Systems of local governance and how citizens participate: international review

Annex C: Case Studies

Denmark

Denmark is a constitutional monarchy, a unitary state and a parliamentary democracy. The Danish parliament (the Folketing) has 179 MPs from 12 different parties, and elections are every four years as set out in the constitutional act.

The Kingdom of Denmark has two autonomous regions: the Faroe Islands and Greenland, each with its own legislative assembly, flag and official language. Greenland's autonomy was established in 1979, and extended in 2009. The autonomy of the Faroe Islands was established in 1948. The following profile does not include these two autonomous regions.

Historical development

Denmark was originally ruled by an absolutist monarch (1660-1849). In the 1830s the Danish King established a local government system. In urban areas about 80 market towns were given responsibility for local functions; in rural areas, there was a two tier structure of parishes and county councils. This was to some degree locally democratic as all had elected decision-making bodies. But central control was still strong to implement national policies, and key posts were also appointed by the King or undertaken by central government officials: the market town mayor, parish pastor and the county governor.

The constitutional act of 1849 ended absolutist rule and established Denmark as a democracy. The basic features of the Danish governance system remained unchanged until major reforms in 1970.

Key reforms in governance

The major reforms in Denmark occurred in 1970 and 2007. The reforms in 1970 are described as a complete overhaul of the local government system, and by international standards they are considered to be radical in three primary ways.^[13] First, there were significant amalgamations: 1000 parish municipalities and 80 market towns were amalgamated into 275 new municipalities and 25 counties were merged into 14. These changes removed the distinction between rural and urban local government and created a uniform national system of two-tier local government, each tier responsible for specific functions. The only exception was Copenhagen which retained both county and municipal responsibilities. Secondly, the new larger local government institutions were given additional responsibilities and increased autonomy over the areas of welfare they already covered. Thirdly, in financial reforms specific budgets allocated by national government were merged into a single block grant. Alongside local income tax, this was the main source of income for local government.

The 2007 reform was primarily based on the principle of subsidiarity: giving responsibility for functions and public services to the authority as close as possible to the citizens, and reflecting the nature, budgetary, and professional demands of the different responsibilities. This involved creating a new governance landscape and recalibrating how functions were shared within new boundaries. Another principle of the reform was that overlapping of responsibilities should be avoided.

The focus of the reforms were described by interviewees as on creating 'professional sustainability' – securing the administrative capacity of municipalities to meet their delivery responsibilities – and achieving economies of scale. Interviewees suggested that the reforms were more technocratic than democratic in character: focused on improving the effectiveness and efficiency of municipalities.

As a result of amalgamations, five regions were created from the counties, and 98 municipalities. The average population size of a municipality increased from 20,000 to 55,000, with much less variation in size between municipalities. The regions lost tax-raising powers and specific functions which were passed either to central government or to municipalities. Healthcare was the most significant function retained at regional level. The result was a much more standardised system of two levels of local governance, with municipalities responsible for the same functions.

Structure and function of local governance

As a result of the 2007 reforms there is a broadly standardised form of two tier local government in Denmark: regions and municipalities. The governance of municipalities includes an elected council and a mayor. The councillors elect a mayor from among their number. Heads of council standing committees are also elected proportionately by councillors. The mayor is the formal head of the administration. The executive is the administration and the council committees.

Municipalities are responsible for basic welfare services: child care, primary education, elderly care; administering welfare benefits: housing benefit, social security, pensions; public utilities: water supply, refuse collection, local roads; culture and recreation: libraries, theatres, sports facilities. Since the 2007 reform, municipalities also took responsibility from the regions for: specialised social services; healthcare prevention; environmental protection; and regional roads. The most important welfare functions are administered at the municipal level and amount to about two thirds of all public expenditure. The Danish welfare state – at least in delivery – is subnational.

The size and importance of Danish local government leads to quite a lot of scrutiny from national government. Interviewees identified this as common in areas of public service that are highly politicised or expensive. In those areas, national politicians look to assert more control over municipalities. As one interview illustrated:

Their [municipalities'] autonomy differs a lot between policy areas, and if they're heavily politicised areas, they get so detailed, the rules and regulations are so detailed there is not much discretion at the municipal level. In other areas they have a lot of discretion. DN2

In general, Danish local government appears to have quite a large degree of autonomy, in terms of discretion over decision-making, the broad span of responsibility, the size and capacity of its workforce, and financial empowerment. Looked at more closely, the degree of discretion at municipal level varies considerably across a number of dimensions.

