the Technical Committee, the modified services relating to mobile payment came into effect from the second half of the year onwards. Mobile payments are growing at a rapid rate and now account for around 25% of payments in areas where this service is offered. Coin payment at facilities with barrier systems was removed during the year and the number of users of the Swapaccess service has increased. Coins are now only accepted in a few areas. A surplus was reported for 2017 of SEK 38.3 million before appropriations and tax. The surplus is the result of major improvements in capacity utilisation at the company s facilities and reduced costs in the activity. Net revenue has fallen slightly compared with The previous year s figures included the task of municipal parking monitoring in revenue. This task was transferred to a separate municipal company in Excluding the effects of this, net revenue has increased by 4.7% compared with Most of this increase is accounted for by a combination of continued improvement in capacity utilisation at the 67

68 company s own new parking facilities and an increased number of leasing contracts. Malmö Live, Emporia and P-hus Hyllie have continued to make a positive contribution to increased net revenue. A strong increase in the number of purchased parking solutions, where developers choose to use the company s facilities for their parking solution instead of building their own car park, ensures continued positive development. Parkering Malmö is benefiting from the current low interest rates on the credit market. In 2018, loans in the amount of SEK million will be refinanced. The corresponding volume in 2017 was SEK million. Parkering Malmö considers that this refinancing will make a positive contribution. Large-scale investments mean that borrowing increases at the same pace. Periods of lower levels of investment and increasing capacity utilisation at both new and older parking facilities, which was the case during the period , significantly improved cash flow. Together with cost savings and parking fees paid, this has enabled large additional repayments to be made and provided excellent control over the company s interest rate risk and liquidity risk. This control over these risks provides financial security as the company approaches a new major investment phase. Since its inauguration in 2015, Malmö Live has been a meeting place with a focus on culture for both Malmö residents and outside visitors. With more than 90 musicians from all over the world, together with a well-developed concert and cultural activity, Malmö Live Konserthus is a meeting place that reaches across borders through music. The company promotes the concert house and Malmö as a city of music by developing and supplementing musical life both in the city and in the region. The activity includes the Malmö Symphony Orchestra and the programme areas of events and concerts, meeting place and cultural programme. The activity was fully operated from the premises of Malmö Live for the first time in 2016 and has been further developed during The opportunities provided by the new premises from a programming perspective and other perspectives are far greater than in the activity s history. Hiring out premises is an important part of the activity, both from a financial perspective and from an accessibility perspective. Hiring out premises to external organisers and other parties as well as organising its own events means that a range of experiences can be offered to Malmö residents and visitors. The Okii Nami music teaching spaces opened at the start of the season in September. Okii Nami achieves increased activity for the target group of children and young people through greater cooperation with the business community. The conditional shareholder contribution granted by the owner in March 2016 is used for investments to increase income or reduce costs. The strategies for increasing income are to be considered long-term in nature, with the anticipated result being the doubling of the number of subscribers in the 19/20 season (compared with season 16/17). The number of subscriptions sold is the key to success for MSO concerts. The number of individual tickets sold is low and of lesser total value for MSO concerts. The strategy of doubling the number of concerts in 68

69 order to increase the number of subscriptions is expensive, but the company believes that it will have results in the long term. The shareholder contribution is also used for brand marketing in order to increase awareness among Malmö residents and visitors from the region, the country and the rest of the world of the activity that takes place at Malmö Live. The shareholder contribution of SEK 10 million it is expected to have been fully utilised by Investment in communication and marketing is expected to bring larger audiences to each concert. Children and young people are a prioritised target group for the activity. Cooperation with the business community and savings bank foundations for the activity aimed at young people (040Live) and children (Okii Nami, Symfonikursen Live, Musikkollo Live, etc.) is expected to result in children and young people forming a large part of the increased audience. This company provides professional leasing and vehicle fleet administration and also buys, sells, leases/hires, administrates and manages vehicles and machinery. The company s activity is divided into long-term leasing and short term leasing. Long-term leasing accounts for the majority of the activity s total revenue. The vehicles are divided into five product groups: heavy goods vehicles, passenger vehicles, minibuses, light goods vehicles/vans and a group containing other items such as machinery and trailers. ViSAB has not had any employees. The CEO, secretaries, administration, finance function and purchasers are contracted in from the Service department. In 2017, the board of ViSAB instructed the CEO to investigate the possibility of the company having its own staff and a decision will be made by the company s board in March On 3 May, the City Executive Board adopted the City of Malmö s new eco-car strategy. The new eco-car strategy applies to all administrations and companies of the City of Malmö. Under this strategy, all vehicles must install intelligent speed adaptation (ISA systems). At the same time, the strategy places greater demands on the City of Malmö s vehicle fleet from an environmental perspective. The new eco-car strategy will support the company s work to achieve both safe and environmentally friendly driving in the city. Malmö Stadshus AB has submitted a proposal to the City Executive Board relating to ViSAB s new ownership directive and Articles of Association and a decision on the company s extended mandate, which will include all leasing within the City of Malmö, will be made by the City Council during Over a three-year period, the company must generate an average annual profit margin of at least 2% and in the long term finance its investments within a budget of SEK 200 million, as well as procure additional services that lead to lower costs for the company s customers. In 2018, the company s income from longterm leasing is expected to fall as a result of a reduction in the City of Malmö s internal interest rate from 4% to 3%. The internal interest rate is used to set prices for the company s customers. The company s financing expense is lower than the internal interest rate, which means there is still an earnings margin. 69

70 The aim of the company s operations is to meet the demand for theatre activities, with a primary focus on dramatic theatre, principally through its own ensemble, and to conduct related business. The theatre has a permanent ensemble of actors and gives performances on three main stages: Hipp, Intiman and Unga Teatern s stage Studion. The main stage, Hipp, is housed in the old Hippodromen circus building in the centre of Malmö. The theatre s slightly smaller Intiman stage is next to Malmö Opera at Östra Rönneholmsvägen. At the top of the Hipp building is Unga Teatern and its Studion stage. The company continues its international cooperation. In addition, parts of the activity, in particular Unga teatern, are working to enable technology to be used in performances as an artistic aid to a greater extent than before. There is also a focus on the activity being popular but not populist. Audiences are still finding it difficult to find Malmö Stadsteater and Hipp. The entrance to the theatre is hidden in a passageway and confusion with Malmö Opera is an everyday occurrence. The company has commissioned a preliminary study into how Hipp in particular can be developed as a meeting place. Despite profiling challenges, Malmö Stadsteater continues to have high visitor numbers to its activity. Ticket sales are higher than estimated and costs are slightly lower than expected, giving a positive result that after provision for accelerated depreciation means the activity breaks even. Development at the company is dependent on finding the right repertoire for Malmö audiences and prioritising the activity s resources correctly in relation to the competition to be found in Malmö today. Parkeringsövervakning i Malmö AB was formed in 2016 and is a wholly owned municipal company. The company carries out public-law parking monitoring and other related activity. This involves monitoring public spaces such as streets and squares, vehicle towing and the operation and maintenance of the City of Malmö s parking equipment. The aim is to maintain a trafficable and accessible city for its residents and visitors. The activity is not carried out in order to make a direct profit, but must be run along commercial principles. Parking monitoring in Malmö s environmental policy contains guidelines for how the company must continuously integrate environmental aspects into its activity. By taking environmental responsibility for its own vehicles, transport and driving, the company s activity will reduce exhaust emissions and help to minimise environmental impact. This is achieved through continuous development work, by choosing environmentally certified goods and adapting services to the activity, as well as by complying with relevant environmental legislation and instructions. The company began operations on 1 September 2016, making 2017 the first full year of operation for the company. A great deal of work has been done in order to establish a well-functioning organisation. The 70

