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Concept of the Reform of Local Self-Government and Territorial Organization of Government in Ukraine
09 April 2014 16:48

Problems requiring solution

          Constitutional foundations of local self-government have been laid down in Ukraine; the European Charter of Local Self-Government has been ratified; several basic legislative acts creating legal and financial grounds for activity of local self-government bodies have been approved.

          However, since the Constitution of Ukraine and basic legislation on local self-government were approved, the development of local self-government actually took place at the level of territorial communes of cities of oblast subordinance, as the majority of territorial communes turned out to be unable to exercise all authorities of local self-government bodies because of their excessive fragmentation and extremely weak material and financial base.

          Presently, the system of local self-government does not meet public needs. Local self-government bodies operate in most territorial communes in a manner that does not ensure the creation and support of favorable environment needed for comprehensive human development, personal fulfillment, protection of human rights, and for provision of high quality and accessible administrative, social and other services, hereinafter referred to as the public services, to the population by local self-government bodies, and by institutions and organizations created by them.

          Starting from 1991, the number of rural population decreased by 2.5 million people, while the number of villages decreased by 348. At the same time, the number of village councils increased by 1067.

          About 12000 territorial communes have been created in Ukraine. About 6000 communes have less than 3000 residents, and 4809 of them have less than 1000 residents. 1129 communes have less than 500 residents, and most of them have no executive bodies of relevant village councils, no publicly funded institutions or communal enterprises etc. Local self-government bodies of such communes actually cannot exercise the authorities granted to them by the law.

          5419 local self-government budgets are subsidized by over 70%, 483 territorial communes are 90% subsidized by the state budget.

          Ongoing financial support of small local communes through rayon budgets, using the system of equalization subsidies, is burdensome for the state budget, preventing the development of small cities and large towns.

          The system of territorial organization of government also needs improvement in order to increase the efficiency of management of social development in the relevant territory.

          Preservation of disproportionality of administrative and territorial system as the foundation of existence of irrational territorial organization of government (absence of holistic territory of administrative territorial unit of basic level, presence of territorial commune of village, town or city in the composition of another territorial commune or in the territory of another administrative/territorial unit or territorial commune of a rayon in a city) leads to a conflict of competences among local self-government bodies, and to a conflict of competences among local self-government bodies and local executive authorities.

          Structural reforms will enable the achievement of sustainable economic effect subject to harmonization of priorities and stages of the said reforms with the reform of local self-government and territorial organization of government.

          Presently the following problems require efficient and rapid solution:

          worsening quality and accessibility of public services due to resource incapability of overwhelming majority of local self-government bodies to perform their own and delegated authorities;

          deterioration of heating, sewer and water supply networks, and of residential housing, and risk of man-made catastrophes against the background of limited financial resources of local self-government;

          complicated demographic situation in the majority of territorial communes (aging population, depopulation of rural territories and monofunctional cities);

          inconformity of local socioeconomic development policies with real interests of local communes;

          immaturity of forms of direct popular rule, inability of commune members to act in a solidary manner to protect their rights and interests, together with local self-government bodies and local executive authorities to achieve common goals of commune development;

          decreasing level of professionalism of local self-government officials, in particular, due to low desirability of local self-government bodies at the labor market, decreasing prestige of positions, leading to low efficiency of managerial decisions;

          corporatization of local self-government bodies, closed nature and opacity of their operation, high level of corruption leading to decreasing efficiency of use of resources, worsening investment attraction of territories and growing social tension;

          excessive centralization of authorities of executive authorities and financial and material resources;

          removal of local self-government from decision-making regarding land relations, growing social unrest of rural population because of absence of ubiquity of local self-government.

          These problems are aggravated due to the problems of legal and institutional character, as well as by incoordination of reforms in various spheres and the reforms of the system of local self-government and administrative/territorial system of the state.

 

Goal of the Concept

          The goal of the Concept is to identify directions, mechanisms and terms of formation of efficient local self-government and territorial organization of government to create and maintain full-fledged living environment for the citizens, provide high-quality accessible public services, establish institutions of direct popular rule, meet citizens’ interests in all spheres of life in the relevant territory, coordinate the interests of the state and territorial communes.

