WORKING GROUP PROVINCES

Working Paper Territorial reforms in Europe: The situation of the provinces.

Over the last years, main European countries have updated its territorial structures adapting them to the new reality of towns and the priorities of the governing authorities. Therefore, we have many examples and different approaches of how to face the fitting of the provinces into the European administrative scenery. We find different options that go from the complete invalidation of the provinces to its revision and reorganization, or even the reinforcement of their competences, leading to an incessant debate about their continuity and the relevance of their functions

Javier Moliner presenting PARTENALIA in the last FEMP meeting (Spanish Federation of provinces and municipalities) Held in JAEN

In this regard, the case of France is paradigmatic because the country has gone over the three different situations: once established the dĂŠpartements- days before the French Revolution in 1789- their expiration date was even announced: 2020. The French Prime Minister Manuel Valls did announce it in a press conference, astonishing everyone. After the internal dissent, any reference to the abolition of the dĂŠpartements was finally removed from the law, which was finally passed in the Parliament thus substantially modifying the administrative map of France.

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Working Paper In this regard, the case of France is paradigmatic because the country has gone over the three different situations: once established the départements- days before the French Revolution in 1789- their expiration date was even announced: 2020. The French Prime Minister Manuel Valls did announce it in a press conference, astonishing everyone. After the internal dissent, any reference to the abolition of the départements was finally removed from the law, which was finally passed in the Parliament thus substantially modifying the administrative map of France.

The so called MAPTAM Law (Modérnisation de l’action publique territoriale et affirmation des métropoles), which was enacted in January 2014, refers to the départements as responsible for the management of social benefits, the people’s autonomy and the solidarity between territories, redraws regional frontiers through the fusion of adjacent regions and creates 15 metropolitan cities: Lille, Rouen, Brest, Rennes, Nantes, Bordeaux, Toulouse, Montpellier, Nice, Grenoble, Strasbourg, Nancy. The Law acknowledges a special status to the three main French cities: Paris, Lyon and Marseille. The metropolitan cities are urged to negotiate the management of three out of a list of eight competences of the départements.

Toghether with the MAPTAM Law, some months later, in August 2015, The NOTRE Law (new territorial organisation of the Republic) was passed, invalidating the “clause de compétence génerale” which allowed all the local authorities to make politics with a local impact in their territories. Therefore, regions as well as local authorities have defined competences and they can only act over those issues stated by law or over those areas not prevented by law.

One of the main functions of the provinces in France is fighting against poverty and exclusion, and providing assistance to the elder people, childhood and disabled.

The ‘départements’ also manage the main allowances: RSA– Minimum Guaranteed Income-, APA –Dependency benefits, and PCH (compensation allowance to the disabled). They also deal with the schools' management, disabled people's transport and construction and maintenance of roads.

The ‘départements’ share competences with the regions in these areas: culture, sport, tourism, regional languages, adult education

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Manuel Valls, First Minister of France © AFP 2016/ PATRICK KOVARIK

Working Paper Whereas in Italy, the reform – which was considered on the same date – went much further, condemning the provinces to a situation of scarcity and, on a later stage, to its progressive invalidation. This process should end up in 2017 if the referendum on the passing of the constitutional reform – planned for October 2016- finally has a positive result.

The reform, which was passed in 2014, encourages the fusion of municipalities and creates fourteen metropolitan cities: Rome, Naples, Milan, Turin, Palermo, Bari, Catania, Firenze, Bologna, Genoa, Venice, Messina, Calabria and Cagliari. The reform hollowed competences out of the provinces which are no longer called provinces but “Area Vasta”. The definitive abolition is planned to end up in 2017.

The Delrio reform, so called in honour to the minister who launched it, had a controversial implementation because far from meeting the objectives, it has been proved to be unable to fulfil the savings target in public accounts and has lead to the collapse of the provinces, which had to assume budget cuts, without the reduction of their functions. This point was strongly criticised in several resolutions of the Italian Court of Auditors. In 2015 most of the provinces, unable to present healthy accounts, had to be bailed out.

