In St. Petersburg, authorities will cut social benefits due to a massive budget deficit

The St. Petersburg authorities are cutting social spending due to a budget deficit that could reach 200 billion rubles in 2026. The cuts affect payments to large families, funding for the reallocation of communal apartments, as well as spending on education, healthcare, and public transportation.

As part of budget cuts, the St. Petersburg authorities are revising the rules for providing social assistance to large families for the purchase of housing.

Previously, all large families could count on payments covering 90% of the housing cost. Now, reduction factors are being introduced based on the number of children.

Specifically, for families with five or more children, the conditions will remain unchanged, while for parents of four children, the assistance amount will be 80%, and for those with three children, 70%.

Thanks to these changes, the city budget plans to save up to 30% of the funds previously allocated to this expenditure category.

Another area of spending cuts involves the resettlement of residents from communal apartments. The corresponding program is being removed from the city’s budget policy priorities.

According to the publication, approximately 189,000 families still live in communal apartments in St. Petersburg.

According to a draft law published by the Smolny on October 26, the changes are intended to reduce the number of citizens on the housing waiting list and cut budget expenditures.

Funding for related social benefits has already been cut. In 2025, 1.8 billion rubles were allocated to assist residents of communal apartments in building or purchasing housing. In 2026, this amount was only 827 million rubles—more than half as much.

Denis Udod, chairman of the St. Petersburg Housing Committee, explained the decision by citing the need to use budget funds more efficiently.

“These changes are aimed at ensuring economic feasibility and the rational use of budget funds,” said Denis Udod.

In late September, the St. Petersburg authorities approved a reduction in local budget expenditures by 70.1 billion rubles.

In addition to assistance for large families, the funding cuts affected several other areas:

• Education—a reduction of 15.5 billion rubles.
• Public transportation—a reduction of 9 billion rubles.
• Healthcare system—a reduction of 8.5 billion rubles.
• Major repairs to public institutions—a reduction of 13 billion rubles.

At the same time, city authorities plan to increase payments to participants in the so-called “SVO” and their families by 6.4 billion rubles.

One of the reasons for the budget deficit is the shortfall in corporate income tax revenue. According to St. Petersburg Vice Governor Alexei Korabelnikov, revenue from this tax will be 15 billion rubles lower than expected.

Previously, the official attributed the situation to an economic slowdown and a decline in business activity.

“The economic situation is such that, unfortunately, the economy is cooling down. (…) And this affects economic growth and economic activity and is reflected in the financial results of organizations,” explained Alexei Korabelnikov.

Against the backdrop of the expected budget deficit, St. Petersburg is cutting funding for a number of social programs and key municipal sectors, while simultaneously increasing payments to participants in the war against Ukraine and their families.

This is reported by Russian media. 

Amid rising military spending, Russian regions are forced to cut funding for key social programs in order to redirect funds toward payments to military personnel and their families.

Earlier, the St. Petersburg authorities proposed a significant revision of the city’s 2026 budget expenditures. The draft amendments were sent for review. According to the document, the budget’s expenditure side could be cut by 70.2 billion rubles—down to 1.58 trillion rubles.

As a reminder, in Russia—an aggressor state—President Vladimir Putin signed a decree setting the authorized strength of the armed forces at 2,441,630 personnel. 

Russia, as an aggressor state, plans to allocate 17.1 trillion rubles to defense in 2027. This is approximately 27% more than the initially planned 13.5 trillion rubles and represents the highest figure since the start of Russia’s war against Ukraine in 2022.