Concept of local self-governance and territorial power reforming

Cabinet of ministers of Ukraine

Prescription

of 1^st April 2014 # 333-р

Kyiv

 

On approval of the Concept of local self-governance and territorial power reforming in Ukraine

 

1. To approve the Concept of local self-governance and territorial power reforming in Ukraine that is attached.

2. Ministry of Regional Development, Construction, Housing and Communal Services of Ukraine in co-operation with interested central and local bodies of executive power and with involvement of local self-governing bodies and their All-Ukrainian associations, within three months and according to prescribed procedures, shall develop and submit to the Cabinet of Ministers of Ukraine an Action Plan on implementation of the Concept, approved by this prescription.

             Prime-Minister of Ukraine                                                                 A. Yatsenyuk

Ind.71

 

APPROVED
by Prescription of the Cabinet of Ministers of Ukraine
of 1^st April 2014 # 333-р

CONCEPT
of local self-governance and territorial power reforming in Ukraine

Problems to be solved:

In Ukraine, constitutional principles of local self-government has been established, European Charter on Local Self-Government has been ratified, a number of basic legal acts that create the legal and financial framework for local government have been adopted.

Still, during the adoption of Constitution of Ukraine and basic legal acts on local self-governance, local self-governance, in fact, was developed only at territorial communities’ level of oblast towns/cities because the majority of territorial communities were too small, had extremely poor material and financial base and, thus, were unable to perform all responsibilities of local self-governing bodies.

To-day, local self-governing system does not meet society needs. In most territorial communities, local self-governing bodies do not ensure the creation and maintenance of favorable living environment necessary for comprehensive person’s development, his/her self-realization, rights’ protrection as well as provision the population with highly qualitative and affordable administrative, social and other services on their territories (hereinafter – public services) by local self-governing bodies and, created by them, institutions and organizations.

Since 1991, the rural population has declined by 2.5 million, and the number of villages – by 348 units. However, the number of village councils increased by 1067 units.

12 000 territorial communities have been created in Ukraine. Population of more than 6 000 communities is less than 3 000 persons, including 4 809 communities with less than 1 000 inhabitants and 1 129 - with less than 500 inhabitants. Tha majority of them do not have executive bodies corresponding village councils, budget institutions, communal enterprises, etc. In fact, local self-governing bodies of these communities cannot fulfill functions, provided by legistation.

5 419 budgets of local self-governance is donated for more than 70%. 483 territorial communities are for 90% maintained due to state budget funds.

Continuous financial support of small local communities through rayon budgets with the use of equalization dotations is a burden of state budget and hinders the development of small towns and large villages.

System of territorial power organization also needs improvement to increase the effectiveness of public administration on corresponding territory.

Disproportionate administrative-territorial structure as the basis of irrational territorial organization of power (no integral territory of the administrative-territorial baseline unit; territorial communities of villages, towns, cities inclusion into another territorial community or in another local government area, or rayon territorial community within a town/city) results in conflict of competence both between local self-governing bodies and local self-governing bodies and local executive power.

Structural reforms will make it possible to achieve stable economic effect providing harmonization of priorities and stages of these reforms with the reform of local self-government and territorial organization of power.

Currently, following problems need effective and quick solution:

• deterioration of public services quality and accessibility due to resource disability of the majority of local self-governing bodies to perform their own and delegated responsibilities;
• worn heating, sewerage and water supply networks, housing and risk of man-made disasters under conditions of limited financial resources of local self-governing bodies;
• complicated demographic situation in the majority of territorial communities (population aging, empty villages and mono-functional towns);
• non-compliance of local policy on social and economic development with real territorial communities’ interests;
• undeveloped forms of direct democracy, inability of community members for joint actions aimed at their rights and interests protection and common community goals/objectives in cooperation with local governments and local executive authorities;
• decrease of local self-governing officials’ professionalism due to low competitiveness of local self-goverining bodies in the labor market, lowering of the level of positins’ prestige, which results in low efficiency of management decisions;
• corporatisation of local self-government, secrecy and lack of transparency of their activities, high level of corruption, which reduces the resources effectiveness, deterioration of territories’ investment attractiveness and increases social tension;
• too centralized responsibilities of executive power bodies and financial and material resources;
• removal of local governments from solving land related  issues, increased social tension among rural population due to lack of ubiquity of local self-government;

Above problems are becoming even more severe due to legal and institutional challenges as well as in-compliance of reforms related to different spheres of  local self-governance and administrative and territorial reforming.

