Strasbourg, 20 March 2009 LR-FS(2009)4
EUROPEAN COMMITTEE ON LOCAL AND REGIONAL DEMOCRACY
(CDLR)
COMMITTEE OF EXPERTS ON LOCAL AND REGIONAL
FINANCE AND PUBLIC SERVICES
(LR-FS)
FUTURE ACTIVITIES IN THE FIELD OF LOCAL AND REGIONAL FINANCE AND PUBLIC SERVICES
Secretariat Memorandum
prepared by the Directorate General of
Democracy and Political Affairs
Directorate of Democratic Institutions
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Introduction
The new LR-FS Committee, the successor to the LR-GR Committee, is invited by the CDLR to review at its first meeting in Spring 2009 the challenges and actions identified in the Budapest Agenda in the field of local and regional finance and public services, develop proposals for possible inclusion in the future Utrecht Agenda (2010 – 2014) and make proposals for specific activities to be undertaken.
As members are aware, the Budapest Agenda for delivering good local and regional governance (2005-2010) will be formally concluded at the 16th session of Council of Europe Conference of Ministers responsible for Local and Regional Government in Utrecht (The Netherlands) on 16-17 November 2009. A report on the work undertaken in the Council of Europe, including in the field of local and regional finance and public services will be prepared by the CDLR.
The Budapest Agenda set out challenges and actions in the field of finance and public services at local and regional level as they appear in Appendix 1. The overview of activities undertaken by the CDLR and its LR-FL/GR sub-committees further to the actions identified in the Budapest Agenda appears at Appendix 2.
More important than looking back is to look ahead to the future. The Ministerial Conference session in Utrecht is expected, inter alia, to adopt a new medium term agenda, the “Utrecht Agenda” for the period 2010 -2014.
In order to prepare for decision making by the Ministerial Conference, the CDLR sent out a short questionnaire to member States asking them about the challenges they face in the field of local and regional government. The deadline for reply was set for 30 March 2009. For purposes of information only, this questionnaire appears at Appendix 3. At the time of writing of the current document very few replies had been received and thus very little information on the views of governments was available.
In view of the specialised nature of local and regional finance and public services and given the fact that the members of the LR-FS Committee for many member States do not participate in the meetings of the CDLR, it is thought important that the LR-FS Committee addresses the question of possible future work, not only as concerns topics but also as concerns possible outputs and working methods.
In general terms, the current range of the CDLR’s (and its sub-committee’s) main working methods and outputs, is as follows:
1. Preparation of European practice reports based on information gathered through questionnaires to members States, followed by, if deemed appropriate, conclusions on good practices and/or the development of guidelines;
2. Preparation of evaluation reports based on information gathered through questionnaires to members States, assessing member States’ performance in relation to certain aspects of the Council of Europe acquis;
3. Preparation of practice-oriented handbooks elaborated with the assistance of and contributions by European experts from the given field;
4. Development of practical tools, involving a process of testing in co-operation with volunteering member States before their validation and promotion;
5. Development of (draft) legal standards, be it (draft) Recommendations by the Committee of Ministers to member States or (draft) Conventions (or protocols to existing conventions);
6. Rapid response service – initiated at the request of a member State in the context of ongoing reforms in the initiating member state. Depending on the case, all or some of the CDLR members are invited, through the Secretariat, to provide information quickly (usually within two weeks) about relevant national rules and practice on a specific issue.
7. Presentations at the committee meeting on national practice concerning a given topic by one or more member States, possibly followed by a broader exchange of views ;
8. Workshops on specific topics, involving independent experts, hosted by a member State and organised in co-operation with the Secretariat with open participation by interested members (or colleagues from other units of public adminstration identified by them) at their own expense.
All these options are also available in principle for work in the field of local and regional finance.
As for the topics, in principle any topic or set of topics within the realm of finance and public services at local level can be taken up.
Further to the meeting of the LR-GR Committee on 27-28 October 2008, the Chair of the Committee, Mr Marc Vanolst (Luxemburg), Mr Jorgen Lotz (consultant expert) and the Secretariat have engaged in a first reflection on possible proposals for future work in the area of local government finances. The ideas emanating from this first reflection appear in Appendix 4.
Action required
Members are invited, including through appropriate domestic consultations, to prepare for an active contribution to Committee’s discussions and decisions on this item of the agenda.