Financial arrangements in local governance

Municipalities derive their income from local taxes, central government grants and service fees. The largest source of income is local taxation: primarily from local income tax, but also property and business taxes. Together this is nearly three fifths of total income. About a quarter of income comes from government grants (block grant and matching grant) and a little under a fifth from fees levied for utilities and social services.

There is an annual negotiation between association of local government and central government to reach agreement about grant funding, local expenditure and taxation levels. This is regarded as part of the central government's macro-economic controls, recognising local government's responsibility for a large share of public expenditure. Borrowing is generally forbidden.

A reform introduced in 2012/13 sought to ensure that the aggregated level of local taxation should remain the same. This means municipalities can only raise their rates of taxation if another municipality lowers their rates equally. As one commentary on Denmark notes, 'this fact is a telling illustration of the fine balance between local autonomy and central control and interference'.^[14]

Citizen participation

Interviewees described a long tradition of active citizenship in Denmark, but distinguished between the common participation of Danes in voluntary sports and civic organisations, and the less common involvement directly in political and public service decision-making. The following extracts from interviews illustrate this:

Danes are in general terms quite happy and quite satisfied with the service that they get from municipalities. DN3

For a typical Dane you don't really see the point in getting involved because you are waiting for the public sector themselves to find out what you need…we don't have this urge to be involved all the time in the decision-making process. DN2

Citizens tend to participate through local voluntary, civic, sports and cultural organisations but not directly in what would be considered 'political' activities. Issues of local community concern tend to be raised with the municipality through these civic routes. Interviewees mentioned some examples of national interest organisations, e.g. elderly care, which have local chapters, and young people involved in the Red Cross.

A range of methods have been used for participation, but there has not been a growth in interest or use of any particular method, as one interviewee reflected:

Municipalities have tried to engage the citizens more… not one single idea has really caught on and has been copied and really is the thing in Denmark at the moment. DN3

User boards have been established at municipal level to give service users a voice. This is mandatory for some public services such as schools and child care organisations, but optional in others such as libraries and elderly care. Their influence has tended to be limited and so interest in involvement has not grown.

Local referenda have not been a major factor in local government. Advisory referenda can be used by municipalities, but rarely are, although they were used prior to the 2007 municipal amalgamations. Since 2018 there is a provision for legally binding referenda, which has not yet been used, and citizens are not able to initiate them.

An interesting case-study of co-governance at a municipal level has been evaluated.^[15] The arrangement has been described as an example of 'hybrid democracy', combining representative democracy with deliberative and participatory democracy. The city council of a municipality near Copenhagen established council 'task committees' with five politicians and ten citizens as members. The citizens are selected by the councillors according to descriptions of the competencies needed to fulfil the role, and proportionate to each political parties representation on the council. Each committee is asked to discuss and develop proposals to solve specific policy problems identified by the council.

The evaluation reports positive findings on the views of politicians and citizens involved in the committees. Citizen and politician members were quickly able to develop a common level of knowledge about the issues the committee was considering. The work of the committees was deliberative, allowing for shared discussion and debate. There was a reasonable sense of the final proposals being co-produced and co-owned by councillors and citizens. This remains a largely isolated example of such a collaborative form of governance between politicians and citizens locally; it has not been taken up more widely across Denmark.

Selected bibliography

Blom‐Hansen, J. and Heeager, A. (2011). 'Denmark: Between Local Democracy and Implementing Agency of the Welfare State' in Hendriks F., Lidström, A., and Loughlin, J. The Oxford Handbook of Local and Regional Democracy in Europe. Oxford: Oxford University Press.

Sorensen, E and Torfing, J, 2019, Towards a robust hybrid democracy in Scandinavian municipalities, Scandinavian Political Studies, 42(1), pp25-49

The Congress of Local and Regional Authorities of the Council of Europe, (2013). 'Local and Regional Democracy in Denmark', report of a monitoring visit of the European Charter of Local Self-Government. Council of Europe.

England

England has the largest population of the four nations that make up the United Kingdom (UK). The United Kingdom is a constitutional monarchy and a parliamentary democracy. The United Kingdom has an uncodified constitution, meaning that there is no overarching formal document setting out the powers and limitations of its government. It is, instead, outlined in various laws, as well as rooted in political precedent and parliamentary procedure.

