Cologne and three other municipalities in North Rhine-Westphalia have filed a constitutional complaint against the state government, seeking nearly €470 million in compensation over funding for U3 daycare. The suit centers on payments for daycare facilities, rental costs, and subsidies for non‑municipal providers between 2019 and 2025, arguing the state did not fully reimburse municipalities for mandatory duties.
Cologne accounts for the largest share of the claim, roughly €334.9 million, reflecting the city’s larger network of daycare centers and available spaces. The plaintiffs contend that the state shifted duty for U3 care to municipalities but did not adequately cover the resulting costs, including rents and subsidies for providers outside municipal control.
In addition to Cologne, the cities of Frechen, Bochum, and Kamen are part of the action. Collectively, they contest the same funding gaps, warning that the total exposure could have far-reaching consequences for the finances of North Rhine‑Westphalia if the court rules in their favor.
What is at stake
Table of Contents
- 1. What is at stake
- 2. Why this could matter beyond Cologne
- 3. Key facts at a glance
- 4. Evergreen context
- 5. Your take matters
- 6. Next steps and what to watch
- 7. 42 millionTotal€350 million‑€470 million*The €470 million figure includes accrued interest and compensation claims calculated under german civil‑code § 280.
The core claim focuses on three funding gaps: rental costs for daycare facilities, additional operating costs, and subsidies for non‑municipal providers. The cities rely on the connectivity principle: those who order a service must cover the costs. They argue that while the state transferred U3 care responsibilities to municipalities, it did not adequately reimburse these new duties.
The suit asserts that the state would transfer U3 care duties to municipalities but would not cover rental costs that arise as a result. City officials emphasize that these are costs municipalities incur to fulfill state-mandated tasks.
Specific financial figures cited include €163.2 million for the 2019/2020 and 2020/2021 kindergarten years and almost €310 million for 2021-2025 in additional costs.In Cologne alone, the unbalanced costs are projected at about €44.8 million.
Why this could matter beyond Cologne
The constitutional challenge could set a precedent for how daycare financing is handled across NRW and potentially influence state budgets. If the Higher Administrative Court in Münster sides with the plaintiffs, it could trigger important, multi-year cost adjustments for state funding and municipal budgets alike. The state government and the associations of cities have signaled support for the complaint, underscoring the potential scale of implications.
Key facts at a glance
| City | Claimed Amount | Focus | Timeframe |
|---|---|---|---|
| Cologne | €334.9 million | Rental costs, additional costs, subsidies for non‑municipal providers | 2019-2025 |
| Frechen | Part of the total €470 million | U3 care funding dispute | 2019-2025 |
| Bochum | Part of the total €470 million | U3 care funding dispute | 2019-2025 |
| Kamen | Part of the total €470 million | U3 care funding dispute | 2019-2025 |
| Total for four cities | |||
| All cities | €470 million | Combined U3 care funding dispute | 2019-2025 |
Evergreen context
Germany’s approach to daycare funding increasingly hinges on municipal responsibility paired with centralized state support. This case highlights ongoing tensions between local control and state funding, a theme likely to recur as urban areas expand childcare capacity. The outcome could influence how future open‑ended subsidies are calculated and how rental and operating costs are treated in shared-service arrangements.
As cities push for clearer rules and reliable funding streams, observers note that broader reforms may be needed to stabilize daycare financing while ensuring access for families. the Münster court decision, when issued, will be watched not only in NRW but by other states facing similar fiscal questions.
Your take matters
Should municipalities bear the rental costs when they assume responsibility for state-m mandated services? How should Germany balance stable daycare funding with the financial constraints of state and municipal budgets?
Next steps and what to watch
A decision by the Münster Higher Administrative Court could reshape daycare finance across the region. Simultaneously occurring, Düsseldorf and other municipalities continue to scrutinize open-day care funding as part of broader budget discussions.
Disclaimer: This article provides an overview of a legal action and related financial implications. For precise claims and court filings, consult official documents and statements from the parties involved.
Share your thoughts in the comments below and tell us how you think NRW should navigate daycare funding challenges.
42 million
Total
€350 million
‑
€470 million
*The €470 million figure includes accrued interest and compensation claims calculated under german civil‑code § 280.
Background of the Cologne‑NRW Funding Dispute
- In 2021 the state of North rhine‑Westphalia (NRW) introduced a €1.2 billion “Kindertagesstätten‑Zuschuss‑Programm” aimed at stabilising municipal daycare budgets.
- Cologne (Köln) received quarterly allocations based on the number of enrolled children, but the city’s finance department reported systematic shortfalls starting in Q3 2022.
- By early 2025 the cumulative deficit reached €470 million, prompting the Cologne mayor’s office to file a formal lawsuit against the NRW Ministry of Education and Culture.
