Assessment of the reform to restructure municipalities and services: Reform should be seen through
The reform to restructure municipalities and services (Paras) launched in spring 2005 has activated local authorities and raised discussion on core functions and services in municipalities. The assessment report to be presented on 17 March 2009 to Mari Kiviniemi, Minister of Public Administration and Local Government, shows that so far the reform process has mainly focussed on local government structures. With a general deterioration in the economy overall, local authorities will be facing financial challenges and productivity issues sooner than anticipated. Indeed, the Paras project should be further pursued.
From structures towards revamping services
The reform to restructure municipalities and services has taken shape most visibly in terms of structural decisions, and progress has been considerable in structural reforms. Municipal mergers and collaboration between municipalities have offered concrete solutions to obvious problems. However, solutions to complex and complicated issues, such as developing service provision and regional service networks, are not as easily achieved. It is essential to initiate processes to develop in these areas in a judicious manner. In the current economic situation, however, localauthorities will have to carefully evaluate whether they have adequate resources to allocate to the development of service provision.
The assessment highlights that questions related to the management of expenditure structures have been emphasized in the reform instead of issues related to securing revenue in local government. Local authorities and government steering will need to examine which aspects create thriving municipalities and functional strategies. Unless it becomes possible to coordinate, by means of government steering, the burden caused by all the obligations of local government, any benefits brought about by better service productivity become void.
More comprehensive development of urban regions
The need to pursue with reforms is clearly apparent in urban regions. It is important to strengthen all forms of collaboration between different municipalities in urban regions and bring into practice the plans already drawn up for them. More comprehensive and binding development of urban regions is called for in this context.
The assessment experts propose three alternative approaches to enhancing the steering of urban regions development processes: allowing urban regions to evolve freely through their own choices; presenting minimum terms and conditions for cooperation by means of a legislative act on urban regions; or introducing a practice of drawing up agreements for urban regions, where central government, the municipalities in the urban region and regional councils are the partners to the agreement. The assessment report concludes that the most expedient option would be to introduce a practice of agreements, which allows a volitional state in the urban regions and ensures the interests of central government. Agreements that bind both parties should include a target situation where an urban region that is dynamic and robust and provides adequate services is created and that concrete measures are adopted for reaching the target.
Theassessment of the planning phase in the reform to restructure municipalities and services was commissioned by the Ministry of Finance. The University of Lapland in collaboration with the University of Tampere carried out the evaluation. The assessment data consists of plans progress in local government and urban regions and extensive interview material collected in the municipalities. The functioning of the evaluation procedure in municipalities in very difficult financial circumstances was also examined in this context.
Inquiries:
Mr Jari Stenvall, tel. 358 40 828 4350, Professor, Assessment Project Director / University of Tampere
Ms Hanna Vakkala, tel. 358 40 553 8326, Researcher / University of Lapland
Mr Antti Syväjärvi, tel. 358 400 606 244, Professor / University of Lapland
Ms Inga Nyholm, tel. 358 9 1603 2212, Senior Adviser, Ministry of Finance