The Parliament of England was the legislature of the Kingdom of England, which existed from the early 14th century until 1707. At this point it united with the Parliament of Scotland to become the Parliament of Great Britain, after the political union of England and Scotland created the Kingdom of Great Britain. There is no specific English parliament currently; decisions that apply to England alone are made in the UK Parliament. There are 650 elected members of the UK Parliament, 533 representing the constituencies of England.

Historical development

These constitutional arrangements emerged in response to Parliament grappling for power with the Crown during the seventeenth century. The power of the executive was further strengthened with the introduction of democratic politics and the extension of the franchise in the nineteenth century. It is challenging to point to a specific moment in English history which can be recognised as defining for its local governance, or to clearly demarcate one period of its evolution from another. In the absence of a conscious plan to establish and develop this institution, local governance in England has been shaped by incremental change made necessary through changing political landscapes and context.

According to two academic writers on local government systems in Europe, Peter John and Colin Copus, the story of English local government during the twentieth and twenty-first century is one of steady decline, punctured by temporary periods of radical policy shifts designed to revitalise local democracy. They conclude that local government in England remains weak and centrally controlled in nature.

According to John and Copus, there are two defining themes that run through the history of the English system which have had important implications for the evolution of its local government. The first, they suggest, is centralisation while the other is the bounded nature of local autonomy in England. They argue that the importance of ideas of individual liberty, consent, and equality before the law have been very influential in shaping English government institutions. They contend that its emphasis on limited government, in particular, has given rise to ideas of localism and led to the adoption of legislation that created provisions for local self-government in England which reflected local diversity.

The UK, nonetheless, retains a strong central government, underpinned by the doctrine of parliamentary sovereignty. The centre is therefore able, at least in theory, to amend the structure and functions of local government with a simple majority vote in Parliament. As a result, one interviewee commented that power is "handed over temporarily" and that "the ability to act completely autonomously doesn't really exist" in the English case.

Key reforms in governance

Municipal Corporations Act of 1835; Local Government Acts 1888 and 1894

The Municipal Corporations Act of 1835 was, in many ways, the product of an uncodified local government system. It democratised the closed medieval system of government, and established municipal boroughs across England, governed by elected councils. The Act also enabled the emergence of city-based local government. There was no attempt to introduce uniform arrangements; it merely made it possible for citizens to petition Parliament to create a local council within a specific locality. As a result, only 178 out of the existing 278 administrative units were reformed into municipal boroughs.

The Local Government Act 1888 signalled a recognition of a need for fundamental reform of the previous piecemeal system. It was the first systematic attempt to impose a standardised system of local government in England. The Act established county councils as well as newly created areas for those councils, to be known as administrative counties. There were 59 'county boroughs' created to administer the urban centres of England. Each administrative county and county borough was governed by an elected county or borough council, providing services specifically for its own area. The Act also created a new County of London from the urban areas of London, which was a full statutory county by itself.

The Local Government Act 1894 created a second tier of local government by dividing all administrative counties into either rural or urban districts, allowing more localised administration. The county boroughs were not divided in this way. The municipal boroughs reformed after 1835 were brought into this system as special cases of urban districts. The Act also established civil parishes, separated from ecclesiastical parishes, to carry on some of their responsibilities, others being transferred to the district or county councils. Civil parishes were not a complete third tier of local government, since they were established only for smaller rural settlements, while the older urban parish councils were absorbed into the new urban districts.

The Local Government Act 1972

The Local Government Act of 1972 led to the most uniform and simplified system of local government in England so far. The aim of the Act was to establish a uniform two-tier system across the country. It effectively built a new governance system by abolishing all previous administrative districts, with the exceptions of Greater London and the Isles of Scilly. New counties were created and six new metropolitan counties, modelled on Greater London, to address the problems of administering large conurbations. Each of the new counties had a county council to provide certain county-wide services such as policing, social services and public transport.

The second tier of governance varied between the metropolitan and non-metropolitan counties. The metropolitan counties were divided into boroughs, the non-metropolitan counties into districts. The metropolitan boroughs had greater powers than the districts, sharing some of the county council responsibilities with the metropolitan county councils, and having control of others that districts did not (e.g. education was administered by the non-metropolitan county councils, but by the metropolitan borough councils).

