Reforms of local and regional competences, powers and responsibilities

Types of reforms

Types of reforms

Governance reforms that have brought about changes in the number ofLRGscan be either voluntary or compulsory reforms. In addition, territorial reforms can be carried out at once, straightaway, or as a gradual process taking effect over several years. Decentralisation can often be introduced alongside other complementary territorial processes, such as regionalisation, which has often been used as a means to reduce municipal fragmentation.

For instance, in 2014, territorial and administrative reforms in Albania arose from the implementation of a 2014 law,^[1] the objective of which was to reduce fragmentation of local government and to promote decentralisation. This led to the abolition of communes as well as a reduction in the number of municipalities from 373 to 61. This outcome followed the earlier establishment of 12 regions, which resulted in the creation of new territorial entities within a relatively short time span.

As stated previously, territorial reforms can be carried out on a voluntary or compulsory basis. This survey looked at the extent to which changes were the result of an official governance reform or whether they grew more organically out of a desire for greater intermunicipal cooperation. The data obtained from CEMR's associations tend to indicate that in 30 countries^[2] territorial (and other) reforms were implemented in response to official national government reforms (in addition to voluntary processes).

It may be that mandatory territorial reforms are used as a means of instituting changes to respond to evolving demographic or political needs. For instance, in Iceland, compulsory intermunicipal cooperation was used to introduce progressive services aimed at assisting people with disabilities in municipalities with fewer than 8,000 inhabitants.^[3] In Italy, legislation was introduced in 2014 that required municipalities with fewer than 5,000 inhabitants to join intermunicipal cooperation structures.^[4] In France, since 2015, all municipalities are required to be associated with a larger intermunicipal cooperation structure.^[5]

When governance reforms are introduced, it is important to consider such reforms by way of a thorough and multi-dimensional approach, not discounting the territorial, political and economic ramifications, not to mention all the citizens impacted by the changes. In the case of official or “mandatory” reforms, there is always the risk of encountering failure or disappointing outcomes, particularly when the aims and/or desired outcome of the changes handed down are not clear or ones universally shared by all the actors concerned.

For example, in Sweden, an attempt was made in 2017 to introduce significant reform that would have reduced the number of regions from 21 to 6, however despite extensive debate the proposal could never move forward. In Slovenia, the Ministry of the Interior proposed a territorial reform in 2013 that would have reduced the number of municipalities from 212 to 122. However, since the proposals were put forward without prior consultation of the municipalities and their representative organisations, they encountered strong opposition and were subsequently abandoned.

In their responses, CEMR’s associations also provided examples of territorial restructuring carried out in recent years that grew more organically, in tandem with voluntary mergers and/or as a result of increased cooperation between municipalities or regions, i.e. the amalgamation of public services to create larger intermunicipal entities. There have also been cases where territorial reforms were encouraged, rather than introduced as part of official measures. Other times, theLRGsinvolved in these voluntary mergers have also received financial incentives to mitigate the changes that accompany their expanded remit and responsibilities.

In Iceland for example, the most recent territorial reform caused the number of municipalities to drop from 74 to 69. Local governments then voluntarily decided to merge in order to resolve the issue of the fragmented delivery of public services, increase sources of funding for smaller municipalities and to strengthen the municipal administration.

Mergers in Luxembourg have also resulted in fewer municipalities. These mergers were decided on a voluntary basis through referendums held beforehand in the municipalities concerned. The central government supported this development financially. The Association of Luxembourg Cities and Municipalities (SYVICOL) provided support for these mergers by sharing knowledge and experiences.

In the Netherlands, the voluntary merging of municipalities has been an ongoing trend since 2012. In Germany, municipal mergers in the states newly created between 1995 and 2005 explained a cut of 38% in municipalities. This process of merging municipalities is still underway andLRGshave been strongly encouraged to favour the path of intermunicipal cooperation.

In France, the intermunicipal cooperation movement that has arisen over the past two decades has progressed even further in recent years with ever more competences being transferred away from local authorities towards the intermunicipal cooperation units. Alongside this tendency, a parallel movement of merging municipalities has popped up, leading to a drop of 1,735 in the number of municipalities (from 36,700 in 2012 to 34,965 in 2021).

In 2013, Spain passed an act to regulate such mergers between local authorities, even providing a set of incentives to spur on these amalgamations. In Ukraine, the years from 2015 to 2019 witnessed a period of voluntary consolidations of communities. Even though strictly voluntary, mechanisms were used to promote this regrouping of territorial communities and the result was the consolidation of more than 4,700 “communities” and the establishment of 980 new “Amalgamated Territorial Communities”.

Sometimes, change came about as an unintended consequence of reforms not specifically aimed at any kind of overhaul in the public administration. This shows how territorial reforms can be triggered as part of broader political or economic reforms. In Denmark, where a reform was introduced in 2018 to improve support services for business development, provides a good example of this. As a result of the reform, this led to a change in the structure ofLRGsas the responsibility for business promotion activities was then transferred from the regional to the local tier.

There are many factors that determine whether territorial reforms will in the end achieve their intended outcomes. With their introduction, a new clear delineation of responsibilities between the different tiers of government needs to be agreed upon. This is even more essential in the case of shared competences between different tiers of government that are affected by the territorial reforms. Effective dialogue is critical to the success of territorial reforms and roles and responsibilities must be clearly defined.