71 company s three branches of activity, which are carried out under agreements with the Technical Committee of the City of Malmö, are municipal parking monitoring, vehicle towing and ticket service. The company s net revenue was SEK 37.8 million. Profit before appropriations and tax is SEK 1,000 (359). Profit after appropriations and tax is SEK 201,000 (0). The company s first full year of operation was For most of 2016, the company was considerably understaffed in terms of parking wardens. There were 17 new appointments in 2017 and further recruitment is planned in The company s employee-intensive organisation means that there must be a major focus on having a good work environment. Further initiatives with regard to the work environment are planned for Boplats Syd AB allocates tenant leasehold properties from landlords to people seeking accommodation throughout Skåne. Landlords are both private and public housing companies. Apartments are allocated using an open and transparent system to the customer who has been waiting longest and who meets the landlord s requirements. In 2017, Boplats Syd carried out a survey for the first time to find out how satisfied customers are with the allocation service and other services provided by the company. The results are presented as an NKI (Satisfied Customer Index), and showed that the landlords are very satisfied (NKI 76) and those seeking accommodation are satisfied (NKI 54). During the year, Boplats Syd allocated over 5,900 apartments and worked with 35 landlords in eight municipalities. Of these, three are municipal companies: MKB Fastighets AB in Malmö, Trelleborgshem in Trelleborg and in 2017 Vellingebostäder also chose to affiliate itself with Boplats Syd. More municipal companies will need to join in order for the company to have a serious reach outside Malmö. The organisation of the allocation activity in a municipal company opens up new channels for such cooperation. The number of people in the housing queue at Boplats Syd increased by 10,316 people to 80,864 in This is an increase of almost 15% compared with the previous year, but the proportion of those actively seeking accommodation (applying for 10 apartments or more per year) remains at just over 20%. All of Boplats Syd s activity is based on a foundation of trust and transparency so all customers, property owners and applicants can be certain that allocations are made in a proper manner. In summer 2017, it was discovered that the system had been exploited and waiting times manipulated. Extensive work was needed in order to investigate what had happened and who had received an apartment incorrectly. The company is unable to take action against those who received apartments incorrectly until the police have concluded their work. Boplats Syd has focused on compensating the 28 applicants who missed out on apartments because somebody else moved ahead of them in the queue. Almost all those affected have received other apartments and the company has also reviewed all of its procedures and systems. It is too early to determine the seriousness of the damage this incident has caused. So far, however, Boplats Syd has not seen any indications of property owners or applicants leaving the company. 71

72 Minc has developed to become a startup house and carries out activities of particular importance for this development. The Fast Track Malmö Accelerator took place for the second time during the spring and was named Sweden s Best Accelerator during the year. Minc Game was launched in the spring and enjoyed strong development during the year and will continue in The third Nordic Female Investor Meeting was held in autumn, with the aim of reaching out to more female investors. The event had a major impact and is proposed to be held again in Minc had several prominent visitors during the year, with the visit of the Swedish king, together with The Royal Swedish Academy of Engineering Sciences, gaining the most attention. Minc achieved strong media penetration during the year and has reached readers both in Sweden and internationally. The incubator and Startup Labs have continued to see a good inflow of entrepreneurs. Minc continues to work to make Malmö Europe s best place for early-stage startups to establish and run companies. There is a focus in 2018 on reaching more female entrepreneurs, with the aim that half of the companies in the incubator have at least one female founder. There is also a particular focus on reaching out to more entrepreneurs with a broader perspective. This will be done through a new service that will collaborate with various stakeholders in Malmö. More extensive collaboration with Malmö University will also be developed during the year. As the company reaches out to more potential entrepreneurs, space is also being made for more early-stage entrepreneurs through the redevelopment of the reception area, where a Status Lounge will be opened in March. This lounge will provide the opportunity to sit and work and have contact with Minc without any specific requirements for company formation for example. CMP s business concept is to sell port, terminal and transport solutions. In simple terms, the idea is to match areas with activities, where land and premises provide a rental income, the docks a port income and all other handling a handling income. CMP AB leases the City of Malmö s port facilities and Udviklingsselskabet By & Havn I/S the port facilities in Copenhagen. These leases run up to and including Since the beginning of 2011, the City of Malmö has been a direct owner of CMP AB, with a shareholding of 27.5%. Geographically, operations take place in the Copenhagen and Malmö port area. In 2018, the activity will also include the port area of Visby on Gotland, where a cruise terminal has just been constructed. 72

73 CMP s revenue for 2017 was SEK million (812.1), which was an increase of SEK 27.4 million compared with the previous year. Excluding exchange rate effects of SEK 11.5 million, the increase in revenue was SEK 15.8 million, which is a rise of 1.9% excluding exchange rate effects. The improvement in sales excluding exchange rate effects is mainly the result of increased volumes within the Cruise & Ferry business area, where revenues increased by SEK 38.5 million, or 23.7%, excluding exchange rate effects. Within this business area, the Cruise segment accounts for the majority of the increase, which is the result of more calls at port and larger vessels carrying more passengers. The Port & Terminal Operations and the Liquid and Dry Bulk & Property business areas had very small changes in revenue compared with The business area, other than Cruise & Ferry, that had slightly larger changes was North Harbour, which increased its revenue by SEK 11.0 million or 14.8%. The main reason for this is that container activity at Norra hamnen in Malmö increased as a result of an industrial dispute during the summer at the Port of Gothenburg. The increase is also the result of work carried out to exploit various commercial opportunities. Operating profit for 2017 was SEK 77.9 million (43.2). This represented an operating margin of 9.3% (5.3) and an improvement in operating profit of SEK 34.7 million compared with The outcome includes exchange rate effects of SEK 1.4 million. The improvement in operating profit is partly the result of increased sales and efficiencies, but also to a large extent of the additional costs of around SEK 17 million incurred in the comparison year of 2016 through CMP s attempt to find an external operator for parts of the operations at North Harbour. A further reason is that the interest element of the base rents of around SEK 9 million was reclassified from cost of goods sold to interest expenses. The difference in net financial items is the result of the increased interest expenses attributable to the reporting of the base rent in the consolidated financial statements in 2017 as described above. Otherwise interest expenses increased slightly as a result primarily of investments in cranes. Over the past few years, CMP has distributed 25% of unrestricted equity to shareholders. The board and the CEO propose that no dividend be paid this time. The proposed level is based on the fact that CMP should take into account the major upcoming investments for the company and that the equity ratio has not achieved the dividend policy s threshold of 40%. The company sees a positive future for itself, despite strong competition. This positive outlook is based on CMP s geographic location, the company s practical facilities and the commercial networks it has developed. Through these key factors for success, CMP has achieved a strong position in a number of business segments and markets. This creates the conditions for favourable development in the years ahead. Sysav is owned by 14 municipalities in southern Skåne. Sysav has two wholly owned subsidiaries, Sysav Industri AB and Sysav Utveckling AB. The group also includes six associate companies. Sysav is responsible for regional waste management and recycling in southern Skåne. The parent company, Sysav, Sydskånes avfallsaktiebolag, deals with household waste from the 14 owner municipalities. The subsidiary Sysav Industri AB deals with combustible household waste from municipalities and areas outside the Sysav region and from companies and activities. The collection and 73

74 transportation of the waste to facilities is undertaken by the part-owner municipalities and contractors. The subsidiary Sysav Utveckling AB finances and runs projects aimed at increasing recycling and reducing landfill. The transfer of the service concessions for the collection of household waste in Lomma, Kävlinge and Svedala took place during the first half of The aim was that the transfer would not lead to any negative experiences for households. Major communications initiatives were implemented in connection with the transfer in the form of campaigns and digital services, particularly in Svedala municipality, which made the transition to four-compartment bins at the same time. Work continued on corporate and safety culture during All employees completed a one-day training course on the subject of the environment and the work environment during the year, which covered issues such as sustainable working life and health-promoting measures. The group s revenue was SEK million (876.7), the operating profit was SEK 90.2 million (150.9) and the profit before appropriations and tax was SEK 71.0 million (134.5). The parent company s revenue for the year was SEK million (425.6), the operating loss was SEK million (-34.6) and the loss before appropriations and tax was SEK million (-55.2). The group s total assets were SEK 2,260 million (2,233 million). The balance sheet includes the leased asset in line 4 in the waste-to-energy plant. The lease costs are recognised under the company s other external expenses. The revenue for the volumes of household waste received increased marginally compared with the previous year. The corresponding revenue for industrial waste increased by over 3%, primarily because of slightly higher prices and larger volumes of combustible waste coming from Sweden and contaminated materials. The regional market for industrial customers has generated large volumes of waste over the past year, probably linked to the current economic boom. There has been a further slight fall in the proportion of imported combustible waste. The group s combustion lines had an average availability of 95% during the year, with record-high deliveries of production and energy. Income from material sales of metals and scrap increased by just over 25% compared with the previous year. After deduction of comparison-distorting items such as net reversal/provisions in the fund for leachate handling and costs for service concessions, the operating and maintenance costs are at the same level as the previous year. Provisions made for the year for the handling of future leachate from landfill were SEK 14.0 million. Provisions utilised from the fund amounted to SEK 7.6 million and the cumulative provisions at the balance sheet date were SEK million (270.0). Staff costs fell compared with the previous year, among other things because of the dissolution of pension liability in the amount of SEK 3.5 million. Scheduled depreciation increased compared with the previous year. Sysav s role in developing a sustainable region occupies a prominent position in all discussions about the future and the activity is developed with a strong focus on social and commercial benefit. 74