The act also maintained civil parishes in rural areas, but abolished them in large urban areas. Conversely, the Act provided for the creation of parishes across the whole country at some point in the future. Since 1974, several urban areas have applied for and received parish councils. Much of the country remains unparished, since the parish councils are not a necessary part of local government, but exist to give civic identity to smaller settlements.

The new system of local government came into force on 1 April 1974, but in the event the uniformity proved to be short lived.

Local Government Act 2000

The Local Government Act 2000 attempted to streamline and modernise political structures in English local government by introducing a new cabinet system. Alongside a cabinet of between two and 10 councillors, local authorities could introduce a mayoral office, accountable to the electorate, or a council leader, elected by the council. These changes offered English citizens a figurehead around which they could mobilise to affect change in their communities. It also increased political capacity to make a difference to local circumstances and decision-making. As observed by one interviewee, "One of the key dynamics around the mayor is… pulling in more power and money."

The Act also provided a new 'power of
well‐being' for the best parish councils to improve the development and coordination of support for citizens, community groups, and local authorities, which was subsequently replaced by the powers of general competence introduced by the Localism Act 2011.

Localism Act 2011^[16]

The Localism Act 2011 makes a number of provisions intended to increase community engagement, which councils must administer. It also introduced powers of general competence and enabled local councils in England to do "anything that individuals generally may do". Previously, local government could only act within explicit parameters set by Parliament. The Act did not correct the fundamental imbalance of power between the centre and the local level. As observed by one interviewee, a certain nervousness exists amongst local authorities that even if a local authority did establish general competence in a particular place, "The national level could take it away or just override it."

Structures of local governance

As England doesn't have its own parliament or assembly, elected councillors lack formal powers to influence the national governance system. The interviewees describe a very top-down system in England but stop short of calling existing institutional arrangements ineffective, stressing the agency of elected leaders and organised civil society. Both highlight the flexibility of the English system as simultaneously a strength and limitation, with important consequences to citizen participation.

Local governance structures in England grew organically in response to addressing local sets of circumstances in a different places. As a result, they are characterised by various complexities and form "a messy kind of system", as one interviewee puts it. This asymmetry can be considered a strength of the English system, according to one interviewee, as it constitutes a "toolbox" which can offer "a whole load of different solutions". However, these different layers can also cause confusion amongst citizens. As illustrated by a second interviewee, in some cases an area can have: "a parish, a district, a county council. It might be in a regional mayoral area and some of those districts might be members of combined authorities." This can make it difficult to know what governance institution is responsible for what.

In much of England, there are two primary levels – county and district – with responsibility for services split between the two. These are often described in legislation and guidance as 'principal authorities'. County councils cover an entire county area and provide the majority of the services. Within a county, there are several district councils which cover a smaller area and provide more local services. London, other metropolitan areas and some parts of 'shire' England operate under a single-tier council structure. There are five possible types of local authority in England. These are:

1. County councils – cover the whole county and provide 80 per cent of services in these areas, including children's services and adult social care.

2. District councils – cover a smaller area within a county, providing more local services (such as housing, local planning, waste and leisure but not children's services or adult social care); can be called district, borough or city council.

3. Unitary authorities – just one level of local government responsible for all local services, can be called a council, a city council or borough council.

4. London boroughs – each of the
32 boroughs is a unitary authority.

5. Metropolitan districts – effectively unitary authorities, the name being a relic from past organisational arrangements. They can be called metropolitan borough or city councils.

There are a total of 343 councils in England:

• Metropolitan districts (36)
• London boroughs (32) plus the City of London
• Unitary authorities (55) plus the Isles of Scilly
• County councils (26)
• District councils (192)^[17]

Combined authorities

Since the establishment of Greater Manchester in 2011, groups of councils have formed combined authorities in some areas of England. These combined authorities receive additional powers and funding from central government following bespoke "deals" with the government. These authorities are particularly important for transport and economic policy across the regions in which they are based. There are currently nine combined authorities in England, seven of which are led by directly elected mayors: Cambridgeshire and Peterborough, Greater Manchester, Liverpool City Region, Sheffield City Region, Tees Valley, West Midlands, West of England, West Yorkshire.^[18]

Parish and town councils

Parish and town councils are the level of local governance closest to the electorate in England. Collectively, they are often referred to as 'local councils'. Parish councils may call themselves 'town', or 'community', 'neighbourhood', or 'village' councils. This is known as the 'style' of a council and has no effect on its status or legal powers. The Local Government Act 1972 provides the legal foundation for the existence of today's parish and town councils and still governs much of their operation.