It is also important to anticipate, based on local needs, in what ways territorial reforms may affect the efficient delivery of services. Even efforts to implement territorial reforms as a cost-cutting exercise can unleash other problems, such as confusion as to which administrative unit is responsible for delivering a service, or a sudden lack of accountability that leads to poor service delivery.

A number of tools are available to assist with and support efficient decentralisation reforms. For instance, by using the Council of Europe’s toolkits, described in detail in Box 02 below,LRGscan ensure their readiness to carry out territorial reforms and foster the conditions necessary for effective change.

Local shift in social and health competences in many countries

In addition to any territorial reforms that led to changes in the number of regional and local government units, CEMR’s members were asked to indicate whether these territorial reforms had also resulted in changes to the competences and/or responsibilities of LRGs.

The survey responses highlighted the fact that many of the reforms did indeed affect the remit and responsibilities of local and regional governments, altering or strengthening them, even in the cases where there had been no actual change in the number of LRGs.

The vast majority of survey respondents believed that their territorial reforms did produce an impact,^[1] with only five^[2] answering that the reforms had had no impact on the local and regional competences in the area concerned.

Responsibility for social and healthcare provision holds an important place amongst local and regional governments’ missions. Moreover, insights from CEMR’s associations seem to underscore how efforts to improve social and healthcare provision have even propelled territorial reforms forward at times and led to greater decentralisation in several countries. As a result, many municipal governments have undergone modifications to their powers and responsibilities in the field of social services.

For example, in the Netherlands, it was decided in 2015 to decentralise the provision of social and health services to municipalities, which entailed entrusting greater responsibilities to local authorities in the areas of childcare, elderly care, mental healthcare and employment. It should be noted however that, in the Netherlands, public health is viewed as a shared responsibility between the national government, municipalities and the private sector.

In Portugal, since 2018, a wide range of new competences have been devolved from the central government to the local governments, including powers over education, health, and social matters. This transfer process is expected to be concluded by the end of 2022.

Recent decentralisation strategies

From the data provided by several of CEMR’s non-EU members, the most recent decentralisation strategies are to be found in non-EU member states. Territorial reforms in those countries have been for the most part driven by the desire for greater decentralisation. The aim is twofold: to foster democratisation and a balanced economic development whilst increasing the responsibilities and resources that are delegated to the governments closest to citizens.

In Georgia, a clear roadmap has been put in place for the implementation of a new decentralisation strategy for the 2020-2025 period that targets political, administrative and financial decentralisation.

In Albania, the introduction of the 2015-2020 Intersectoral Strategy for Decentralisation and Local Governance and a new 2015 law on local self-government are signature elements of the country’s moves towards more decentralised public service provision.

In Moldova, major efforts were undertaken from 2012 to 2016 to implement the National Decentralisation Strategy, the goal of which was to introduce major decentralisation reforms. However, processes have slowed significantly in recent years and are fragmented.

In Scotland, the Scottish national association (COSLA) reported that there had been no significant change in terms of the number of local authorities but that three laws were passed by the Scottish Parliament (in 2015, 2018 and 2021) designed to empower infra-municipal local communities.

Increased governance-in-partnership

Another recent development in territorial reforms that has been apparent from the accounts of a majority of CEMR’s members, a total of 29 out of the 40 responding countries, has been the steps in the direction of increased or enhanced governance-in-partnership (Figure 2).

Survey responses revealed that, for associations in nine countries,^[1] the reforms undertaken had resulted in enhanced collaboration between different tiers of government, but not necessarily according to a discernible pattern of more or less centralisation or decentralisation. Territorial reforms of this nature are often motivated solely by the objective of cost-savings.

Eight otherCEMRassociations^[2] indicated however that the reforms had indeed resulted in greater decentralisation. Furthermore, associations in 12 different countries^[3] reported that the reforms there had led both towards greater collaboration between tiers of government and more decentralisation of competences. 

Two countries stood out as the exception to the latter, with an increase in centralisation following territorial reforms: Austria and Latvia. It should be pointed out however that, in Austria, the reform in question, the “Gemeindestrukturreform”, led to greater centralisation only in the region of Steiermark, which resulted in a decrease in the number of administrative subdivisions.

In the case of Latvia, the content of the reform, and thus its exact impact, currently remains unclear and is dependent on the outcome of discussions regarding new legislation on local self-government, ongoing at the time of preparation of this study.^[4]

Figure 2: Impact of reforms on administrative structure

Source: TERRI Survey 2021 | CEMR

Motives for the territorial reforms

The reasons cited for territorial reforms vary from country to country. They are most often prompted by political, administrative or fiscal reasons or to rationalise operations. Nonetheless, for the majority of survey respondents, the most common driving rationale for undertaking territorial reforms was to take subsidiarity issues into greater account,^[1] with cost-cutting and cost efficiency considerations.^[2]

It was possible to tick more than one reason.  Associations in nine countries^[3] indicated that reforms transpired out of efforts to improve democratic accountability. In seven countries, associations^[4] cited the hope for more innovation.

In the cases of Latvia and Austria (the two countries where territorial reforms were said to have resulted in greater centralisation), the reasons given for the change were tied to cost-cutting efforts.

In Iceland, it was noted that the initial aim of reforms was to improve public services, but it was observed that these changes have thus far not resulted in lower costs.

In the case of Denmark, the reform objectives were to simplify and improve public service support for business development. In Sweden, the reasons cited for the reforms were to strengthen and boost the legitimacy of regional self-government and to improve coordination between the tiers of government.

Figure 3: Reasons for territorial reforms

Source: TERRI Survey 2021 | CEMR