75 Sydvatten AB has the task of preparing and distributing drinking water of a high and consistent quality to its owner municipalities. For this purpose the company utilises the raw water sources of Bolmen, Vombsjön and Ringsjön. Sydvatten s water rights in the lakes constitute a significant asset for the company. The company owns and operates the Bolmen tunnel, Ringsjö works and Vomb works, as well as the main piping system for the distribution of drinking water. The City of Malmö owns 34.05% of the shares in Sydvatten AB In its judgment issued in the autumn in the case against Statkraft, the Swedish Land and Environmental Court of Appeal ruled that Sydvatten must pay compensation of SEK million to Statkraft. This compares with the earlier judgment in 2016 of the Swedish Land and Environmental Court of Appeal, where Statkraft was awarded compensation of SEK 450 million. Both parties have appealed against the judgment to the Supreme Court. A new strategic multi-year plan was drawn up for the company during the year. The main and long-term focus is to increase delivery reliability by developing redundancy both in raw water resources and in production and distribution. A prerequisite for this is to enable the use of water from Lake Bolmen at the Vomb facility. This provides redundancy in the raw water supply at both production facilities as well as the conditions for increasing production capacity at Vomb and therefore opportunities for redundant production. A new crisis plan was also drawn up during the year, following a review of the company s contingency planning and procedures in the case of undesirable events. The new crisis plan clarifies roles and indicators and also contains instructions for the handling of crisis situations. Construction is underway on the raw water pipe between Äktaboden and Ringsjöholm and is now entering its third phase. The budget is SEK 450 million. Extensive archaeological work is being carried out, resulting in a delay to the completion of the project, which is now estimated to be ready during the first half of Discussions have been held with Båstad on the municipality s drinking water supply since In 2017, an agreement on entry into part ownership was drawn up and Båstad approved this agreement in December. The process of Båstad s entry into part ownership now continues with the decisions of all the part-owner municipalities and the subscription of newly issued shares at the company s annual general meeting in Water distribution to the municipalities totalled 75.7 million cubic metres (77.4). Residents and businesses in Sydvatten s part-owner municipalities received a reliable supply of good-quality drinking water during the year. The investment volume for the year was SEK 293 million (148). The age of the facilities and the need for development mean initiatives are required in the form of both new investment and reinvestment in order to ensure the quality of the future supply. The board has therefore drawn up an investment plan of around SEK 3,000 million for the next decade. As part of Sydvatten s work to establish an equal supply structure for the owner municipalities, a new water pipe is being laid to secure the water supply to Eslöv municipality. The pipe is 5.6 km long and is being constructed between Kävlinge and Örtofta. An appeal was submitted against the piping rights, which led to 75

76 a hearing at the Swedish Land and Environmental Court in March. This resulted in a delay to the start of construction. The total budget is SEK 25 million and the pipe is expected to be completed during A review was carried out of the financing requirement for the current and coming years and Sydvatten arranged new loans totalling SEK 250 million. These have been used partly for investment in the raw water pipe between Äktaboden and Ringsjöholm (SEK 450 million in total) and partly for the purchase of land in Vomb (SEK 80 million). A loan of SEK 121 million has also been refinanced. The main focus on raw water issues, including water protection, long-term water management, etc., which was the main focus of the 2011 strategic plan, will remain central and prioritised issues in the future. Communication activities will be further developed, with new forms of communication established to increase understanding of the value of water as well as smarter and more sustainable water use. VA Syd is a municipal association consisting of the water and sewage activities in Malmö, Lund, Burlöv and Eslöv. In addition to water and sewage matters, the association is also responsible for waste management in Malmö and Burlöv. Work on the Regional Sewage Treatment Programme (RAR) entered a more intensive phase. The programme involves the closure of the Källby sewage treatment plant in Lund, new sewage pipes from Lund to the Sjölunda sewage treatment plant in Malmö and the expansion and modernisation of Sjölunda. The work also includes the management of the low-pressure sewer system in parts of Malmö. An extremely large number of parties are involved in and affected by this work. A local sustainability contract for Sofielund was signed in February, together with several other parties. This means that initiatives implemented in the Sofielund district must have a direct impact on one of the UN s 17 global sustainable development goals. The parties will collaborate on work to create a more sustainable Sofielund, with initiatives to deal with issues such as waste management, cloudburst problems and bluegreen solutions for surface runoff handling. In March, VA SYD issued a large-scale recommendation to boil water, which covered the entire Lund urban area as well as a number of smaller towns outside Lund and neighbouring towns in Eslöv municipality. The reason for this was that VA SYD discovered coliform bacteria during an inspection it carried out inside one of its properties. Measures were taken and an extensive search was begun to find the cause of the bacteria. After a few days, VA SYD was able to narrow down the area to a smaller part of the western and central high zone of the city of Lund. It was not until 10 April that the month-long recommendation to boil water could be lifted for the affected parts of the city of Lund. Just over two weeks later, Region Skåne also lifted the recommendation to boil water that had remained in place for hospitals. The incident report, which was drawn up by an external investigator, showed that the problem had arisen because of a mistake by an external contractor during planned pipe work in December Investigations found wheat flour in the pipe in question, which had acted as a breeding ground for coliform bacteria. VA SYD is continuing its work to ensure that the company stipulates even clearer requirements for how pipe work is to be carried out in the pipe network in the future. New major collection contracts began in April. The collection of waste in bins from multi-occupancy housing and businesses in half of Malmö is now handled by RenoNorden and the collection of waste from house bins in half of Malmö has been taken over by Ohlssons. Ohlssons also took over the contract for the collection of waste in containers and underground receptacles for the entire area. 76

77 Exciting challenges lie ahead for VA SYD that will involve an ongoing need to attract, recruit and retain staff. To help it attract and recruit, VA SYD is taking active measures to increase its social media presence and involvement in various industry days and jobs market days. The company continuously develops what it offers as an employer so as to be an attractive employer for its staff. Rescue Services South is a municipal association in which the rescue services for Burlöv, Eslöv, Kävlinge, Lund and Malmö are organised and operated. The area of activity is aimed at preventive work designed to prevent and limit accidents in the community, as well as to prepare and carry out rescue services in an effective manner. In 2017, Rescue Services South, under the leadership of a new association director, began work on organisational change in order to achieve more effective management and to improve the work environment in the organisation. This organisational change also aimed to promote enhanced cooperation with the member municipalities and other stakeholders, as well as to better adapt the company s work to the local risk picture and the needs of the local community. As the rescue services are a vital societal function, work was also begun on continuity management. This involves analysing the need for backup operation and procedures so that the function of the rescue services can be maintained, even in the event of serious social disruptions. There has been a particular focus on being prepared to handle events involving intentional violence and large-scale injury and damage, such as terrorist incidents. A great deal of energy has been devoted to joint authority supervision in preventive work, which has achieved good results, particularly in the autumn. Financially, 2017 brought a surplus of SEK 465,000. This result includes, for example, increased income in the form of subsidies for targeted measures within Safe Malmö, slightly reduced staff costs as a result of vacancies, as well as increased costs for supplementary equipment and repairs to leased premises and the Barbara exercise area. Rescue Services South is facing financial challenges in 2018 and 2019, as the need to purchase vehicles as well as increased premises and pension costs take up a large portion of the association s budget, while the member municipalities have also indicated that there is limited scope for increased member fees. For 2018, this means that the association, at the request of the members, decided on a budgeted shortfall, where the deficit can be covered using equity. This is not sustainable in the long term, of course, and all income and expenses must be reviewed before 2019 in order to achieve a balance. At the same time, the rescue services need to rebuild expertise and ability for their duties during a high alert and to prepare for tasks as part of total defence planning. 77

78 Amounts in SEK million PROFIT/LOSS Budgeted result 261 Deviation from budget 848 Profit/loss DEVIATIONS FROM BUDGET City council 0 Board of auditors 0 Election Committee 0 Health and Medical Advisory Board 0 Chief Guardians Committee 1 City Executive Board 129 Service Committee 97 Technical Committee 28 Gains on the sale of property 355 Environment Committee 2 City Planning Committee 16 Housing adaptation grants 9 Upper Secondary & Adult Education Committee 9 Compulsory Education Committee -9 Preschool Committee -3 Culture Committee 5 Leisure Committee -1 FINANCING Health, Care and Social Care Committee 0 Taxes & general subsidies 158 Disability Support Committee -33 Interest and dividends 5 Personal assistance under SFB 19 Staff costs/pensions 48 Labour Market & Social Welfare Committee -142 Committees dissolved 41 Homelessness -86 Disposable allocations 108 Economic assistance -13 Social investments -4 State subsidy for refugees 54 Premises & facilities 58 Committees dissolved in Companies and municipal associations 38 Financing 452 Total financing 452 Total 848 COMMITTEES DISSOLVED Profit/loss Jan Apr* CD North -12 CD East -24 CD South -27 CD West 4 CD Inner City -13 Social Resource Committee 31 Total -41 Financing 41 * ) Profits and losses arising in committees that have been dissolved have been transferred as a special case to the new organisation, via Financing. Profit and loss includes all municipal contribution frameworks for which the committees were responsible. 78