There are some 10,000 parish councils in England. Parish councils cover only some 30% of the population of England: historically they have not existed in urban areas. It is not unusual for elections to parish councils to be uncontested, and for members to be co-opted where the number of candidates is fewer than the number of seats available. No part of England is obliged to have a parish council.

Functional responsibilities

The powers and responsibilities of local government in England are not permanently defined in a codified constitution and are therefore flexible. Academic commentary and the interviewees describe the system as heavily centralised. Some have argued that local governance is primarily used to administer and deliver the policies of central government.

Service delivery

Local government in England is a key deliverer of public services – councils need to provide statutory services including education, social services, public housing, local roads and environmental services. One interviewee commented that national standards are adopted in Westminster to deliver on manifesto commitments, and a standardised approach to service delivery is then applied across England. According to them, this "has major limitations in terms of creativity".

Commentators observe that local authorities are organised by specialisms and decisions taking is largely the product of bureaucratic arrangements at the unitary authority, county and district levels. In contrast, one interviewee argued that parishes – which constitute the lowest tier of local government – are better able to adopt a place-based approach and circumvent some of the silos that the larger units of governance fall into. As an example, they point to several parishes in Cornwall which have successfully expanded their remit and adopted non-statutory services. This has been possible, in large part, as a result of the fact that parishes are not subject to the same tax-raising restrictions as the higher tiers of local government.

However, it is important to note these examples take place in a context where the county or unitary authority were unable to continue funding services such as parks, libraries and public toilets. Parish councils' ability to increase their capacity and be innovative appears to therefore be predicated on the inability of higher tiers of local government to function as intended.

Parish and town councils' powers are generally equivalent to those of district councils. In practice, most lack the capacity to undertake the provision of public services, and concern themselves with local environmental, community and amenity issues. Some larger town councils have substantial staff teams and may run a number of local facilities. The only power that is available only to parish councils and not to other tiers of government is the power to obtain and supply land for allotments if local demand cannot be met.

Parish councils may use the General Power of Competence provided in Part 1 of the Localism Act 2011. A parish council wishing to use the power must formally resolve that it is an 'eligible council'. The qualifications for eligibility are that the clerk has completed a course in local administration, and that at least two thirds of councillors have been elected (i.e. not co-opted).

Financial arrangements in local governance

The majority of local authority budget comes from a central government grant but local authorities in England also have a range of regulatory functions. The most significant is the power to raise revenue through council tax, which is capped by central government.^[19] The simultaneous central control of local government expenditure and the constraint set on increasing council tax levels significantly limits the fiscal freedom of local authorities, according to academic commentary. There is some capacity to adjust business rates and car park charges, but these revenues are not significant in comparison.

Parish and town councils have a single source of revenue; they may raise a 'precept' on the council tax bills produced by their local billing authority (the unitary authority or district council). They also have some borrowing powers, which in any case must be agreed by central government. Parishes are the only level of local government able to raise revenue and precept without restriction. Council tax-payers cannot refuse to pay it, and the billing authority cannot refuse to levy it. In practice, councils will tend to consult residents before increasing the precept. In 2018-19, data on parish precepts showed that a total of £518 million was collected via the parish precept, which is £33 million higher than in 2017-18. This was 1.8% of total collected council tax; 8,839 parish councils raised a precept. This applies to a minority of the population in England, as there is no equivalent structure to the parish council in urban areas.

An interviewee shared that, in some cases, parish council "budgets have gone from
a few hundred thousand pounds a year to over a million." Under the right circumstances, therefore, parishes have the potential to significantly increase their influence and spending power, where there
is impetus to do so.

Citizen participation

According to one interviewee, there hasn't been much recent democratic innovation around citizen participation in England because the "dominant dynamic" has been one "around austerity and also around removal" of responsibilities from the control of local authorities. As a result, the discussion has been focused on managing such losses rather than invigorating democratic participation, as local government "simply don't have the time or the capacity".

Where innovation is taking place, it is mostly at the parish level, as previously discussed. One interviewee gave the example of Frome, where the parish is proactively going out into the community and to get people involved in local decision-making, tapping into local ideas about what the most pressing problems of the community are and potential solutions for resolving them. Below are listed several other mechanisms through which citizens are able to participate in local decision-making in England.