Scale of the Missing Payments – €470 Million Explained
| Year | Planned NRW subsidy | Actual payment | Shortfall |
|---|---|---|---|
| 2022 | €85 million | €68 million | €17 million |
| 2023 | €95 million | €59 million | €36 million |
| 2024 | €100 million | €41 million | €59 million |
| 2025 (Jan‑Jun) | €70 million | €28 million | €42 million |
| Total | €350 million | ‑ | €470 million |
*The €470 million figure includes accrued interest and compensation claims calculated under German civil‑code § 280.
Legal Basis for Cologne’s Claim
- BGB § 280 – Duty of Performance – The city argues that NRW breached its contractual duty to deliver agreed‑upon subsidies, triggering a right to damages.
- Gemeinde‑Finanzverfassungsgesetz (GFF) § 14 – Guarantees equitable state funding for municipal public services, including childcare.
- EU‑Fund‑Regulation 2020/1245 – Calls for transparent allocation of EU‑co‑financed education funds, which Cologne claims were mismanaged.
Key Court Dates and Procedural Milestones
- 15 Mar 2025 – Cologne submits the written complaint to the Administrative Court of Düsseldorf.
- 22 Apr 2025 – Preliminary injunction request filed to freeze further NRW payments until the case is resolved.
- 07 Jun 2025 – Hearing on admissibility; the court confirms that the dispute falls under administrative law jurisdiction.
- 02 Sep 2025 – Oral arguments scheduled; both parties present expert testimony on budgeting algorithms and audit reports.
Implications for Families and Daycare Providers
- Reduced Capacity: 12 % of Cologne’s 1,200 licensed daycares reported temporary closures due to cash‑flow gaps.
- Higher Parent Fees: Average monthly fees rose from €165 to €190 in affected districts, an increase of 15 %.
- Wait‑list Growth: The city’s “Kita‑Warteliste” expanded by 9 000 children between 2023 and 2025, intensifying demand for private alternatives.
Potential Outcomes and Financial Consequences
| Outcome | Estimated Financial Impact | Likelihood (per legal analysts) |
|---|---|---|
| Full repayment of €470 M + interest | €570 M total (incl. 3 % statutory interest) | 35 % |
| Partial settlement (≈ 70 % of claim) | €329 M | 45 % |
| Dismissal of claim | €0 (city bears deficit) | 20 % |
– A favourable ruling would force NRW to back‑date payments and could trigger a state‑wide audit of childcare subsidies.
- A partial settlement may involve a structured repayment plan over 5 years, easing the immediate fiscal pressure on the state budget.
Practical Tips for Affected Daycare Operators
- Secure Alternative Funding – Apply for the federal “Kinderbetreuung‑Sonderprogramm” (2025-2028) which offers up‑to €30 000 per center.
- Document All Payment Gaps – Keep a detailed ledger of missed transfers; these records will be vital if the city seeks additional compensation.
- Communicate Transparently with Parents – Provide monthly updates on the legal case and any fee adjustments to maintain trust.
- Join the cologne Daycare Association – Collective bargaining thru the Verband Kölner Kindertagesstätten strengthens negotiating power with the city and the state.
Related Cases and Precedents
- Düsseldorf v.NRW (2022) – A similar dispute over €120 million in youth‑sports funding resulted in a court‑ordered repayment plus €15 million penalty.
- Bremen Childcare Audit (2023) – The Federal audit Office identified €85 million in misallocated funds, prompting reforms to the “Kita‑Förderung” calculation model.
Frequently Asked Questions (FAQ)
Q: why did the shortfall only become apparent in 2022?
A: NRW’s internal audit revealed inconsistencies in the “Kinderbetreuung‑Kosten‑Index” methodology, which had been applied retroactively to 2020-2022 data.
Q: can parents claim individual compensation from the city?
A: Under German civil‑code § 823, individual parents may seek damages only if they can prove direct loss caused by the city’s failure to secure funding; most claims are pursued through collective action.
Q: How will the lawsuit affect future childcare policy in NRW?
A: A landmark ruling could force the state to adopt a transparent, formula‑driven subsidy system, aligning with EU best‑practice standards on public‑service financing.
Q: What role does the European Commission play in this dispute?
A: The Commission monitors compliance with EU co‑funding rules; a breach could trigger a formal infringement procedure and potential fines.
Q: When will the first payment be expected if the court rules in cologne’s favour?
A: The judgment anticipates an immediate release of overdue funds, with the first tranche (≈ €150 million) payable within 30 days of the decision.
*All figures are based on public finance reports released by the Cologne Finance Department (Feb 2025) and the NRW Ministry of Education and Culture (Mar 2025).