Concept goal:

The Concept goal is to define the trends, mechanisms and terms and terminations of establishing the effective local self-government and territorial organization of power to create and maintain complex living environment for citizens, providing high quality and affordable public services, establishing the institutions of direct democracy, meeting the interests of citizens in all life spheres on corresponding territory, reconciling the interests of the state and local communities.

Ways and methods of problems’ solution

It is planned to solve the problems due to following:

• identification of justified territorial basis for local self-governing and executive bodies operation to ensure affordable and qualitative public services provided by them and relevant resource base;
• creation of relevant material, financial and organizational environment to fulfill by local self-govering bodies both their own and delegated responsibilities and functions;
• differentiation of mandates in the system of local self-government and executive bodies at different levels of administrative-territorial structure and  on the principle of subsidiarity;
• differentiation of of mandates between executive and local self-governing bodies on the grounds of decentralization;
• introduction of a mechanism of state control over the compliance of local self-govening bodies’ decisions to Constitution and Laws of Ukraine, as well as control over the quality of public services;
• maximim population involvement into decision-making processes and promotion of direct democracy development;
• improvement of coordination mechanism of local executive bodies’ operation.

Principles of local self-governance and territorial power reforming

Local self-governance and territorial power reforming grounds on following principles:

• rule of law;
• openness, transperance and civic involvement;
• ubiquity of local self-government;
• subsidiarity;
• availability of public services;
• accountability of local self-governing bodies and officials to territorial community;
• accountability of local self-governing bodies to executive power in the issues related to compliance with Constitution and Laws of Ukraine;
• legal, organizational and financial capability of local self-governing bodies;
• state support to local self-governance;
• partnership between the state and the  local self-government;
• sustainable territories’ development.

Reform’s objectives

Provision of affordable and qualitative public services

Public services shall be provided in accordance with state standards and shall take into account the need of ensuring the following:

• territorial accessibility, i.e. services shall be provided on the territory where the person lives;
• appropriate material and technical resources necessary for public services provision (local self-governing bodies shall have at their disposal appropriate facilities and infrastructure);
• open information on the service as well as order and conditions of its provision;
• professionalism of public services.

Besides, it is necessary to ensure continuous training of local self-governing officials.

Optimal division of responsibilities and functions between local self-governing and executive bodies

Accessibility and appropriate guality of public services is ensured due to optimal differentiation of responsibilities between local self-governing and executive bodies at different levels of administrative and territorial structure and in accordance with the principles of subsidiarity and decentralization.

Local self-govering bodies of basic level obtain responsibilities in accordance with their human, financial and infrastructural potential and resources on a new territorial basis.

 

Main responsibilities/functions of local self-governing bodies of basic level concern provision of:

• local economic development (attracting the investments, developing the entrepreneurship);
• local infrastructure development, in particular, roads, water-, heating-, gas- and electric- supply and sanitation, information networks, social and cultural institutions;
• planning the territorial community development;
• construction issues on community territory (land allocation, permissions for construction, commissioning of the buildings);
• landscaping;
• housing and communal services provision (centralized water and heating supply, sanitation, waste transportation and utilization, facilities and premises maintenance, communal property maintenance – buildings’ areas);
• passengers’ transportation on community territory;
• maintenance and exploitation of streets and roads in settlements;
• public protection;
• fires extinguishing;
• management of secondary, pre-school and out-of-school institutions;
• provision of ambulance services, primary health care, prevention of diseases;
• cultural and physical cultural development (maintenance and organization of operation of cultural centers, clubs, libraries, stadiums, sport ground);
• provision of social assistance through territorial centers;
• provision of administrative services through relevant centers.

Structural units of central executive territorial bodies will provide following services at a basic level:

• sanitary and epidemiological protection;
• population social protection (paying the pensions, subsidies, compensations, provision of benefits);
• treasury services;
• civil registration.

Main responsibilities of local self-governing bodies at rayon level are related to:  

• brining up and traing the children in boarding schools of general profile;
• provision of secondary health care level.

Main responsibilities of local self-governing bodies at oblast level are related to:  

• regional development;
• environmental protection;
• development of oblast infrastructure, in particular, oblast roads, network of inter-rayon and inter-oblast public transport routes;
• professional and technical education;
• provision of highly specialized medical care;
• development of culture, sport and tourism.