The measures adopted, which were expected to result-in the most conservative estimate- in immediate cost savings of between 500-1,000 million Euros, maintaining the provinces’ activity (staff salaries and day-to-day running) have been proved to be financially insufficient (sale of real estate, competences reduction, agreement between the State and regions to share savings), to the point of being necessary a bailout of 500 million Euros in 2016 to avoid the collapse. This fact has caused a deterioration of the public services that the provinces are still providing: the construction of public schools, collective transport planning, environmental protection. The competences transferred to the regions are agriculture, forestry, hunting, fishery, culture, environment and energy.

On the other hand, the debate in the United Kingdom, one of the most centralized countries in the world, has turned towards the opposite direction, and the government and county councils (comparable to the Spanish diputaciones) are negotiating the devolution (decentralization) for 2020, under the principle of one territory, one budget. Therefore, local authorities and their productive sectors can face in a more effective way the economic fluctuations by adapting themselves to the circumstances and specific needs of their territory. The devolution is seen as an opportunity to strengthen local governments, democratize decisions and as an incentive for economic growth and for the public services’ improvement.

Picture of the campaign set in the United Kingdom for the Localgov association claiming for a greater devolution

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Working Paper But the process is not that simple and requires a political commitment and special attention; it is a first step that will determine future negotiations. The agreements on transfer of ‘devolution’ must be negotiated between the central government and the parties concerned. The UK Treasury has the last word on this issue. In the cities, regions and other areas, combined Authorities have been created to formalize the devolution (Cornwell, Sheffield, Tess Valley, Liverpool, West Midlands and West Yorkshire).

Combined Authorities are governments of a specific area that gather in order to commit themselves to managing services such as transport or employment policies, without involving the disappearance of the governments that gathered. It is a collaborative model. The competences of the new combined Authorities would be mainly those related to health, economy and social issues Nowadays the County Councils have different competences such as public health, elder people assistance, nursery schools, education, economic regeneration, roads, transport, waste treatment, civil protection, libraries, parks’ maintenance and trade regulations.

On the other hand, Germany has restructured its administrative organisation through the fusion of towns and the creation of communities of municipalities. Several reforms and the creation and transfer of competences to the metropolis (city-states) still remain unsolved. From 2015, the arrival of refugees from the conflict areas in Middle and Near East has highly compromised the budgets of the local intermediate governments.

At the second level of the Administration, Germany distinguishes between rural districts (Landkreis or Kreis) and urban districts (Kresifreie Stadt o Stadtkreis). In Germany there are 295 rural districts (Kreis) and 108 urban districts (Stadtkreis).

Both the Landkeis and the Stadtkreis have autonomy, their own governing bodies in their territories. Some of their competences are: health, usually hospital equipment, civil protection, social benefits, youth and childhood protection, vocational training and the specialised educational centres, roads, driving licences management and housing.

In 2014 too, Belgium approved its sixth reform of the state basically with the objective of improving the decision-making procedures between federal, regional and local governments, seeking to clarify each level’s competences heading towards the decentralization of the country.

That reform mainly affected the regions, which assumed new competences. The reform barely influenced the role of the provinces in Belgium, although it did encourage them to work for the raising of supra-municipal bodies without creating new levels of administration.

The Belgian provinces have as a main objective to mentor the towns in specific areas such as budget, accounts and assistance in the event of disasters. Belgian provinces have full competences on education, culture, social assistance, heritage protection, language use promotion, roads and rivers maintenance, contracting, environment and housing.

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SPECIAL REPORT ON ITALY PARTENALIA

Who moved the italian provinces?

Notes about the reform of provinces in ITALY In August 2011, the ECB sent a letter to the Italian Prime Minister Silvio Berlusconi “Encouraging the government to take immediate measures to guarantee a revision of the Public Administration in order to meet the companies’ requirements. Public entities should incorporate efficiency indicators (specially in justice, health and education). A strong commitment is needed in order to eliminate or merge some of the intermediate administrative levels, such as the provinces In 2013, Mario Monti’s government initiated an institutional reform of the country and the provinces that was declared inconstitutional2. The reform modified the election of the bodies, reduced its functions, reorganized its limits and reduced its quantity. The reform also considered the creation of ten metropolitan cities. Highly confusing, the reform was dismissed, amongst other reasons because it was introduced by means of urgent procedure and because the Government was unable to quantify the savings of the reform as the functions of the provinces before and after the reform were not clearly defined.