79 Amounts in SEK million CITY OF MALMÖ COMPILED ACCOUNTS Note Operating income Operating expenses Depreciation Net operating expenses Tax income General state subsidies and equalisation Financial income Financial expenses Profit/loss before extraordinary items Extraordinary income Extraordinary expenses Tax/deferred tax PROFIT/LOSS FOR THE PERIOD Intra-group financial conditions can be found in note 23. The compiled accounts include the Copenhagen Malmö Port group with information not yet adopted. 79

80 Amounts in SEK million ASSETS CITY OF MALMÖ COMPILED ACCOUNTS Note 31/12/ /12/ /12/ /12/2016 NON-CURRENT ASSETS Intangible non-current assets Property, plant and equipment Land, buildings & technical plant Machinery & equipment Financial non-current assets Total non-current assets GRANTS FOR INFRASTRUCTURE Grants for infrastructure Total grants for infrastructure CURRENT ASSETS Inventories, etc Receivables Short-term investments Cash and bank balances Total current assets TOTAL ASSETS EQUITY, PROVISIONS AND LIABILITIES EQUITY Profit/loss for the year Profit equalisation reserve Other equity Total equity PROVISIONS Provisions for pensions and similar obligations Other provisions Deferred tax liability Total provisions LIABILITIES Non-current liabilities Current liabilities Total liabilities TOTAL EQUITY, PROVISIONS AND LIABILITIES PLEDGED ASSETS AND CONTINGENT LIABILITIES Pledged assets and equivalent collateral Contingent liabilities Pension obligations not recognised as liabilities or provisions Other contingent liabilities Intra-group financial conditions can be found in note 23. The compiled accounts include the Copenhagen Malmö Port group with information not yet adopted. 80

81 COMPILED CITY OF MALMÖ Amounts in SEK million ACCOUNTS Note OPERATING ACTIVITIES Profit/loss for the year Adjustment for depreciation and w rite-dow ns Adjustment for the dissolution of investment contributions Adjustment for the dissolution of grants for infrastructure Adjustment for capital gains/losses 9, 10, Adjustment for development gains Adjustment for pension provisions Adjustment for other provisions Adjustment for appropriations and deferred tax Adjustment for other non-cash items Net cash flow from operating activities INVESTING ACTIVITIES Investment in intangible non-current assets Investment contributions received Sale of intangible non-current assets Investment in property, plant and equipment 9, Sale of property, plant and equipment 9, Investment in financial non-current assets Sale of financial non-current assets Net cash flow from investing activities FINANCING ACTIVITIES Increase in non-current liabilities, borrow ing Decrease in non-current liabilities, borrow ing Increase in non-current receivables Decrease in non-current receivables New share issues Net cash flow from financing activities TIED-UP CAPITAL Increase/decrease in stocks and inventories Development Sale of development land Increase/decrease in current receivables Increase/decrease in current liabilities Net cash flow from tied-up capital CASH FLOW FOR THE PERIOD Cash and cash equivalents at beginning of the year Cash and cash equivalents at the end of the period Interest-bearing net assets/liabilities at the beginning of the year Increase/decrease in interest-bearing receivables Increase/decrease in cash and cash equivalents Increase/decrease in interest-bearing liabilities Interest-bearing net assets/liabilities at the end of the year In the compiled accounts, the amounts for the closing balance 2016 do not match the opening balance 2017 due to changes in shareholdings in VA Syd. 81

82 The annual report is drawn up in accordance with the Swedish Municipal Accounting Act and the recommendations of the Swedish Council for Municipal Accounting (RKR) unless otherwise stated. The regulations and standards that apply to other sectors of society, and which are included in the concept of generally accepted accounting practices, are also observed. This means, among other things, that: Income is recognised to the extent that it is likely that the financial assets will accrue to the municipality and the income can be measured reliably. Receivables have been recognised at the amount at which it is expected they will be received. Assets and liabilities have been recognised at cost unless otherwise stated. Accruals of income and expenses have been recognised in accordance with generally accepted accounting practices. The same accounting principles were applied in 2017 as in Comparative figures for 2016 have been adjusted as a result of a changed approach to how an ongoing rental agreement between the City of Malmö and Copenhagen Malmö Port AB is to be reported. The agreement contains a clause on the annual escalation of rental income during the term of the agreement. The assessment has now been made that the average rental income should be reported in the financial statements on a straight-line basis for the entire term of the agreement. An adjustment in the accounts of SEK 118 million has been made directly in equity in relation to rental income for the period During the year, it was discovered that a non-current asset that was brought into use in 2008 was not capitalised in the accounts and therefore no depreciation has been applied. This was corrected in 2017 with a depreciation cost of SEK 18 million for the period The correction has been recognised directly in equity in accordance with RKR 14 Change of accounting principles, changes in estimates and assessments and correction of errors. No conversion of comparative figures for previous years has been made, as the adjustment does not constitute a significant amount. Comparison-distorting items are reported separately as they arise in notes to the respective item in the income statement and/or in the cash flow statement. Items which rarely occur and which amount to significant sums are regarded as comparison-distorting. The accounting model includes: Income statement showing the income and expenses for the period, as well as the change in equity. Balance sheet showing the financial position on the balance sheet date. Cash flow statement showing how activities have been financed. Operating report showing the outcome compared with the budget for each area of responsibility. Investment report showing the investment expenses and investment contributions for the year of each area of responsibility. 82

83 Income and expenses are accrued to the year when the goods are delivered, the service carried out or the event occurs. Wages and employee remuneration are accrued. Overtime worked and compensation not taken for being on duty and on standby are recognised as a liability. Annual leave earned but not taken is recognised as a liability, as is earned holiday pay and paid leave, respectively, for teachers and other similarly employed. The holiday pay liability is calculated individually for all personnel categories. Social security expenses are calculated on the basis of the coming year s level. Internal items are included in the operating and investment reports (see pages 110 and 112). Financial income and expenses, as well as depreciation, are included at committee level in the income and expenses columns respectively. Internal items have been eliminated in the income statement and on the balance sheet (see pages 79 and 80). All leases entered into in or before 2011 are classified as operating leases. Leases entered into after 2011 are subject to the regulations under RKR 13.2 Accounting of rental/lease agreements. The City of Malmö has no agreements, however, which meet the criteria for finance leases. Agreements regarding vehicle hire concluded with Vagnparken i Skåne AB do not fully satisfy the requirements of a finance lease. As a general rule, these agreements are regarded as purely rental agreements or as operating leases. Depreciation of property, plant and equipment is applied for the estimated useful life using straight-line depreciation based on the cost less any residual value. No depreciation is applied to assets in the form of land, works of art and work in progress. Depreciation is calculated and recognised from and including the month after acquisition or when the asset is brought into use. Component depreciation is applied to buildings and technical equipment with the following depreciation periods: Non-current asset Number of components Depreciation period Buildings 9 15, 20, 30, 40, 75 and 100 years Public properties (streets, roads and parks) 2 to 3 5, 8, 10, 15, 20, 30, 40, 60, 75 and 120 years Port facilities 2 to 3 5, 10, 20, 30, 40 and 75 years Machinery and equipment is depreciated over 3, 5, or 10 years. The provisional final settlement for tax income is based on SALAR s December forecast in accordance with RKR 4.2 Recognition of tax income. 83

84 Ongoing investment and development projects with a term exceeding six months are charged loan costs in accordance with the alternative method in RKR 15.1 Accounting of loan costs. Interest on capitalised loan costs is calculated on the basis of the municipal group s borrowing costs. The average interest rate during 2017 was 0.58% (0.83%). In total during the year, interest of SEK 10 million (SEK 16 million) has been capitalised. The loan costs capitalised during 2017 are less than the total external loan costs. No income or expenses have been recognised as extraordinary items during 2017 or Non-current assets intended for permanent use or possession with a useful life in excess of three years and a cost excluding value-added tax that corresponds to at least one base amount are classified as non-current assets. This applies to both tangible and intangible assets and to any finance leases. Non-current assets are recognised on the balance sheet at cost less depreciation. Investment contributions and street cost payments are recognised as prepaid income and are recognised in non-current liabilities. Income is accrued over the useful life of the non-current asset in order to match depreciation. Investment contributions relating to investments made before the 2010 financial year have reduced the cost of non-current assets. Under the Swedish Municipal Accounting Act, grants for public infrastructure can be recognised on the balance sheet provided that they fall within the scope of the Swedish Act on Certain Municipal Powers (2009:47). The grant can be dissolved over no more than 25 years. In 2011, the city council approved grants for public infrastructure in relation to Malmöringen. The investment is estimated at SEK 65 million and dissolution will take place over 25 years. In 2017, the city council additionally approved grants for public infrastructure in relation to Malmöringen of SEK 31 million with dissolution to take place over 25 years and of SEK 30 million to be recognised as a cost in the 2017 income statement. Current assets are recognised at the lower of cost and fair value. Invoice receivables that are more than three months old are considered doubtful. If there is no payment plan that is followed, the receivables are written down in the accounts. Under the Swedish Municipal Accounting Act, pension obligations are to be recognised in accordance with the so-called mixed model. This means that: Pension benefits earned before 1998 are recognised as contingent liabilities. Guaranteed and fixed-term pensions, as well as pension benefits earned from 1998 onwards, are recognised on the balance sheet as provisions for pensions and similar obligations. The majority of pension benefits earned from the year 2000 onwards may be invested individually by employees. These are recognised as current liabilities until disbursement is made at the end of March the year after being earned. Liabilities for pension obligations for employees of the municipality are calculated in accordance with RIPS

