Strasbourg, 2 July 2010 CDLR-Bu(2010)19
Item 14 of the agenda
BUREAU OF THE
EUROPEAN COMMITTEE ON LOCAL AND REGIONAL DEMOCRACY
(CDLR)
CONFERENCE ON THE IMPACT OF THE ECONOMIC DOWNTURN ON LOCAL GOVERNMENT ACROSS EUROPE
AND THE RESPONSES TO IT
(11-12 October 2010)
Secretariat Memorandum
prepared by the Directorate General of
Democracy and Political Affairs
Directorate of Democratic Institutions
 |
Introduction
The Utrecht Declaration (I (A), 15-19) called for:
- continued monitoring of the financial situation,
- a review conference in the second half of 2010, and
- a review of the overall impacts and responses at the next ministerial conference in Ukraine in 2011.
The Conference “The Impact ofthe Economic Downturn on Local Government Across Europe – and the Responses to it” co-organised by the CDLR and the LGI (Local Government and Public Service Reform Initiative of the Open Society Institute) will be held in Strasbourg on 11 and 12 October (morning) immediately preceding the 46th meeting of the CDLR.
The objectives of the Conference will be to:
- update the analysis of the financial impacts of the crisis on local government;
- analyse policy responses to the crisis by member states against the backdrop of the guidelines identified in the Utrecht Declaration;
- identify possible themes for deliberation by ministers in 2011.
In addition to CDLR members, Conference participants will include representatives of Ministries of Finance, local government associations, other international organisations and technical specialists contributing to workshops, as well as the Congress and the Parliamentary Assembly. The OECD, World Bank, CEMR and the Assembly of European Regions were identified as partners in, or contributors to the activities planned to address the challenge of monitoring and responding to the financial crisis. It is proposed that each country appoints a delegation of three members from central administration (local government, finance) and local authorities.
The conclusions of the conference will be presented to the CDLR for consideration in planning of the next Ministerial Conference in 2011.
The LR-Fs Committee (28-29 June 2010) had a preliminary discussion on the programme, with the participation of Prof. Ken Davey (LGI) who informed the Committee on the state of preparation of the Conference and the results of discussions of the editorial group with country observers held in Budapest,on 22-23 June. The draft programme presented below is provisional and reflects LR-FS suggestions.
Two rounds of the same workshops will be organised, one on Monday afternoon, the other on Tuesday morning. In this way the participants of each country delegation can rotate and be exposed to the experiences presented in the four workshops. Interpretation will be provided to two workshops out of four at a time.
Action required
The Bureau is invited to review the programme, in particular decide on the title, suggested speakers and format, approve it and provide guidance to the Secretariat as appropriate.
Conference organised by the CDLR and the LGI (Local Government and Public Service Reform Initiative of the Open Society Institute)
“Local Government across Europe – Response to Recession”
Strasbourg, 11-12 October 2010
Draft programme
10 October 2010
|
Participants’ arrival |
|
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19.00 – 22.00 |
Reception hosted by Strasbourg City and Urban Community (tbc) |
11 October 2010
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9.00 – 9.30 |
Registration and coffee |
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9.30 – 10.00 |
Opening of the Conference Key note speeches by political figures (central government, major city) |
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10.00 – 11.00 |
Plenary session: Overview and updated analysis of the financial situation of local government in Council of Europe member States Ken Davey Sorin Ionita Debates |
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11.00 – 11.30 |
Coffee Break |
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11.30 – 12.30 |
Introduction to workshop topics Sorin Ionita Pawel Swianiewicz Gabor Peteri Laurie Joshua Debates |
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12.45 – 14.15 |
Lunch |
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14.30 – 16.00 |
Workshops on policy responses. Round 1 |
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16.00 – 16.30 |
Coffee Break |
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16.30 – 18.00 |
Workshops on policy responses. Round 1 continued |
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18.15 – 19.30 |
Cocktail hosted by the Secretary general of the Council of Europe and LGI |
12 October 2010
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9.00 – 11.00 |
Workshops on policy responses. Round 2 |
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11.00 – 11.30 |
Coffee Break |
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11.30 – 12.30 |
Workshops on policy responses. Round 2 continued |
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12.30 – 13.30 |
Summary of workshops and Conclusions |
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13.45 – 14.30 |
Lunch |
Workshops on policy responses: themes (provisional)
A: Inter-governmental Finance
The Utrecht Declaration detected a general contraction in local government revenues frequently with simultaneous growing demand for expenditure, particularly on social assistance and debt service. It predicted that this squeeze would continue in the short term due to cutbacks in national government support, time lags in revenue decline and increasing demand to support economic recovery and to address demographic change. It also noted that the assignment of more volatile tax bases, such as corporate profits and value added, to local governments with a high degree of regular operational commitments deserved reconsideration. It nonetheless cast doubt on the capacity of national budgets to offer local government increased budget support, except for short term fiscal stimulus, as they tended to be under even greater strain.