Then a new reform is introduced, the provinces kept functioning but they transfer most of their competences to the towns and regions. The provinces maintain competences in environmental issues, schools, transport and land-use planning. Ten metropolitan cities are created.

In 2014, under Matteo Renzi’s government, the Delrio reform was approved, with 260 votes in favour (il Partito Democratico, il Nuovo Centrodestra, Secelta Civica e Popolari per l’Italia), 158 votes against (Forza Italia, M5S, Lega, Sel e Fratelli) and 7 abstentions. The reform aimed at “being the first step of a wider reform plan that is focused on citizens and the need of reducing bureaucracy, improving services and a better use of the public resources”.

Once the Law was approved, the take-over of the provinces’ functions by the regions and towns is being done at a slower pace than expected, meanwhile provinces are still carrying out its functions, but the approved Law enforces them to reduce 1,200 million euros in 2015 and another 2,000 million euros in 2016, without the simultaneous reduction of its basic functions. Furthermore, the Law enforces to cut the 50% of the provinces’ staff, without clearly stating which of the functions must be eliminated. This is causing serious treasury problems in the provinces.

In April 2015, the Italian Court of Auditors issued a resolution “ the reorganisation of the regulation of provinces and its financial impact is a major concern”4 in the application of the reform. The resolution also warned of the impact of the new measures that reduce the provinces’ resources, “that could be the source of great stress in the financial balances, specially in those institutions with weaker structures” (Page 15).

The aforementioned report points out the precarious situation of the provinces after the reform, with the obligation of cutting 2,900 million euros in two years, that means a reduction of the resources allocated to the essential services, the investment falling to a 60% decreases the quality of the services. The imposition of allocating those 2.9 million euros of provincial taxes to pay to the State instead of committing them to the provincial functions has as a result the lack of furniture in the schools, affects the road maintenance, the reduction of the number of environmental impact assessments or the blockade of the provincial police.

The Italian Court of Auditors also sounds the alarm on the reorganisation of provinces. The report about local financing emphasizes that the available resources may not be sufficient “to guarantee the essential services”. Without interventions, “ the gap between the resources and the current needs” is turning into “a deep gap, hard for all the sector to sustain”.

KEY DATES 19

JUNE

“Ballotage”, Second round of the local elections

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OCT

Referendum constituonal reform

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SEPT

Italian Prime Minister Matteo Renzi | Sean Gallup/Getty Images

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Matteo Renzi’s Democratic Party lost the battle for Rome but won Italy’s business capital Milan by a small margin after Italians headed to the polls on Sunday to elect mayors and city councillors in 1,342 cities.

The outcome of the second round will set the political tone going into October’s referendum on proposed constitutional changes to shrink the power and size of the Italian senate. Renzi has repeatedly stated he’ll quit if he loses that vote.

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SPECIAL REPORT ON ITALY PARTENALIA

In September 2015, the Rating Agency Moody’s issued a favourable opinion about the measures on accounting harmonisation, the regeneration of the debt of towns and provinces, the rationalisation of the local subsidiaries and the central purchasing body, but issues a negative evaluation on the reform of provinces, because there is a lack of clarity in the redistribution of the functions and consequently, the redistribution of expenses.5

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Results of the Local elections

The reform of provinces was expected to result - in the most conservative estimate- in immediate cost savings of between 500-600 million euros, reaching even 1,000 million euros savings in the first year.6 These predictions have been proved to be totally fictitious, as it was claimed by the Italian Court of Auditors (Resolution 15/2015), foreseeing a bankruptcy of the provinces in a few months. The measures adopted to meet the savings target and maintain the provinces’ activity (staff salaries and day-to-day running) have been proved to be financially insufficient (sale of real estate, competences reduction, agreement between the State and regions to share savings), to the point of being necessary a bailout of 500 millions euros in 2016 to avoid the collapse.

Therefore, the promised savings were never achieved, the provinces are now in an unsure situation not being able to get involved in projects or define the staffs’ role within the Administration. The provincial budgets were usually adopted with a 3-year time horizon. In 2015 none of the provinces was able to present a balanced budget with a forecast of more than one year.