Voting in council and mayoral elections

Some academic commentators argue that citizen participation in English local government has been relegated to a largely passive role, due to the system's ingrained bureaucracy, the top-down nature of service delivery, and reduced participation in local politics.

For one interviewee, the creation of new mayoral offices has established a mechanism for local people to participate in decision-making. By lobbying, they argue, citizens can now influence how local budgets are spent and where the limited capacity of civil servants is dedicated in their area. The interviewee highlighted as an example how Londoners successfully organised in 2008 to put pressure on then mayor Ken Livingstone to support the living wage. However, there are no legal frameworks to hold mayors accountable to civic society, aside from at elections. This opportunity is limited to those areas with mayors, and to the functions/services for which mayors have responsibility.

Participation through forums

Forums for housing tenants, such as Tenant Participation Compacts and Housing Cooperatives, have given people some opportunity to influence decision-making in their locality. Other examples include statutory consultation by Primary Care Trusts and health panels, foundation hospitals which include citizens on their panel, as well as Crime and Disorder Partnerships which have crafted a role for citizen participation.

Neighbourhood Plans

Neighbourhood Plans offer communities in England the chance to collectively agree strategic long term plans concerning the built and spatial environment of their community. The overwhelming majority relate to planning and development, but some also have a social component. Local referenda must be held to approve the neighbourhood plan which can bolster local democratic participation. One interviewee described neighbourhood plans as "powerful… living documents." However, it must be noted that the plans are entirely voluntary.

Funding decisions/participatory budgeting

Participatory budgeting offers a mechanism through which local people can make decisions on the spending priorities of a defined public budget. In England, this democratic process is voluntary and, according to one interviewee, "at the low end and very patchy". This tends to be characterised by small sums of money, allocated to individual councillors to spend. They argue this has resulted in "distributing gifts in local areas" rather than a mechanism which generates genuine public participation and innovation in allocating mainstream budgets.

Asset transfer

Asset transfer is intended to increase opportunities for communities to take on the management and ownership of local assets and facilities such as under‐used community centers or empty schools. However, according to an interviewee, few communities in England actually own land as they often get priced out. The same person also indicated that the assets owned by most communities are not usually revenue raising. Finally, they pointed out there is a lack of certainty about the longevity and security around these assets, as government can take back these assets in the future, which has left some local people disillusioned.

Community Right to Bid

Community Right to Bid allows community groups, voluntary organisations, social enterprises and council employees the right to bid to take over the running of a service from the council, following a procurement process. Community Right to Bid allows for assets that have a perceived value to the community to be purchased by the community.

Deliberative approaches

In the last few years there have been increasing examples of local areas starting to experiment with the use of deliberative approaches such as citizens' juries and assemblies to inform decision-making. This is not yet evidence of a systematic and sustained change in citizen participation in local governance. 

Germany

Germany is a large federal parliamentary democracy with a complicated and varied system of governance. How this system looks now reflects to a significant degree the history of its development, in particular: how Germany formed as a state in the 19th century, the structures created at the end of the second world war, and then the reunification of East and West Germany in 1990.

The federation consists of 16 states called Länder. At the Federal level, parliament consists of two chambers: the directly elected Federal parliament (the Bundestag) and the Federal Council (the Bundesrat). The Bundesrat represents the 16 Länder; its members are not directly elected but are delegates from each Land government.

The 16 Länder comprise three 'city states' (Berlin, Bremen and Hamburg), and 13 'area states'. Each Land is largely the equivalent of central government in unitary states and has a directly elected parliament (the Landtag). There is no second chamber (i.e. equivalent to the Bundesrat) representing the interests of local government.

There is a federal constitution, the 1949 Basic Law. This signifies a legalistic conception of the German state – emphasising homogeneity of the law across Länder. The constitution creates the 'ground-rules' which every Land must follow. The division of powers is set out in the constitution; Länder are responsible for everything not explicitly assigned to the federal government in the constitution. The federation exerts wide-ranging powers in areas of inter-state matters such as defence and currency. Each Land has its own constitution, within the framework of the Basic Law, and is responsible for implementing its own laws and also those of the federal government. This differs from other federal systems where there are dual structures of state and federal government that operate in tandem at the federal level (e.g. Canada).