85 The right to a fixed-term pension and transition support (in accordance with OPF-KL) for elected representatives is recognised as a contingent liability because it is not considered likely that it will lead to disbursements. When it is considered probable that disbursements will be made, the items are instead recognised as provisions. Provisions can only be made for legal obligations. A provision is a liability where the due date or amount are uncertain. According to RKR 20 Recognition of financial assets and financial liabilities, a liability shall be classified as current when it falls due within twelve months calculated from the balance sheet date or when it is expected to be paid within the normal course of the municipality s business cycle. All other liabilities shall be classified as non-current. The portion of the City of Malmö s long-term loans that falls due for payment during the coming year is calculated as being refinanced in its entirety and is more than 100% covered by agreed credit reserves and may therefore continue to be classified as non-current in the accounts. The coming year s repayments are recognised as current liabilities. Within the city, financial activity is conducted by the Internal Bank at the city office s finance department. All borrowing from and lending to the city s companies takes place through this entity. All companies are offered borrowing and investment on market terms. No capital injections, interest-only loans or loss contributions have been provided to these companies. Finance activities within the municipal group are governed by the city council s financial regulations and the City Executive Board s Finance Policy. The city utilises financial derivative instruments in order to hedge positions against exchange rate and interest rate fluctuations. RKR 21 Hedge accounting stipulates that outstanding financial derivatives are not measured in accordance with the lowest value principle. Purchases or sales of financial assets or liabilities are recognised on the settlement date. Financial current assets and current liabilities are measured at cost. Any issue expenses and similar transaction costs are accrued over the term of the underlying transaction. Under the Swedish Municipal Accounting Act, the annual report must also contained compiled accounts. The term compiled accounts is most closely synonymous with consolidated accounts. The aim of the compiled accounts is to provide an overall picture of the activities and financial position of the municipality and the municipal businesses. The compiled accounts must include companies in which the City of Malmö holds, directly or indirectly, at least 20% of the voting rights, in accordance with the definition of significant influence in RKR 8.2 Compiled accounts. Under RKR 8.2 Compiled accounts, companies that conduct activity of insignificant scope may be excluded. Insignificant scope is defined as companies where the municipality s share of revenue and assets is less than 2% of tax income and general state subsidies. The combined municipal share of the revenue/assets of companies that are excluded may not, however, exceed 5% of tax income and general state subsidies. This 85

86 means that MINC i Sverige AB, Medeon AB, BoPlats Syd AB and Kommunassurans Syd Försäkrings AB are not included in the compiled accounts despite the City of Malmö having a shareholding in the companies in excess of 20%. In addition to the above, the following legal entities are also not included in the City of Malmö s compiled accounts: Foundations, due to their activity being of insignificant scope according to the above definition Donations. Dormant companies (AB Folkets Park, Kungsparken AB and Malmö Frihamn AB). The information in the compiled accounts for 2017 is based on annual accounts not yet adopted in relation to Copenhagen Malmö Port AB. Comparative figures for 2016 are based on adopted annual accounts and have been adjusted where applicable. The companies annual accounts are prepared in accordance with the Swedish Annual Accounts Act and the Swedish Accounting Standards Board s general guidance BFNAR 2012:1 Annual Accounts and Consolidated Accounts (K3). In the event that the accounting principles differ between the municipality and the companies, the municipality s accounting principles shall have priority for the preparation of the compiled accounts. The municipal associations comply with the same accounting standards as the municipality. The compiled accounts for 2017 include the write-up of a building by SEK 9 million, which derives from the accounts of Copenhagen Malmö Port AB. The municipal accounting standards prohibit the write-up of property, plant and equipment. As the write-up does not constitute any significant amount, no adjustment has been made to the municipal accounting principles. Proportional consolidation is applied, which means that the accounts include only the proportion of the income statements and balance sheets of the companies that corresponds to the municipality s share of ownership. Associated companies that are included in consolidated accounts with regard to SYSAV, Copenhagen Malmö Port AB and MKB Fastighets AB are recognised using the equity method. This means that the group s share of the net assets of associated companies is recognised on a line on the balance sheet. In other cases where there are sub-groups, the annual accounts of the sub-groups have been fully consolidated, as the companies in these sub-groups consist primarily of wholly owned companies which have not been subject to internal acquisitions. For other subsidiaries, the carrying amount of the shares held by the City of Malmö (the parent company) in the subsidiaries is eliminated against the equity of the subsidiaries in accordance with the purchase method. Receivables and liabilities between companies in the compiled accounts have been eliminated in proportion to the size of the shareholding. Malmö Stadshus AB is wholly owned by the City of Malmö. Malmö Stadshus AB in turn owns all the shares in Malmö Stadsteater AB, Malmö Live Konserthus AB, Vagnparken i Skåne AB, Minc i Sverige AB, Malmö kommuns parkeringsaktiebolag, Parkeringsövervakning i Malmö AB, BoPlats Syd AB and MKB Fastighets AB. Minc i Sverige AB and BoPlats Syd AB are not included in the compiled accounts as the companies fall below the threshold values, see above. 86

87 The subsidiaries untaxed reserves have been recognised in the compiled balance sheets partly as equity (78%) and partly as deferred tax (22%). In the compiled income statements, the subsidiaries appropriations, excluding deferred tax, have been reversed and are included in the item Change in equity. According to the accounting principles that apply to group companies, the cost of non-current assets shall be reduced by any investment contribution before calculating depreciation. This accounting principle is different from that of the municipality, where investment contributions are included as prepaid income and recognised in non-current liabilities. If the accounting principles of the group companies differ from those of the municipality, they shall be adjusted prior to consolidation in accordance with RKR 8.2 Compiled accounts. All companies and municipal associations included in the compiled accounts and which own non-current assets with identifiable components with different useful lives apply component depreciation. As each company makes its own classification of components, there is no one standard rule. Buildings are broken down into components with a depreciation period of years. Component depreciation is not applied to machinery and equipment. The depreciation period is 3, 5 or 10 years. Amounts in SEK million CITY OF MALMÖ COMPILED ACCOUNTS Sales proceeds Fees and charges Rents and leases Subsidies Operations and contracts Development income Capital gains Other revenue Total operating income Comparison-distorting items Repayment from AFA

88 Amounts in SEK million CITY OF MALMÖ COMPILED ACCOUNTS Staff costs excl. pension costs Pension costs Subsidies paid Purchase of core business Rent for premises and land Materials, services and other operating expenses Book values of development areas sold Capital losses and disposals Total operating expenses Comparison-distorting items Costs for damages in connection w ith cloudburst Ersättning till Kommunassurans Syd Försäkrings AB Amounts in SEK million Land, buildings & technical plant CITY OF MALMÖ COMPILED ACCOUNTS Machinery and equipment Of w hich due for payment w ithin 1 year Of w hich due for payment w ithin 1 5 years Of w hich due for payment after more than 5 years The City of Malmö has no leases classified as finance leases. Finance leases relate to Copenhagen Malmo Port. Information about future minimum lease payments by due date refers to total amounts for all asset types. Amounts in SEK million Machinery and equipment The total amount of future minimum lease payments is: Due for payment w ithin 1 year Due for payment after 1 year but w ithin 5 years Due for payment after more than 5 years No information is available for the Copenhagen Malmo Port group. Rental agreements The total amount of future minimum rental agreements is: Due for payment w ithin 1 year * * Due for payment after 1 year but w ithin 5 years * * Due for payment after more than 5 years * * *Information unavailable for the compiled accounts. CITY OF MALMÖ COMPILED ACCOUNTS 88