The Committee is invited:
- to evaluate the results obtained in the field of local and regional finance further to the Budapest Agenda;
- to make suggestions for the possible broad challenges, actions and topics that could be included in the future Utrecht Agenda in the field of finance and public services at local and regional level (2010 -2014);
- to make suggestions for possible new concrete activities by the CDLR and the LR-FS Committee in the field of finance and public services at local and regional level (including for the next meeting in 2009).
APPENDIX 1
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3 |
Local and regional finance and public services |
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Challenges |
Actions* |
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1 |
Reaching a level of resources for local and regional authorities which is commensurate with their responsibilities; |
- To make use of, implement and promote, as appropriate, the existing Council of Europe acquis in the field of local and regional finance, in particular Recommendations Rec(2004)1 on the financial and budgetary management at local and regional levels and Rec(2005)1 on financial resources for local and regional authorities; To promote and assess the impact of the Council of Europe’s acquis in the field of local finance; To make use of and implement, as appropriate, the Committee of Ministers recommendations in the field of local and regional public services; To share experiences on leadership, benchmarking and capacity-building for local and regional authorities with a view to identifying good practice and possibly preparing a recommendation of the Committee of Ministers to member States in these fields; To examine the possible ways in which local and regional authorities can co-operate with other authorities (inter-municipal co-operation, co-operation with authorities of a different level) and with the private sector (partnerships, concession of public services, contracting out certain elements) for improving public services offered to their citizens; To consider updating some of the previous reports in the field of local and regional finance and notably the report on “Local finance in Europe” examined by us the 11th session of the Conference (Lisbon, 1996). - |
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2 |
Finding an optimum structure of income sources in order to allow local and regional authorities to offer their citizens services which are adapted to their requirements; |
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3 |
Fostering the leadership and capacity of local and regional authorities to deliver good local and regional governance and providing citizens with services of the highest possible quality while respecting budgetary constraints; |
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4 |
Striking the right balance between a high degree of freedom for local and regional authorities in managing their finance and a high degree of accountability.
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* Explanation for the presentation of actions in one single column: For actions in the field of local and regional finance / public services, it is not possible to clearly assign individual actions to individual challenges as for the other themes; there rather is a set of actions being applied as a whole or in various combinations to the different challenges.
APPENDIX 2
III. C Local and regional finance and public services
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Activity |
Expected outputs |
Expected impact |
Start date |
End-date (for CDLR) |
Com |
Evaluation |
Overview : state of progress per date |
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Action 1. To make use of, implement and promote, as appropriate, the existing Council of Europe acquis in the field of local and regional finance, in particular Recommendations Rec (2004) 1 on the financial and budgetary management at local and regional levels and Rec (2005) 1 on financial resources for local and regional authorities |
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Promote the acquis at various national and international events in respect of local and regional finance |
Inclusion of presentations of the acquis at various national and international conferences and seminars If interest from member states, organization of an international event in early 2006. |
Acquis to be used by the Congress, within the Assistance programmes and possibly by other international stakeholders Reference document for member States’ policy makers |
2005/II |
2008/I |
FL / GR |
For MC 2007: Output only |
The acquis, and Rec(2005)1 in particular, was presented to and used by the OECD Network for fiscal relations among levels of government during the discussions of its Statistical Committee on the definitions of the various types of resources. Members are invited to inform the Secretariat of their interest in organising an event. |
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Prepare and disseminate booklets and CDROMs including the acquis |
A booklet including the complete acquis on local (and regional) finance: Charter, Rec(2004)1 and Rec(2005)1 A revised CDROM including the acquis |
Better awareness of the acquis Reference document for member States’ policy and law making |
2005/II |
2006/II |
FL |
For MC 2007: Output only |
Activity completed. The new CDROM was prepared and published in 2006. The preparation of the Handbook on finance at local and regional level was finalised and it has appeared in print. |
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Activity |
Expected outputs |
Expected impact |
Start date |
End-date (for CDLR) |
Com |
Evaluation |
Overview : state of progress per date |
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Action 2. To promote and assess the impact of the Council of Europe’s acquis in the field of local finance |
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A questionnaire to assess the degree of conformity with the guidelines included in the acquis and its impact on policy and law making |
Report on the implementation and impact of the acquis |