The workshop will discuss how far changes are being made or considered in:
· the assignment of revenue sources to local government
· the scope or scale of local expenditure responsibilities
· the volume and distribution of inter-governmental transfers and shared revenues
· the freedom of local authorities to vary the incidence and rates of their taxes and charges
· access to credit.
It will also appraise the quality of dialogue and negotiation between national and local government over these issues.
Moderator: DDI/CDLR
Rapporteur: Sorin Ionita
Case presenters: Germany - Berndt Spahn (University of Frankfurt), Finland - Marcu Mollari (Ministry of Finance), Serbia – Alecsander Bucic, SCTM, OECD – Hansjoerg Bloechliger. A fifth case presenter could be identified after the responses to questionnaire are received and analysed in July.
B: Doing more with less: promoting efficiency
The Ministerial Conference concluded that the squeeze on local budgets was likely to continue for the foreseeable future and that local governments would be challenged to find long-term ways of making resources go further in the delivery of public services.
A number of contemporary approaches to increasing efficiency were identified at Utrecht and experience in their application will be discussed by the Workshop. These include
- Benchmarking, performance audit, value-for-money review, performance budgeting etc. How widely are such processes used? How sensitive are they to exogenous differences in needs and costs? How and to what extent do they succeed in attracting local officials?
- Outsourcing: Is the crisis leading to an increase in contracting private sector provision of public services? Have cost savings been achieved, and if so, through competition or economies of scale? How can transparency be ensured? Can the advantages of competition for the initial award of contracts be safeguarded against subsequent erosion when service specifications require amendment?
- Territorial reorganisation. Has there been any acceleration of territorial amalgamation or inter-municipal co-operation?
- Are there significant differences between types of local government in the adoption of contemporary approaches? What types act as leaders of change?
Moderator: Congress – Andreas Kiefer (tbc)
Rapporteur: Pawel Swianiewicz
Case presenters: Danish LG Association, UK – Toni Travis (LG expert), Country implementing the Strategy for Local Governance, Italy – Mauro Marre (Ministry of Economy and Finance), a fourth case presenter could be identified after the responses to questionnaire are received and analysed in July.
C: Local government contributions
to economic recovery and sustainable development
After recessions in the 1990s many local governments developed an active role in promoting local economic activity and employment. How relevant do they remain in the current economic circumstances and to what extent are they being diversified or reinforced?
- Did improvements in local physical infrastructure benefit both from domestic and European Union stimulus and investments programmes? How has the crisis affected the appetite and capacity of private enterprises to engage in joint public sector investments? In which sectors do the benefits of its management expertise and scale economy outweigh the costs of fragmented management and more expensive capital? Were there any changes in the general public attitude and the technical approach towards private sector involvement in municipal service provision?
- Which indirect tools and interventions, such as supportive physical planning regulations and processes, more attractive physical and cultural environments, active municipal land policies and human skills development, were used for supporting local economic development?
- In several countries fiscal stimulus programmes are being specifically directed to projects designed to counter climate change. Examples include improvements in energy efficiency through insulation of public buildings and social housing, changes in local planning regulations, renewal of street lighting, urban transportation, etc. What is the practical experience of such efforts and which are the most efficient ways of intervention?
Moderator: CoE PACE
Rapporteur: Gabor Peteri
Case presenters: Russia – Svetlana Orlova (Vice-President of the Federation Council of Federal Assembly of the Russian Federation), SEE – Bruno Wilhelm (GTZ), Slovakia (tbc), City of Strasbourg (stimulus package for energy savings-tbc), Wallonia (tbc)
D: Coping with the social impacts of recession and
demographic change
The burden and cost of social provision have increased markedly in the short term as a consequence of the recession, but will also continue to rise in the long term because of demographic trends in Europe. The fiscal aftermath of the financial crisis will limit the ability of the State (central or local) to shoulder extra burdens and increasing co-operation with other actors will be imperative.
The division of responsibility between national and local government for social assistance and care varies enormously between European countries. What is the value added of local government participation? Do local knowledge and preferences enhance effectiveness and resources or distort equity? Do divisions of responsibility (including those between tiers of local government) bias towards more expensive solutions for individual needs?
Both commercial and social enterprises are expanding rapidly their social sector roles. Are their activities sufficiently incorporated into an overall regulatory and financial framework? Family care remains the bedrock in most communities; how far and how well does local government support rather than supplant it?
Overall, how can this mixed economy of social provision be made to work more efficiently and equitably?
Moderator: CoE
Rapporteur: Laurie Joshua
Case presenters: Hungary - Katalin Tausz Dean University of Social Studies Budapest), Netherlands - Mayor (tbc), Germany (tbc) or Poland (tbc) or Latvia (tbc), case study from Mulhouse or Timisoara (tbc) The case presenters could be identified after the responses to questionnaire are received and analysed in July.