The Law 190/2014 estimates running costs’ savings by means of an automatic transfer from the provinces to the State of 1,000 million euros in 2015, 2,000 million in 2016 and 3,000 million in 2017. In contrast, the expenses are not reduced at the same rate. Taxes continue to be collected on behalf of the province, but are directly derived to the central budget, and therefore the provinces become, in practice, mere tax collectors for the State, for quite different purposes of those of the public provincial services.

Taxes have remained at the same level for the citizens and the public deficit has barely been reduced in spite of the reforms carried out.

There is no evidence of the savings in the Administrations after the reform and regarding the political staff, 2,159 political posts have been suppressed in the provinces. However, in the towns of up to 10,000 inhabitants, the number of town councillors increased to 26,096 and the advisors to 5,036.

The number of directors also increased in hundreds of towns and the appointment of two councillors in the towns of up to 1,000 inhabitants was reintroduced. Therefore, the Law not only did not abolish the provinces, but it resulted in insignificant savings and increased the number of political posts.

In short, the invalidation of the provinces in Italy has not met its objectives, leading to a deterioration of the public services, far from leading to savings for the citizens - who maintain the same level of taxation than before the reform - and far from contributing to the reduction of the public deficit as it was promised.

Check all the municipalities at: www.larepubblica.it

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COMPETENCES OF THE PROVINCES IN EUROPE

In a nutshell ITALY After the reform was approved in 2014, provinces were not abolished but replaced by an assembly of mayors from the towns of the province. The president of that assembly is elected by the mayors. The Law 7.4.2014 has not already clearly defined its competences. Provinces are recognised by the constitution (article 114). The current competences are limited to the construction of schools, environmental protection and assessment, transports and roads. The rest of the competences have been transferred to towns. New institutions and the metropolitan cities, that will replace the provincial administration, are established.

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The fusion of towns is permitted and encouraged With the aim of reducing administrative costs Creation of mayors’ assemblies that replace councillorships. Direct election of provincial posts disappears.

Competences are transferred to towns and regions except of the construction of public schools, the collective transport planning, environmental protection.

Competences transferred to the regions: agriculture, forestry, hunting, fishery, culture, environment and energy.

Creation of the città metropolitane: Napoli, Milano, Torino, Bari, Bologna, Firenze, Genova, Venezia, Reggio Calabria and Roma. In the future: Palermo, Messina, Catania, Cagliari, Trieste.

They are territorial bodies of big areas with these functions: strategic administration and planning, infrastructures, urban road communications, mobility, computerization and digitalisation, promotion and coordination of the economic and social development.

A total of 15 new territorial areas that will replace the provinces.

The opposition considers this decree confusing and unable to generate savings.

A report of the Court of Auditors claimed that the costs, instead of being reduced, would increase

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BELGIUM In 2014, Belgium approved its sixth reform of the state basically with the objective of improving the decision-making procedures between federal, regional and local governments, seeking to clarify each level’s competences heading towards the decentralization of the country. A reform that mainly affected the regions, which assumed new competences. The reform barely influenced the role of the provinces in Belgium, although it did encourage them to work for the raising of supra-municipal bodies without creating new levels of administration.

The Belgian provinces have as a main objective to mentor the towns in specific areas such as budget, accounts and assistance in the event of disasters. Belgian provinces have full competences on education, culture, social assistance, heritage protection, language use promotion, roads and rivers maintenance, contracting, environment and housing.

Provinces are subordinated to the Regions, but have their own autonomy.

Those competences absorbed by the regions in the sixth reform of the state are related to the employment politics, family allowances and social benefits, amongst others. A big part of the personal income tax revenue is also transferred to the regions.

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COMPETENCES OF THE PROVINCES IN EUROPE

In a nutshell GERMANY Over the last years, Germany has restructured its administrative organisation through the fusion of towns and the creation of communities of municipalities. Several reforms and the creation and transfer of competences to the metropolis (city-states) still remain unsolved. From 2015, the arrival of refugees from the conflict areas in Middle and Near East has highly compromised the budgets of the local intermediate governments.