89 Amounts in SEK million CITY OF MALMÖ COMPILED ACCOUNTS Intangible non-current assets Land, buildings & technical plant Machinery and equipment Total depreciation and write-downs The amount in the compiled accounts includes the reversal of write-downs made in previous years by SEK 30 million (SEK 34 million). In the compiled accounts, there is a discrepancy in the depreciation between the income statement and the balance sheet. This discrepancy is attributable to VA Syd. Amounts in SEK million CITY OF MALMÖ COMPILED ACCOUNTS Preliminary tax income Correction of forecast final settlement for Forecast final settlement for Total tax income Amounts in SEK million CITY OF MALMÖ COMPILED ACCOUNTS Income equalisation Cost equalisation Structural contribution Adjustment contribution/fee LSS equalisation State subsidy for housing construction Temporary state subsidy for refugees Temporary state subsidy, Sw edish Migration Agency Property fee Preliminary Forecast final settlement for Correction of forecast final settlement for Total general state subsidies and equalisation

90 Amounts in SEK million Interest on cash and cash equivalents Interest on loans made Dividend on shares in group companies Other interest and financial income Total financial income Of the City of Malmö s interest income from loans of SEK 88 million (SEK 102 million), SEK 87 million (SEK 101 million) relates to group companies as follows: Amounts in SEK million CITY OF MALMÖ CITY OF MALMÖ MKB Fastighets AB Vagnparken i Skåne AB, VISAB 3 3 Malmö Kommuns Parkerings AB 9 11 VA Syd Malmö Live Konserthus AB 1 1 COMPILED ACCOUNTS Amounts in SEK million CITY OF MALMÖ COMPILED ACCOUNTS Interest on long-term borrow ing Capitalised loan costs Interest on pension liability Other financial expenses Total financial expenses Comparison-distorting items Reduced discount rate for pension provisions Amounts in SEK million CITY OF MALMÖ COMPILED ACCOUNTS Carrying amount at the beginning of the yea Sales and disposals Investments Impairment and w rite-dow ns Reclassification of assets Carrying amount at the end of the year

91 Amounts in SEK million CITY OF MALMÖ COMPILED ACCOUNTS Land reserve and development land Properties for operations Properties for commercial activities Public properties Properties for other activities Other properties Ongoing investment projects Total land, buildings & technical plant Carrying amount at the beginning of the year Sales and disposals Investments Depreciation and w rite-dow ns Reversed w rite-dow ns Reclassification of assets Carrying amount at the end of the year The sales and disposals for the year in the table are broken down as follows: Carrying amount of assets sold SEK 5 million (SEK 4 million) Carrying amount of scrapped assets SEK 7 million (SEK 19 million) Carrying amount of remediation costs SEK 0 million (SEK 43 million) Sales for the year in the table refer to the carrying amount of assets of SEK 5 million (SEK 4 million). The total sales proceeds are SEK 185 million (SEK 109 million) and are reported as follows: Carrying amount of assets SEK 5 million (SEK 4 million) Capital gains on sales for the year SEK 180 million (SEK 105 million) Total reported capital gains and disposals of SEK 173 million (SEK 86 million) are broken down as follows: Capital gains on sales for the year SEK 180 million (SEK 105 million) Disposal of assets SEK -7 million (SEK 19 million) Reclassifications in the City of Malmö s accounts relate to the following larger items: SEK -66 million SEK -60 million SEK 18 million SEK -19 million Net transfer to/from development activity (current asset). Reclassification between machinery and equipment and land, buildings and technical plant in connection with the capitalisation of ongoing investment projects. Equity adjustment in relation to previous years depreciation Reclassification as non-current liabilities on capitalisation of investment contributions. 91

92 In the compiled accounts, there is a discrepancy in the depreciation between the income statement and the balance sheet. This discrepancy is attributable to VA Syd. In addition, the amounts for the closing balance 2016 do not match the opening balance 2017, which is due to changes in shareholdings in VA Syd. Amounts in SEK million CITY OF MALMÖ COMPILED ACCOUNTS Machinery Equipment Building equipment Cars and other means of transport Ongoing investment in machinery and equipment Improvement expenses for properties not ow ned Art Other machinery and equipment Total machinery and equipment Carrying amount at the beginning of the year Sales and disposals Investments Depreciation and w rite-dow ns Reversed w rite-dow ns Reclassification of assets Carrying amount at the end of the year Sales and disposals for the year relate to the carrying amount for scrapped assets. Total reported capital gains and disposals of SEK -5 million (SEK -6 million) are broken down as follows: Disposal of assets SEK -5 million (SEK -6 million) Reclassifications in the City of Malmö s accounts relate to the following items: SEK 60 million Reclassification between land, buildings and technical plant and machinery and equipment in connection with the capitalisation of ongoing investment projects. In the compiled accounts, there is a discrepancy in the depreciation between the income statement and the balance sheet. This discrepancy is attributable to VA Syd. In addition, the amounts for the closing balance 2016 do not match the opening balance 2017, which is due to changes in shareholdings in VA Syd. 92

93 Amounts in SEK million CITY OF MALMÖ COMPILED ACCOUNTS Shares and participations Residential property rights Non-current receivables Total financial non-current assets Amounts in SEK million CITY OF MALMÖ COMPILED ACCOUNTS Carrying amount at the beginning of the year Sales Investments Carrying amount at the end of the year BREAKDOWN OF SHAREHOLDINGS, CITY OF MALMÖ Wholly ow ned companies Corp. ID number Number Shareholding, % Nominal value Malmö Stadshus AB Malmö Frihamns AB Total w holly ow ned companies Part-ow ned companies Sydskånes Avfallsaktiebolag, SYSAV Sydvatten AB Copenhagen Malmö Port AB Malmö Opera och Musikteater AB Kommunassurans Syd Försäkrings AB Total part-ow ned companies TOTAL CITY OF MALMÖ

94 BREAKDOWN OF SHAREHOLDINGS, COMPILED ACCOUNTS Corp. ID number Number Shareholding, % Nominal value Companies ow ned by the City of Malmö Malmö Stadshus AB Malmö Opera och Musikteater AB Kommunassurans Syd Försäkrings AB Malmö Frihamns AB Other companies 1 1 Total companies ow ned by the City of Malmö Companies ow ned by MKB Fastighets AB Rosengårds Fastighets AB Culture Casbah AB Total companies ow ned by MKB Fastighets AB 80 6 Companies ow ned by Sydskånes Avfallsbolag SYSAV Sysav Utveckling AB Sysav Industri AB KS Recycling AB ÅGAB Syd AB Carl F AB Total companies ow ned by SYSAV TOTAL COMPILED ACCOUNTS Amounts in SEK million CITY OF MALMÖ COMPILED ACCOUNTS Carrying amount at the beginning of the year Investments Carrying amount at the end of the year

95 Amounts in SEK million MKB Fastighets AB Malmö Live Konserthus AB Vagnparken i Skåne AB, VISAB Malmö Kommuns Parkerings AB VA Syd Kockum Fritid foundation Economic/non-profit associations and foundations Lantmännen Kvarnen 7 AB Lund Municipality Orcla Husbyggnadsvaror HBV association Advance share purchase KS Recycling AB Total Less amortisation for the coming year Total non-current receivables The city council has approved the following loan frameworks: Amounts in SEK million The municipal group s total framew ork for external borrow ing, including municipal companies/municipal associations CITY OF MALMÖ CITY OF MALMÖ Of which approved loan framework for municipal companies/municipal associations: MKB Fastighets AB Vagnparken i Skåne AB, VISAB Malmö Kommuns Parkerings AB Malmö Stadshus AB Malmö Live Konserthus AB Malmö Stadsteater AB MINC i Sverige AB VA Syd COMPILED ACCOUNTS Amounts in SEK million CITY OF MALMÖ COMPILED ACCOUNTS Carrying amount at the beginning of the year Grants approved for the year Dissolution for the year Carrying amount at the end of the year In 2011, the city council decided to co-finance Malmöringen by means of a grant for public infrastructure in the amount of SEK 65 million. The grant is recognised on the balance sheet and dissolved over 25 years. In 2017, the city council decided to co-finance further stages of the Malmöringen development in the amount of SEK 32 million, which will be dissolved over 25 years. 95