 

Ways and means of resolving problems

          Provision is made for the following actions to resolve problems:

          identify reasonable territorial basis for the activity of local self-government bodies and executive authorities, capable of ensuring accessibility and proper quality of public services provided by such bodies, as well as necessary resource base;

          create reliable material, financial and organizational conditions to ensure the exercise of own and delegated authorities by local self-government bodies;

          divide authorities in the system of local self-government bodies and executive authorities at various levels of administrative/territorial system on the basis of principle of subsidiarity;

          divide authorities between local self-government bodies and executive authorities on the basis of decentralization of government;

          introduce a mechanism of state control of compliance of decisions by local self-government bodies with the Constitution and laws of Ukraine and of quality of public services rendered to the population;

          involve, to the maximum extent possible, the population into the making of managerial decisions, promotion of development of forms of direct popular rule;

          improve the mechanism of coordination of activities of local executive authorities.

 

Principles of reform of local self-government and territorial system of government

Reforms of local self-government and territorial organization of government will take place on the basis of the following principles:

supremacy of law;

openness, transparency and public involvement;

ubiquity of local self-government;

subsidiarity;

accessibility of public services;

accountability and controllability of bodies and officials of local self-government to the territorial commune;

controllability of local self-governments to executive authorities as regards compliance with the Constitution and laws of Ukraine;

legal, organizational and financial capability of local self-government;

state support of local self-government;

partnership between the state and local self-government;

sustainable development of territories.

Goals of the reform

Ensuring accessibility and high quality of public services

          Public services should be provided in accordance with state standards taking into account the need to ensure:

          territorial accessibility, which means provision of services in the territory of commune where the individual resides;

          proper material and technical base for provision of basic forms of public services (local self-government bodies should possess relevant premises and infrastructure);

          openness of information about services, procedure and conditions of their provisions;

          professionalism of provision of public services.

          In addition, it is necessary to ensure continuous training of officials of local self-government.

Achieving optimum distribution of authorities between local self-government bodies and executive authorities

          Accessibility and proper quality of public services are ensured by Achieving optimum distribution of authorities between local self-government bodies and executive authorities at various levels of administrative/territorial division on the basis of principles of subsidiarity and decentralization.

          Base level local self-government bodies are provided with authorities in accordance with their personnel, financial and infrastructure potential and resources, on a new territorial basis.

          The main authorities of base level local self-government bodies are to ensure:

          local economic development (attract investment, develop entrepreneurship);

          development of local infrastructure, in particular, roads, water, sewage, heat, gas, electricity supply networks, informational networks, social and cultural facilities;

          planning of territorial development of the commune;

          decision-making on territory development (land allocation, construction permits, acceptance of constructed objects into service);

          beautification of territory;

          provision of utilities (centralized supply of water and heat, sewage, waste removal and utilization, maintenance of buildings, facilities and adjacent territories belonging to the commune);

          organization of passenger transportation in the territory of the commune;

          maintenance of streets and roads in populated localities;

          public security;

          firefighting;

          management of schools, kindergartens and non-school educational institutions;

          provision of ambulance services and primary healthcare, disease prevention;

          development of culture and physical culture (maintenance and organization of operation of community centers, clubs, libraries, stadiums, recreation grounds);

          provision of social assistance through territorial centers;

          provision of administrative services through relevant centers.

Base level structural units of territorial bodies of central executive authorities will provide services of:

disease control and prevention;

social protection of the population (payment of pensions, subsidies and compensations, ensuring that benefits are provided);

treasury services;

civil registration.

Main authorities of rayon level local self-government bodies will be aimed at ensuring:

education and training of children in general boarding schools;

provision of secondary level medical services.

Main authorities of oblast level local self-government bodies will be aimed at ensuring:

regional development;

environmental protection;

development of oblast infrastructure, primary of oblast automobile roads, network of inter-rayon and inter-oblast routes of general use transport;

vocational training;

provision of highly specialized medical services;

development of culture, sport and tourism.

The authorities are provided by the state to the local self-government bodies acting at the level of administrative/territorial system that makes it possible and advisable to exercise them in view of staffing, financial and infrastructural potential and resources needed to exercise authorities at the relevant level.

In order to ensure optimum distribution of authorities among local self-government bodies and executive authorities at various levels of administrative/territorial system, it is necessary to:

improve the system of public involvement to the development of managerial decisions and control over their implementation;

identification of sufficient tax base enabling exercise of authorities by local self-government bodies, taking into account objective criteria of state financing of delegated authorities;

creation, at each administrative/territorial level, of representative bodies of local self-government with their own executive bodies;

efficient state control of compliance with the Constitution and laws of Ukraine by local self-government bodies.