Better understanding of the acquis’ strengths and weaknesses Reference document for improving promotional efforts |
2006/I |
2007/II |
FL /GR |
For MC 2007: Output only |
Activity completed December 2008 . Two reports adopted by the CDLR to be published in Spring 2009. |
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Action 3. To make use of and implement, as appropriate, the Committee of Ministers recommendations in the field of local and regional public services |
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Finalisation of the recommendation on local and regional public services |
Recommendation of the Committee of Ministers |
Reference document for member States’ policy and law making |
2004/II |
2006/II |
FL |
For MC 2007: Output and impact |
Activity completed. The revised draft recommendation was presented to a Congress Seminar in Sinaia (Romania) in December 2005. It was finalised by the CDLR at its meeting in May 2006 and the opinion of the Congress was obtained in November 2006. The Committee of Ministers adopted the Recommendation on 31 January 2007. |
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Action 4. To share experiences on leadership, benchmarking and capacity-building for local and regional authorities with a view to identifying good practice and possibly preparing a recommendation of the Committee of Ministers to member States in these fields |
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Drafting of a recommendation on capacity building |
Recommendation of the Committee of Ministers to member states |
Reference document for member states’ policy makers, associations of local and regional authorities |
2005/II |
2007/I |
FS |
Output and impact (through Assistance programmes) |
Activity completed. The work started in October 2005 in the LR-FS committee. The Secretariat was asked to prepare a draft for the recommendation in time for the LR-FS meeting in April 2006. The LR-FS presented the results to the CDLR in May 2006. It gave instructions to LR-FS for taking work forward. A revised draft was presented to the CDLR at its meeting in November 2006, revised, and agreed to. Congress’ opinion was given in June 2007. The CDLR approved the draft and sent it to the Committee of Ministers with a view to its adoption. The CM adopted this text as Recommendation (2007)12 on 10 October 2007. |
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Finalisation of the report on Performance management at local level |
A written report with conclusions and guidelines |
Improving the draft recommendation on public services at local and regional level Reference document for member States’ policy makers |
2003/II |
2005/II |
FL |
For MC 2007: Output and impact |
Activity completed. The report was discussed by the CDLR in November 2005 and finalised by the LR-FL in December 2005. The CDLR adopted it through a written procedure. It has been printed. |
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Finalisation of the report on Accounting rules at local level |
A written report with conclusions and guidelines |
Basis for decision on possible standard setting Reference document for member States’ policy makers |
2003/II |
2005/II |
FL |
For MC 2007: Output and impact |
Activity completed. The report was adopted by the CDLR at its November 2005 meeting and has been printed. |
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Preparation of a report on Internal audit at local and regional level |
A written report with conclusions and guidelines |
Improving the draft recommendation on public services at local and regional level Reference document for member States’ policy makers |
2004/II |
2005/II |
FL |
For MC 2007: Output and impact |
Activity completed. The report was adopted by the CDLR at its November 2005 meeting and has been printed. |
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Activity |
Expected outputs |
Expected impact |
Start date |
End-date (for CDLR) |
Com |
Evaluation |
Overview : state of progress per date |
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Action 5. To examine the possible ways in which local and regional authorities can co-operate with other authorities (inter-municipal co-operation, co-operation with authorities of a different level) and with the private sector (partnerships, concession of public services, contracting out certain elements) for improving public services offered to their citizens |
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Preparation of a report and guidelines identifying good practice in the relationship of local/regional authorities and the private sector |
A written report with conclusions and guidelines |
Basis for decision on possible standard setting Reference document for member States’ policy makers |
2006/II |
2008/II |
FL / GR |
For MC 2007: Interim Output |
Activity completed. Subject to the (late) contribution of Moldova being included, the draft report was adopted by the CDLR in December 2008. |
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Action 6. To consider updating some of the previous reports in the field of local and regional finance and notably the report on “Local finance in Europe” examined by us the 11th session of the Conference (Lisbon, 1996) |
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Preparation of a general report and guidelines on “Local finance in Europe” |
A written report with guidelines |
Better understanding of the situation of local finance in Europe and of its evolution since 1996 Reference document for member States’ policy makers |
2005/II |
2007/II |
FL/GR |
For MC 2007: Output only |
Activity completed December 2008 (See also under action 2). |
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APPENDIX 3
Strasbourg, 13 February 2009
PREPARATION OF THE 16TH SESSION OF THE
COUNCIL OF EUROPE CONFERENCE OF MINISTERS
RESPONSIBLE FOR LOCAL AND REGIONAL GOVERNMENT
Utrecht, 16-17 November 2009
QUESTIONNAIRE TO MEMBER STATES:
CHALLENGES IN THE FIELD OF LOCAL AND REGIONAL GOVERNANCE
WITH REGARD TO THE PREPARATION OF THE FUTURE UTRECHT AGENDA
DEADLINE FOR REPLY: 30 MARCH 2009
For any further information, please do not hesitate to contact the CDLR Secretariat.
