Research Areas

The aim of this report is to examine the underlying causes and consequences of the considerable delay in the revision of a funding model that is plagued by issues such as insufficient resources, unequal distribution among regions, high levels of debt that prevent communities from accessing debt markets, reliance on extraordinary financing mechanisms, and a growing number of ineffective collaboration among governments and a notable absence of cooperation.

The analytical perspective adopted considers the reality that certain regions possess resources per unit of need that are below the average, for example, Andalusia, the Valencian Community, Castile-La Mancha and the Region of Murcia. Over one-third of the Spanish population reside in these regions and, as a result of the operational framework of the regional funding system (SFA-2009), public health, education and social services are provided under circumstances that strain the accounts of these regions.

The report analyzes the effects of Spain’s regional funding system on the primary components that highlight the limitations of its operation, the sufficiency of resources to provide services, the equity in the allocation of these resources, the financial sustainability of the public accounts and the debt containment of the regions, and decentralization governance. In addition, the document will include a specific analysis of the impact of underfunding on the Valencian Region’s debt, with updated data to 2023.