Identification of reasonable territorial foundation for activity of local self-government bodies and executive authorities in order to ensure accessibility and proper quality of public services provided by such bodies

          The formation of criteria for administrative/territorial units of various level of administrative/territorial system of the state takes into account the following:

          the administrative/territorial system is composed of three levels:

  • base (administrative/territorial units – communes);
  • rayon (administrative/territorial units – rayons);
  • regional (administrative/territorial units – Autonomous Republic of Crimea, oblasts, cities of Kyiv and Sevastopol);

          the territory of an administrative/territorial unit is indivisible;

          the territory of a base level administrative/territorial unit is determined taking into account accessibility of main public services provided in the territory of the commune (time of arrival of ambulance in urgent cases and of firefighters should not exceed 30 minutes).

          At each level of administrative and territorial system there are relevant local self-government bodies and executive authorities:

          at base level – village, town, city councils and their executive bodies, representative offices (representatives) of some executive authorities;

          at rayon level – rayon councils and their executive bodies, rayon state administrations, territorial bodies of central executive authorities;

          at regional level – Council of Ministers of the Autonomous Republic of Crimea, oblast councils and their executive bodies, oblast state administrations, Kyiv and Sevastopol city councils and their executive bodies, Kyiv and Sevastopol city state administrations, territorial bodies of central executive authorities.

Creation of proper material, financial and organizational conditions enabling exercise of own and delegated authorities by local self-government bodies

          The creation of proper material, financial and organizational conditions and staffing to ensure the exercise of own and delegated authorities by local self-government bodies takes place with adherence to the following principles:

          availability of resources needed to exercise the authorities of local self-government bodies as defined by the law;

          calculation of amount of equalization subsidy on the basis of unified standards of provision of public services;

          provision of transfers from the state budget directly to each local budget;

          establishment that taxes and fees related to the territory of corresponding administrative/territorial unit will form the financial basis of exercise of authorities by local self-government bodies;

          assignment of a share of funds received from income tax of newly created legal entities to the local budgets for five years since the date of investment into such legal entities;

          authorizing local self-government bodies to regulate the rates of local taxes and fees;

          prevention of granting of tax breaks by other local self-government bodies and executive authorities leading to a decrease of own income of local budgets. Local tax and fee breaks can be granted only by the local self-government body that receives such taxes and fees into its budget;

          providing local self-government bodies with access to credit resources for investment development by means of simplified review of borrowings and local guarantees, and their balancing with means of state control aimed at preventing bankruptcy of objects of communal property right;

          increasing transparency and efficiency of use of budget funds by means of introduction of performance budgeting for all local budgets;

          assignment of property, in particular land, that belongs to territorial communes of villages, towns and cities (communal property), objects of joint property of territorial communes of villages, towns, cities, rayons, oblasts, and of proper base of taxation, as the material basis of local self-government;

          granting territorial communes the right to manage land resources within their territories, to join their property and resources in the framework of cooperation of territorial communes to perform joint programs and more efficient provision of public services to the population of adjacent territorial communes;

          maximum involvement of population to managerial decision-making on issues of local significance and promotion of development of forms of direct popular rule;

          introduction of efficient mechanisms of public participation in elaboration of important managerial decisions by local self-government bodies, in particular, as regards determination of the strategy of development of the territorial commune, approval of statutes of territorial communes, and draft urban planning documentation (general plans of development of cities, towns, villages etc.);

          providing general meetings of citizens at their places of residence, under the law and in accordance with the statute of territorial commune, with the right to initiate extraordinary report by officials of local self-government to the territorial commune, as well as obligating local self-government bodies and their officials to substantiate their decisions on taking or non-taking into account the decisions of general meetings of the commune;

          establishment of consultative/advisory bodies under local self-government bodies in order to conduct public consultations, promotion of public expertise of draft decisions and approved decisions of local self-government bodies;

          ensuring the right of territorial communes to hold local referenda;

          improvement of the procedure of establishment of bodies of public self-organization, identification of a clear procedure of delegation of a part of authorities of local self-government bodies to them, as well as of provision of money to exercise the said authorities, spending such money by them, and reporting about the use of money;

          spreading the practice of establishment of bodies of public self-organization, in particular, in territorial communes that include residents of more than one settlement;

          introduction of a mechanism of conduct by local state administrations of state control of compliance of decisions of local self-government bodies with the Constitution and laws of Ukraine, and control of quality of public services provided to the population;

          depriving local councils from the right to express no-confidence to heads of relevant local state administrations.