96 Amounts in SEK million CITY OF MALMÖ COMPILED ACCOUNTS Inventories Development properties Total inventories, etc Development properties Carrying amount at the beginning of the year Sales Development costs Reclassifications Carrying amount at the end of the year Sales for the year in the table refer to the carrying amount of assets. The total sales proceeds are SEK 570 million (SEK 245 million) and are reported as follows: Carrying amount of assets SEK 66 million (SEK 41 million) Gains on sales for the year SEK 504 million (SEK 204 million) Total reported development gains are SEK 506 million (SEK 214 million) and are broken down as follows: Gains on sales for the year SEK 504 million (SEK 204 million) Conversion of previous years gains SEK 2 million (SEK 10 million) In total, SEK 66 million (SEK 30 million) has been reclassified from land, buildings and technical plant (non-current asset). Amounts in SEK million CITY OF MALMÖ COMPILED ACCOUNTS Trade receivables Receivables from the state VAT receivable Other current receivables Prepaid expenses and accrued income Total receivables Amounts in SEK million CITY OF MALMÖ COMPILED ACCOUNTS Other equity Profit equalisation reserve Correction of errors / change of accounting principles Profit/loss for the year Total equity

97 According to the guidelines adopted by the city council for the profit equalisation reserve, an allocation of SEK 757 million can be made for 2017; see the balanced budget statement in the administration report. This allocation requires the approval of the city council on the adoption of the annual accounts. The city council has resolved on two occasions (KS-KOM and KS-KOM ) to reserve SEK 100 million in total from other equity for so-called social investments. SEK 4 million (SEK 6 million) was used for this purpose during This means that a total of SEK 26 million has been disbursed since In 2017, a correction was recognised directly in equity in accordance with RKR 14.1 Change of accounting principles, changes in estimates and assessments and correction of errors in the amount of SEK -18 million in relation to depreciation costs for a non-current asset that was brought into use in 2008 but not capitalised in the asset register. Comparative figures for 2016 have been adjusted as a result of a changed approach to how an ongoing rental agreement between the City of Malmö and Copenhagen Malmö Port AB is to be reported. The agreement contains a clause on the annual escalation of rental income during the term of the agreement. The assessment has now been made that the average rental income should be reported in the financial statements on a straight-line basis for the entire term of the agreement. An adjustment in the accounts of SEK 118 million has been made directly in equity in relation to rental income for the period

98 Amounts in SEK million Pension provisions, excl. guaranteed and fixed-term pensions Provisions for guaranteed and fixed-term pensions Total provisions for pensions and similar obligations CITY OF MALMÖ COMPILED ACCOUNTS Breakdow n of pension provisions Special contractual pension/retirement pension * * Defined benefit/suppl. pension * * Retirement pension * * Survivor s pension * * Total pensions * * Payroll tax * * Total pension provisions * * Pension provisions Opening provisions New obligations for the year Of which newly earned pension Of which indexation of interest and base amount Of which reduction of the discount rate Of which survivor s pension Of which other items Disbursements for the year Change in payroll tax Total pension provisions Updating rate 99% 99% * * *Information unavailable for the compiled accounts The City of Malmö recognises guaranteed and fixed-term pensions, as well as pension benefits earned from 1998 onwards, as provisions for pensions and similar obligations. The calculation base for pensions is described in the Accounting principles section; see page

99 Amounts in SEK million CITY OF MALMÖ COMPILED ACCOUNTS Local bank Potential penalty, SoL/LSS Environmental remediation Damages from cloudburst Repayment of state subsidies Grants for infrastructure Other provisions Total provisions Carrying amount at the beginning of the year New provisions Provisions utilised/reversed Closing value of provisions Environmental remediation refers to the estimated costs of remedial measures for land contamination identified in construction and development areas at Söderkulla, SegePark, Västra Hamnen, Norra Sorgenfri and Lindängen C. Grants for infrastructure refer to measures to enable passenger transport on the Continental Line under the Malmöringen transport arrangement. The City of Malmö s other provisions include reserves of SEK 114 million for Malmö Stadshus AB in case the loan provided by the municipality were to be deemed a taxable benefit for the company. Remaining items forming part of the City of Malmö s other provisions include reserves for risk expenses in connection with ongoing legal proceedings. Amounts in SEK million CITY OF MALMÖ COMPILED ACCOUNTS Borrow ing Less amortisation for the next year Prepaid income Debt to the VA collective Total non-current liabilities Of the City of Malmö s long-term loans, SEK 802 million (SEK 1,753 million) relates to borrowing through the Swedish commercial paper programme, SEK 978 million (SEK 960 million) relates to borrowing through the international commercial paper programme (ECP) and SEK 8,830 million (SEK 7,634 million) relates to bond loans. The remaining portion of the City of Malmö s long-term loans relates to an interest-free and amortisation-free loan from the municipal association VA Syd of SEK 141 million, which corresponds to the shareholding in Sydvatten AB. The increase of SEK 263 million in the municipality s borrowing is the result of a reduction in on-lending of SEK 187 million, an increase in liquidity of SEK 807 million and a fall in interest-bearing net liabilities of SEK 357 million. The reduction in on-lending of SEK 187 million is mainly attributable to MKB s Culture Casbah property deal, which brought in around SEK 1,000 million. The portion of the long-term loans that falls due for payment during 99

100 the coming year is calculated as being refinanced in its entirety and is 100% covered by underlying liquidity reserves and/or credit reserves. For information about the city council s adopted loan parameters, see Note 11 on financial non-current assets. Amounts in SEK million CITY OF MALMÖ COMPILED ACCOUNTS Investment contributions Number of years remaining (w eighted average) Non-capitalised investment contributions Street cost payments Number of years remaining (w eighted average) Non-capitalised street cost payments Total prepaid income Investment contributions and street cost payments are recognised as non-current liabilities and are accrued over the respective useful lives of the assets. Amounts in SEK million Trade payables Payroll taxes and expenses Value-added tax Amortisation for the coming year Other current liabilities Of which current liabilities to group companies * Of which current liabilities to credit institutions and customers * Accrued expenses and prepaid income Of which accrued salaries Of which holiday pay liabilities Of which overtime liabilities Of which employer s contributions Of which interest expenses Of which individually invested pension funds Of which tax income Of which development income Total current liabilities *Information unavailable for the compiled accounts. CITY OF MALMÖ COMPILED ACCOUNTS 100

101 The City of Malmö s approved guarantee commitments amounted to SEK 1,414 million (SEK 1,470 million) at the turn of the year, of which SEK 941 million (SEK 951 million) was utilised. Amounts in SEK million 1. Housing sector Associations, companies Government home loans, single-family homes Total housing sector Others COMMITMENTS APPROVED COMMITMENTS UTILISED Municipal companies Non-profit associations, companies Total others Pension obligations TOTAL GUARANTEES Guarantee commitments utilised for loans taken by municipal companies of SEK 607 million (SEK 574 million) relate to AB Sydvatten. The group s approved guarantee commitments amounted to SEK 692 million (SEK 764 million) at the turn of the year, of which SEK 463 million (SEK 522 million) was utilised. Amounts in SEK million 1. Housing sector Associations, companies Government home loans, single-family homes Total housing sector Others COMMITMENTS APPROVED COMMITMENTS UTILISED Non-profit associations Total others Pension obligations Pledged assets and equivalent collateral TOTAL GUARANTEES

102 Amounts in SEK million Pension obligations under collective agreements Pension obligations for fixed-term pensions Severance pay obligations Transition support obligations 5 3 Total Number of temporary appointments and elected representatives entitled to fixed term pension and similar obligations Civil servants 0 0 Elected representatives Pension obligations under collective agreements Retirement pension Survivor s pension Total pensions Payroll tax Total contingent liabilities for pension obligations under collective agreements Change for the year in pension obligations under collective agreements Opening contingent liability Change for the year in pension obligations under collective agreements Of which indexation of interest and base amount Of which reduction of the discount rate 0 0 Of which updating and Bromsen -1-3 Of which others Disbursements for the year Change in payroll tax Closing contingent liability for pension obligations under collective agreements CITY OF MALMÖ Pension benefits earned before 1998 are to be recognised as contingent liabilities in accordance with the Swedish Municipal Accounting Act. Of the amount of the contingent liability, SEK 5,441 million (SEK 5,581 million) relates to such pension obligations in accordance with collective agreements. In addition, SEK 36 million (SEK 32 million) is recognised in respect of 29 (28) elected representatives with a right to fixed-term pension, severance pay or transition support. All amounts include payroll tax. The calculation base for pensions is described in the Accounting principles section; see page