([email protected], [email protected] or [email protected]).
Thank you for your co-operation !
Introduction
In order to get a clear picture of the challenges as perceived in Council of Europe member States in the field of local and regional governance in the period 2010-2014 and to prepare the choice to be made by Ministers in respect of the new Utrecht Agenda, member States are invited to reply concisely to the following questions.
Questions
1. Which challenges in the field of local and regional governance is your government likely to face in the future?
2. What actions, if any, does your government envisage taking in order to address the challenges?
3. In respect of which challenges would co-operation at Council of Europe level be useful?
4. What other suggestions would you like to make concerning the preparation of the future Utrecht Agenda, both in terms of substantial themes and/or methodological approaches?
APPENDIX 4
Proposals for projects on local government finances
1. Updating and enlargement of the CDLR pilot study on conformity with CoE guidelines
A first presentation could discuss developments since 2004 based on the new OECD data. Other countries may then be invited to provide similar data. The aim would be to cover as many as possible Council of Europe member States.
2. Why do local authorities in some cases hesitate to utilise their tax powers?
This activity could probably best be initiated by a workshop of experts/members who want to contribute. A workshop needs to be organised well in advance so that the participants have time to prepare their papers.
3. The use of earmarked grants
The pilot study (and the OECD Network 2006) found increasing use of earmarked grants, but the CDLR funding-study did not succeed to identify the reasons for this. Two issues could be explored:
One is when and how are conditional (matching) earmarked grants are used, and how and when non-matching earmarked grants are used. This could be explored by a new and more data and rule-oriented questionnaire if the member countries agree. This would be an activity for the full committee.
The other is to examine ways to measure the changes in “narrowness” of focus of the earmarked grants. This seems more difficult to handle. It would assume that at least 3-4 countries volunteer to make preliminary presentations that could be used to formulate a broader questionnaire and a report on the issue. This could probably best be taken up in a special workshop before deciding about the involvement of the full committee.
4. Are there economies in scale in local government functions?
The idea is to ask members to report information on empirical studies they have done, or researchers in their countries have published. Mr Jorgen Lotz could prepare a brief paper on the issues to examine.
This activity could probably best be initiated by a workshop of experts/members who want to contribute. A workshop needs to be organised well in advance so that the participants have time to prepare their papers.
5. Effects of tendering out and amalgamating local government functions
The idea would be to ask members to report on empirical studies produced in their countries on the economic effects (savings?) of tendering out and amalgamations and, if possible, also the effects on quality and working conditions.
This activity could probably best be initiated by a workshop of experts/members who want to contribute. A workshop needs to be organised well in advance so that the participants have time to prepare their papers.
6. Expert guide on “A European model for compensation for new local government competences”
The study of funding new competences showed that all member countries do compensate local authorities for the costs of new competences delegated to them. This was a surprising result because local authorities often argue that this is not the case. There are many technical questions on how it is done and the study undertaken only mapped the very broad questions.
It could be considered to begin work on a set of guidelines for the most efficient way to organise such compensations, i.e. a set of advices based on what has been the most efficient ways to do it based on the experience of experts in the field.
There are two good reasons to consider initiating this project. One is that it would be based on a more detailed comparison of the experiences with different practices so that the members could learn from each others. The other is that these compensation schemes seem to be an issue where Europe has a lesson for others to study, not only for emerging economies but even more broadly, so that such a set of guidelines would be studied widely.
A first paper could be produced based on national “manuals” or full government documents describing procedures for compensation - where such documents can be made available in languages known to the Secretariat.
7. CDLR workshop on“Public Private Partnerships (PPP)”
Amongst work to be carried out on local and regional finance and public services in 2009, most delegations present at the LR-GR meeting were in favour of organising a workshop on “Public-Private Partnerships (PPP)” as a useful follow-up to give to the European practice report prepared on this topic (see document CDLR(2008)46). Delegations were particularly interested in a European exchange of good practice based on concrete examples of PPP at local level.
With regard to preparing further exchanges on the theme, several delegations thought it useful to take account of work presently being carried out in the context of the European Union and notably by the new European PPP Expertise Centre (EPEC) set up by the European Investment Bank and the European Commission in Luxembourg in September 2008.
In the lead-up to the CDLR meeting, the LR-GR delegation of the Russian Federation informed the Secretariat of its willingness to host such a workshop on PPP in 2009.