Stages of implementation of the Concept

          The Concept will be implemented in two stages. During the first preparatory stage (2014) provision is made for:

          priority amendment of the Constitution of Ukraine as regards the creation of executive bodies of oblast and rayon councils and distribution of authorities among them;

          drafting of projects and approval of legislation to introduce a mechanism of direct popular rule, improvement of legal regulation of procedures of conduct of general meetings of citizens at their places of residence and introduction of additional guarantees of operation of bodies of self-organization of population, creation of favorable legal conditions for broad involvement of population into managerial decision-making by local self-government bodies;

          creation of legal base for realization of the right of territorial communes to voluntary association, providing for state assistance to united communes for five years since their creation for the purposes of improvement of service infrastructure and transport accessibility;

          creation of legal base for realization of the right of territorial communes to cooperate on the basis of resource/organizational cooperation and obtaining of state support for implementation of projects of such cooperation;

          legal regulation of a new administrative/territorial system;

          conduct of a simulation of administrative/territorial units in regions and develop draft legislation needed to complete the formation of a new administrative/territorial system;

          identification of the Ministry of Regional Development, Construction, Housing and Communal Services of Ukraine as the main central executive authority responsible for the conduct of local self-government reform, and develop a mechanism of coordination of the said reforms at the level of the Cabinet of Ministers of Ukraine;

          conduct of a large-scale public awareness campaign on reforms of local self-government and territorial system of government;

          completion of formation of legal base on operation of local self-government bodies and executive authorities on the new territorial base with identification of their authorities and resource support in accordance with the requirements of this Concept.

          During the second stage (2015-2017) provision is made for:

          unification and standardization of public services provided to the population by local self-government and executive bodies, taking into account the principles of maximum accessibility of services for consumers, and legal establishment of equal conditions for their proper funding;

          conduct of institutional reorganization of local self-government and local executive bodies on a new territorial basis;

          conduct of local elections taking into account the reformed system of local self-government bodies;

          improve the system of communal territory planning, resolve the issue of providing the newly created communes with schemes of territorial planning and general plans.

Expected results

          The implementation of the Concept will promote:

          strengthening legal, organizational and material capabilities of territorial communes, local self-government bodies, and the conduct of their operations in accordance with principles and provisions of the European Charter of Local Self-Government;

          accessibility of public services and improvement of their quality;

          introduction of a mechanism of control, by local state administrations and the population, of public services provided by local self-government bodies and territorial bodies of central executive authorities;

          introduction of standards (norms) of quality of public services provided to the population by local self-government bodies of base and regional level, and of criteria of quality assessment;

          creation of favorable legal conditions for maximum broad involvement of the population into managerial decision-making, as well as development of forms of popular rule;

          formation of an efficient territorial system of local self-government and local executive bodies to ensure sustainable socioeconomic development of relevant administrative/territorial units;

          creation of united territorial communes capable of resolution of issues of local significance independently or through local self-government bodies;

          socioeconomic development of territorial communes and regions;

          stimulation of economic development of territories as a result of improvement of mechanisms of influence of local self-government bodies on identification of priorities of local economic development;

          identification of clear boundaries of each administrative/territorial unit, ensuring ubiquity of jurisdiction of local self-government bodies in the territory of relevant administrative/territorial unit and prevention of existence of other administrative/territorial units of similar level within the communal territory;

          creation of executive bodies of oblast and rayon councils;

          change of status of local state administrations from universal competence bodies into control and oversight bodies inside the system of executive authorities with the function of coordination of territorial bodies of central executive authorities within relevant territory;

          ensuring division of authorities among base and regional local self-government bodies, local state administrations and territorial bodies of central executive authorities.

Volume of financial resources

          The financing of measures to implement the Concept is provided by state and local budgets within the limits of appropriations provided in budgets of relevant territorial communes for relevant year, as well as by international technical and financial assistance.

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