At the second level of the Administration, Germany distinguishes between rural districts (Landkreis or Kreis) and urban districts (Kresifreie Stadt o Stadtkreis). In Germany there are 295 rural districts (Kreis) and 108 urban districts (Stadtkreis).

Landkreis are found throughout all the German territory, except in the city-states of Berlin, Hamburg and Bremen. The urban districts (Stadtkreis) are in the medium-sized urban cities (more than 100,000 inhabitants).

Both the Landkeis and the Stadtkreis have autonomy, their own governing bodies in their territories. Some of their competences are: health, usually hospital equipment, civil protection, social benefits, youth and childhood protection, vocational training and the specialised educational centres, roads, driving licences management and housing.

Landkreis have an assembly that is elected every 5 years (the Krestag). They do not have their own financial resources, its budget is made up of the contributions from the mayors members.

The scientific Félix Rösel of the LFO Institute in Dresde warned against the “considerable political cost” of local government’s reform. Regional reforms in Saxony and Brandeburg, as well as in Austria and Switzerland, have demonstrated that the expected savings never occurred.

Ten years ago, Brandenburg introduced the minimum size of 5,000 inhabitants for municipalities. Costs were slightly reduced.ii

UNITED KINDGDOM After the referendum in Scotland, the Prime Minister David Cameron promised a wider transfer of competences to the local powers throughout the United Kingdom. In this regard, steps have been taken towards a process that must be concluded in 2020.

England is one of the most centralized countries in the world. Changing this situation needs political commitment and special attention. The current process of ‘devolution’ is a first step that will determine future negotiations. In those negotiations the intermediate local authorities have much to say.

The agreements on transfer of ‘devolution’ must be negotiated between the central government and the parties concerned. The UK Treasury has the last word on this issue. In the cities, regions and other areas, combined Authorities have been created to formalize the ‘devolution ´ (Cornwell was the first rural county to do it, Sheffield, Tess Valley, Liverpool, West Midlands and West Yorkshire).

Combined Authorities are governments of a specific area that gather in order to commit themselves to managing services such as transport or employment policies, without involving the disappearance of the governments that gathered. It is a collaborative model.

The competences of the new combined Authorities would be mainly those related to health, economy and social issues.

Nowadays the County Councils have different competences such as public health, elder people assistance, nursery schools, education, economic regeneration, roads, transport, waste treatment, civil protection, libraries, parks’ maintenance and trade regulations.

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COMPETENCES OF THE PROVINCES IN EUROPE

In a nutshell FRANCE The new French Law of the administration reform of 27 January 2014 appointed the ‘départements’ responsible for the management of social benefits, the people’s autonomy and the solidarity between territories. This means more than a half of their budget. In order to relieve the burden of social benefits in the budget of the ‘départements’, the central administration accepted to pay a part of the cost of those social benefits.

The aforementioned reform modified the regional map due to the fusion of some regions. Until year 2020 no more further reforms are planned. However, there is a debate still unsolved about the sharing of competences between the different administrative levels and the endowment of their own competences to the newly created metropolitan cities.

Finally, the ‘départements’ will not disappear in France. They will keep all their competences except for transport, which has been transferred to the regions and association of municipalities.

Their main competences are: Social Action: Provinces have responsibility for the fighting against poverty and exclusion, and for the elder people, childhood and disabled assistance.

The ‘départements’ manage the main allowances (RSA– Minimum Guaranteed Income- and APA –Dependency benefits) Schools’ management Disabled people transport Land planning: Rural development, water management and civil protection in case of disaster, fire protection and environmental issues.

Moreover, ‘départements’ share competences with the regions in these areas: culture, sport, tourism, regional languages, adult education, environment.

Association of municipalities Except in the mountain areas and islands, the associations of municipalities will need to reach the threshold of at least 15,000 inhabitants from year 2017, compared to the 5,000 that were necessary before the reform came into force. The associations of municipalities will replace the towns in the waste collect and treatment, touristic promotion, hosting areas for gypsy population and, from 2020, water treatment plants.

Main own competences of the provinces GREAT BRITAIN ITALY FRANCE BELGIUM GERMANY *These are main big areas, there may be slight differences in the application and quality of the competences, depending on the country. The information in this graph is illustrative.

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