State transfers responsibilities to local self-gocerning bodies, which operate at the level of administrative and territorial structure, where possible and appropriate and taking into account human, financial and infrastructural capacity and resources needed to implement responsibilities/functions at that level. 

For optimal differentiation of responsibilities between local self-governing and executive power bodies at different levels of administrative and territorial structure, it is necessary to ensure the following:

• improving of the system of public involvement into decision-making processes and control over their implementation;
• identifying of the appropriate tax basis, which shall permit local self-governing bodies to fulfil their functions taking into account objective criteria of financing the functions/responsibilities delegated by state;
• establishing, at every administrative and territorial level, of local self-government representative bodies with their own executive bodies;
• effective state control over compliance with demands/requirements of Constitution and Laws of Ukraine by local self-governing bodies.

Identifying of justified territorial grounds for local self-governing and executive bodies’ operation aimed at ensuring affordable and qualitative public services provided by these bodies

Formation of the criteria for the administrative and territorial units of different levels of administrative-territorial structure of the state shall be based on following:

• administrative and territorial structure consists of three levels, i.e.:

o    basic (administrative and territorial units – communities);

o    rayon (administrative and territorial units – rayons);

o    regional (administrative and territorial units – Autonomic Republic of Crimea,     Oblasts, cities of Kyiv and Sevastopol).

• territory of administrative and territorial unit is inseparable;
• no any other administrative and territorial units of the same level can exist within administrative and territorial unit;
• territory of administrative and territorial unit of a basic level is determined by the availability of basic public services provided in the community (arrival time for emergency medical care in urgent cases and fire support can not exceed 30 minutes).

At every administrative and territorial level, relevant local self-governing and executive bodies are functioning, i.e.:

• at basic level – village, municipal councils and their executive bodies and representatives of some executive power bodies;
• at rayon level – rayon councils their executive bodies, rayon state administrations, territorial bodies of central executive power bodies;
• at regional level – Council of Ministers of Autonomic Republic of Crimea, Oblasts Councils their executive bodies, Oblasts State Administrations, Kyiv and Sevastopol municipal councils, Kyiv and Sevastopol municipal state administrations, territorial bodies of central executive power bodies.

Establishment of appropriate material, financial and organizational conditions for implementation by local self-governing bodies their own and delegated responsibilities

Establishment of appropriate material, financial and organizational conditions for implementation by local self-governing bodies their own and delegated responsibilities are ensured in compliance with following principles:

• existing resources necessary for provision of, identified by Law, responsibilities by local self-governing bodies;
• calculation of the amount of equalization dotations on the basis of uniform standards of public services provision;
• provision of direct transfers from state budget to every local budget;
• determination of local self-governments’ responsibilities related to the territory of relevant administrative and territorial unit as a financial basis for taxes and fees;
• fixing, at the level of local budgets, a share of funds received from tax of newly established legal persons, within five years from the date of investing into legal person;
• provision of the local self-governing bodies with the right to regulate the rates of local taxes and fees;
• prevention of other local self-governing and executive power bodies from tax benefits that reduce local budgets own revenues. Benefits from local taxes and fees may only be imposed by local self-governing body, the budget of which is credited for such taxes anf fees;
• provision of local self-governing bodies with the access to credit resources for investment development by simplifying the procedures of approval and local guarantees as well as their balancing with state control aimed at prevention of bankruptcy of communal property objects;
• increase of transperancy and effectiveness of state budget funds due to implementation of program and target method for all local budgets;
• determination of the material base of local self-government, including land, owned by territorial communities of villages, towns/cities (communal property), objects of common territorial communities’  property of villages, towns/cities, rayons, oblasts as well as appropriate tax base;
• provision of territorial communities with the right to dispose land resources within their territories, pool their assets and resources within the framework of territorial communities cooperation to implement joint programs and more efficient provision of public services to adjacent territorial communities’ population;
• maximum pupolation involvement into decision-making processes related to local issues/challenges and promotion of direct democracy and its forms;
• introduction of effective mechanisms related to public involvement into development of important managerial decisions by local self-governing bodies, including issues on territorial community development strategy, approvement of territorial communities statutes/regulations, bridge-construction documents (general plans of towns/cities, villages development, etc.);
• provision, according to Law and territorial community Statute, of citizens’ general meeting with the right to initiate extraordinary reporting of local government officials to territorial community as well as establishing the obligation for local governments and their officials to justify their decision on taking into account of the neglecting the decisions of general meeting;
• establishment, under local self-governing bodies, of consulting and advisory bodies to consult the population, conduct public expertise of both decisions’ drafts and decisions of local self-governing bodies;
• provision of territorial communities with the right for local referendum;
• improvement of the procedure related to the creation of population self-organization bodies, granting them certain responsibilities of local self-governments, as well as providing funds for these responsibilities, the right to spend them and report on spendings;
• widespread the creation of population self-organization bodies, in particular, within territorial communities, which include the inhabitants of more than one settlement;
• introduction of the mechanism of control, by local state administrations, over local self-governing bodies’ decisions compliance with the Constitution and Laws of Ukraine and public services quality;
• deprivation of the right of local councils to express distrust to heads of relevant local administrations.