103 Other contingent liabilities in addition to guarantees at the City of Malmö amount to SEK 310 million (SEK 323 million) and in the compiled accounts to SEK 313 million (SEK 386 million). Amounts in SEK million CITY OF MALMÖ COMPILED ACCOUNTS Urban development plan Sankt Gertrud Procurement dispute Recycling stations Total other contingent liabilities Fastighets AB Skånepantern has claimed in its institution of proceedings that the City of Malmö must pay SEK 209 million plus interest, as well as compensation for the company s legal fees, with the total amount estimated at SEK 232 million as at 31/12/2017. This sum relates to the company s initial claim in the institution of proceedings submitted on 21/11/2016. The company has stated as grounds for its claim that it believes it is entitled to compensation from the City of Malmö for the damage it was caused as a result of the ban on demolition and the protection conditions included in the urban development plan relating to the property Sankt Gertrud 6 in the city of Malmö. The City of Malmö has refused to pay the compensation claimed by the company. In 2017, Fastighets AB Skånepantern reassessed the damage it has suffered and revised down its compensation claim. An institution of proceedings has been received from JCDecaux in relation to a procurement dispute regarding cycle hire. Malmö University is renting premises at the property Orkanen 1 in Malmö. In 2003, the city council approved a put option agreement regarding the property. The property is owned by a company, which in turn is owned by a foundation. The put option agreement sets out that, under specific established circumstances, the municipality will be liable to acquire all shares in the company if the seller so demands. According to the company s annual accounts as at 31/12/2016, the property had a book value of SEK 567 million and non-current liabilities of SEK 510 million. The City of Malmö has chosen not to recognise the put option as a contingent liability, but only to provide information about the significance of the agreement. The City of Malmö considers it highly unlikely that the put option agreement will be triggered and that if it is triggered the municipality will receive equivalent assets in the form of the property. There are various kinds of financial involvement between the companies of the Malmö group. These include sales and purchases of products and services. The City of Malmö also provides long-term loans to some companies in order to cover their capital requirements in relation to major investments. Several companies also obtain their operating liquidity via the City of Malmö. Major financial balances, disbursed/received during 2017, unreduced from shareholdings, are shown below (rounded to the nearest SEK million). 103

104 Amounts in SEK million Group companies/city of Malmö Provided Received MKB Fastighets AB 66 Malmö Stadshus AB 66 Vagnparken i Skåne AB, VISAB 3 Malmö Stadshus AB 3 Copenhagen Malmö Port AB 0 City of Malmö 0 Malmö kommuns parkering AB 17 Malmö Stadshus AB 17 Malmö Stadsteater AB 61 Malmö Stadshus AB 61 Malmö Live Konserthus AB 118 Malmö Stadshus AB 118 DIVIDENDS Amounts in SEK million Group companies/city of Malmö Income Expense Provided Received Income Expense City of Malmö Malmö Stadshus AB 0 MKB Fastighets AB Sydskånes avfallsaktiebolag, SYSAV 0 Copenhagen Malmö Port AB 98 Malmö kommuns parkering AB Vagnparken i Skåne AB, VISAB Malmö Stadsteater AB 8 Malmö Live Konserthus AB Sydvatten AB 0 0 Rescue Services South 12 VA Syd City of Malmö 389 MKB Fastighets AB 103 Sydskånes avfallsaktiebolag, SYSAV 1 Copenhagen Malmö Port AB 18 Malmö kommuns parkering AB 6 Vagnparken i Skåne AB, VISAB 70 Malmö Live Konserthus AB 1 Malmö Stadsteater AB 0 Rescue Services South 175 VA Syd 15 Sydskånes avfallsaktiebolag, SYSAV 92 3 VA Syd 3 92 Vagnparken i Skåne AB, VISAB 10 INCOME AND EXPENSES Rescue Services South 8 VA Syd 1 LOANS INTEREST AND GUARANTEE FEES 104

105 Amounts in SEK million Group companies/city of Malmö Income Expense Provided Received Income Expense Malmö kommuns parkering AB 1 VA Syd 87 MKB Fastighets AB 86 Copenhagen Malmö Port AB 1 Sydvatten AB VA Syd Sydskånes avfallsaktiebolag, SYSAV 0 0 Copenhagen Malmö Port AB 0 0 Malmö kommuns parkering AB 1 Parkeringsövervakning Malmö AB 1 City of Malmö 38 Parkeringsövervakning Malmö AB 38 INCOME AND EXPENSES LOANS INTEREST AND GUARANTEE FEES Amounts in SEK million COMMITMENTS APPROVED COMMITMENTS UTILISED Group companies/city of Malmö Provided Received Provided Received City of Malmö Sydskånes avfallsaktiebolag, SYSAV Malmö kommuns parkering AB Sydvatten AB A municipal contract is defined by the Swedish Council for Municipal Accounting as a company that is wholly owned by legal entities other than the municipality and to which the municipality has entrusted the care of a municipal affair. According to the definition, the following criteria must also be met before a municipal contract can be deemed to exist: There is a contract in place between the municipality and the producer under which the latter will operate municipal activity or large-scale partial activity. The municipality has primary responsibility for the provision of the services to citizens of the municipality. The activity would otherwise have been carried out by the municipality itself. Independent schools are not considered to be municipal contracts, as they operate by agreement with the state. The City of Malmö has municipal contracts mainly in the areas of healthcare and social care for the elderly and people with disabilities, as well as individual and family care. The number of places within each area on 31 December 2017 is as follows: Within healthcare and social care for the elderly and people with disabilities, the city has procured 670 places in short-term housing, residential care housing and group housing through framework agreements and individual placement contracts. Within individual and family care, there are 144 procured places for people such as the homeless and unaccompanied refugee children. 105

106 The contractual parties within each area are listed below. In addition to these are the contractual parties where individual agreements have been reached for each particular user. MUNICIPAL CONTRACTS BY AREA Short-term housing, residential care housing, communal housing Housing/shelter for the homeless Transit accommodation for unaccompanied refugee children Attendo Care AB Förenade Care AB Attendo Individ och Familj AB Nytida AB Malmö kyrkliga stadsmission Aleris Omsorg AB Förenade Care AB Hyllie Park Äldreboende AB AB Sjöstjärnan Norlandia Care AB Vardaga AB CONTRACTS IN OTHER AREAS Operation and maintenance work, roads and parks Skanska Sverige AB Svevia AB Peab Sverige AB Green Landscaping AB Gatu och Väg Väst AB Bravida Prenad AB SaneringsCompaniet i Malmö AB In addition to these, contracts have been agreed with 15 companies for snow clearance and de-icing. In accordance with the Swedish Council for Municipal Accounting s recommendations RKR 20 Recognition of financial assets and financial liabilities and RKR 21 Recognition of derivatives and hedge accounting, an explanation and report is provided here on how financial assets and liabilities, as well as financial instruments, affect the municipality s result, financial position and cash flow in those areas considered relevant to the municipality s activity. The municipal group s finance activities are governed by the city council s Financial regulations and the City Executive Board s Finance Policy. Finance activities are brought together at the municipality s internal bank. The internal bank is responsible for the supply of capital and liquidity planning. The internal bank carries out borrowing on the capital market through issues of municipal bonds and municipal certificates, among other things, and also invests any surplus liquidity. A prerequisite for this course of action is that an established loan programme, developed market relations and other necessary financial agreements are all in place. Creditworthiness is one of the factors that determines the prices the municipality ultimately has to pay on bonds issued. 106

107 Since 2011, the municipality has been rated AAA by Standard & Poor s, which is the highest rating on their international scale. This credit rating corresponds to the same creditworthiness as the Swedish state. Only a few borrowers in the world have the highest credit rating. This credit rating gives the city easier access to the Swedish and international capital markets. The internal bank manages the liquidity of the municipality and the wholly owned companies through a joint group account, where the cash flow of the municipality and the wholly owned companies is brought together. The internal bank must maintain a high level of payment preparedness through liquidity reserves of at least SEK 500 million, accessible through confirmed loan pledges or through its own liquidity. As at 31/12/2017, the internal bank s liquidity reserve amounted to SEK 7,327 million, of which SEK 758 million comprised cash and cash equivalents in bank accounts. Liabilities with capital maturity within 12 months totalled SEK 3,056 million. The average interest rate for the internal bank s liquidity management during 2017 was -0.02%. The municipal group s total external borrowing at the end of 2017 was SEK 12.4 billion. Borrowing has therefore increased by SEK 0.4 billion compared with the previous year. In addition to bond loans and commercial paper loans, there is a finance lease liability included in the total group borrowings. The City of Malmö s share of the borrowing amounts to SEK 10.6 billion in external bond loans and commercial paper loans, as well as SEK 141 million in an interest-free and amortisation-free loan from VA Syd relating to share capital in Sydvatten AB. Other borrowings in the compiled accounts relate to the municipality s share of the borrowing of partly owned companies. The average remaining term for the internal bank s external borrowings at the turn of the year was 2.9 years. The City of Malmö s lending to companies and municipal associations was SEK 9.3 billion as at 31/12/2017. All lending from the internal bank takes place on market terms. The average interest rate for the internal bank s lending in 2017 was 0.90%. The average fixed-interest period for the internal bank s lending was 1.4 years as at 31/12/2017. Risks associated with the city s financial activities are primarily related to interest risk, financing risk, counterparty risk and currency risk. 107