 

Stages of Concept implementation

The Concept shall be implemented in two stages.

Objectives and activities for preparatory stage (2014) are as following:

• firstly, to make amendments to the Constitution of Ukraine related to creation of executive bodies of oblast and rayon councils and differentiation of responsibilities between them;
• to develop the drafts and adopt legislative acts on implementation of direct democracy mechanism, improvement of legal regulation of procedures related to general citizens’ meeting at the places of their residence and establishing additional guarantees for population self-organization bodies; to create favorable environmet for wide population’s involvement into making decisions by local self-governing bodies;
• to create a legal base for the right of territorial communities to voluntary associations, providing state support to associated communities within five years after association establishment to improve infrastructure for services provision and transport accessibility;
• to create legal base for the right of territorial communities to cooperate on the grounds of resource and organizational cooperation and obtaining state support to implement joint projects;
• to regulate legislatively new system of administrative and territorial structure;
• to carry out simulations of administrative units in the regions and to draft regulations necessary for the completion of a new system of administrative-territorial structure;
• to determine MINREGION as main central body of executive power on reforming the local self-government and territorial organization of power and elaborate, on the level of the Cabinet of Ministers of Ukraine, coordination mechanism for this reform;
• to conduct extensive informational campaign on local government reform and territorial organization of power;
• to finalize the legal framework for the activities of local self-governments and executive power bodies on new territorial basis and to identify their responsibilities and resources in accordance with Concept’s requirements.

Objectives and activities for second stage (2015 – 2017) are as following:

• to unify and standardize public services provided to the public by local self-governing and executive power bodies with regard to the principles of maximum affordability for consumers and determine by law the conditions for their proper funding;
• to conduct institutional reorganization of local self-governning  and executive power bodies on the new territorial basis;
• to hold local elections on the basis of the reformed system of local self-government;
• to improve the system of communities territories’ planning, to provide the newly formed communities with  territories’ planning schemes andgeneral plans.

Expected results

Concept’s implementation shall serve for:

• strengthening the legal, institutional and financial capacity of territorial communities, local self-governments, implementation of their activities in compliance with the principles and provisions of European Charter on local self-governance;
• public services availability and improvement of their quality;
• implementation of mechanism of control, by local administrations and the public, over public services provided by local self-governing bodies and territorial bodies of central executive power;
• implementation of standards (norms) of public services’ quality provided to the public by local self-governing bodies of  basic and regional level as well as criteria for quality evaluation;
• creation of favorable legal environment for the widest possible public involvement in decision-making and the development of direct democracy forms;
• formation of an effective territorial system of local self-governing and executive power bodies to ensure sustainable socio-economic development of the respective administrative and territorial units;
• formation of associated territorial communities, capable, on their own or through local self-governments, to address issues of local importance;
• socio-economic development of territorial communities and regions;
• stimulation of territories’ economic development as a result of improvement of mechanisms of influence of local self-governments on setting priorities for local economic development;
• defining of clear boundaries of each administrative and territorial unit, ensuring universality of jurisdiction of local self-governing bodies in the respective administrative-territorial unit and prevention of the presence of other administrative and territorial units of the same level within the community’s territory;
• formation of executive bodies of regional and rayon councils;
• changing of the statutes of local state administrations from  general jurisdiction bodies to control and steering bodies within executive power system with the function of coordinating the activities of local offices of central executive power on a respective territory;
• responsibilities’ division between local self-governing bodies of basic and regional level, local state administrations and territorial offices of centralexecutive power.

Financial resources

Concept’s implementation is financed from state and local budgets within the allocations provided in the yearly budgets of relevant territorial communities, as well as through international technical and financial assistance.