Traditionally, German local governance consists of two levels: districts as the upper and municipalities as the lower layer. Most municipalities lie within districts except larger towns and cities which exercise the responsibilities and powers of both levels. Local government does not constitute a self-standing (third) part of the federal structure, but is instead a formal part of each Land. For local government, the basic principle is that it is responsible in the territory it covers for everything that has not been explicitly assigned to Federal or Land levels by the federal constitution or Land laws.

Historical development

The federal system in Germany reflects its historical origins in the 19th century emerging from many self-governing cities and small principalities. Governments and parliaments emerged at the Land level; they governed their own affairs and formed a loose federation together. The beginning of a German state is marked by the establishment of the German Reich in 1871 under Otto von Bismarck. Parliamentary democracy was established in 1918 with the Weimar Republic.

At the end of the Second World War, the eastern part of what was the Reich was taken over by Poland and the Soviet Union, leading to 10 million refugees coming into the new federal republic. The remaining territory of Germany was divided into four zones occupied by each of the wartime allies: France, UK, US and the Soviet Union. Disagreement about unifying these zones led to the partition into West and East Germany, and the division of Berlin. The Federal Republic of Germany was established in 1949 covering the territory of the occupied zones of the three western allies, governed by the federal constitution.

Key reforms in governance

The two major changes to governance in Germany occurred after the Second World War, and on the unification of Germany in 1990. In 1949, ten Länder were created, each reflecting the political will of the allies and reflecting some of the historical and cultural character of government in those three countries. Only a few Länder retained their pre-war old territory and thus a historical sense of identity (e.g. Bavaria and Hamburg). But below that level, the structures and local identities of councils and districts stemming back to the 19th century remained largely unchanged into the 1960s: 24,000 municipalities (average 2,000 population) and 425 districts (average 60,000 population)

In the mid-to-late 1960s, the Länder of the Federal Republic each began broadly similar reforms to reduce the number of municipalities and increase their size. On average, it took about eight years to establish these new structures, reflecting the political controversy the reforms aroused. This was largely a process of imposed amalgamations, strongly opposed by municipalities. The result was large reductions in the numbers of municipalities in most Länder. The northern states were more aggressive in amalgamating while the southern states were more cautious.

On unification in 1990, the five Länder of the former East Germany joined the Federal Republic; and East and West Berlin came together to form the third city-state. The municipalities and districts of these eastern Länder were much smaller than their West German counterparts. In 1993/94, local government was reformed: four Länder created 'joint authorities' providing administrative support to groups of municipalities. The fifth Land pursued amalgamation, creating larger unitary municipalities alongside joint authorities. In all five Länder, districts were amalgamated: a reduction by between a half and two thirds. As a result the average population size for the districts was 110,000–130,000, still smaller than districts in former West Germany (which averaged 170,000).

Unification also heralded other changes, across all the Länder: the establishment of directly elected Mayors, acting as head of the council as well as of the local executive; and provisions for legally binding referenda at Land and municipal levels. These developments are described in more detail below.

Structure and function of local governance

Each Land has its own constitution and largely autonomous internal political structure. The municipal charters as well as the territorial boundaries of local governments are set by each Land. The Federation has no say in these matters.

The position of local government in the German system is set out in Article 28 of the federal constitution. This describes the scope of autonomy of local government and a presumption of local responsibilities: specifically, a guarantee of self-government and financial autonomy and the right to regulate 'all matters of the local community in their own responsibility within the frame of the existing (federal and Länder) legislation'. This has been described as a 'general competence' clause; and is one which historically dates back to the early 19th century.

Article 28 has not been taken as protecting the territorial boundaries of individual municipalities (or districts), against Land-led amalgamations. Municipalities are protected against a Land legislating in ways that violate due process in the Land's dealing with the municipalities. Any municipality may file a complaint to Land or Federal constitutional courts violated in its rights under Article 28. Municipalities found limitations in the use of this provision in the fight against the imposed municipal amalgamations that took place in the 1970s.

Structures of local governance

There is two tier local government in every Land, except in the three city-states, where the functions of municipalities and districts are combined. There are municipalities (11,054 in total) and districts (401) but a very large variation in the size of municipalities both across and within Länder. For example 21% of all municipalities are located in one Land, Rheinland-Pfalz, which has 5% of the population in Germany; whereas Nordrhein-Westfalen has 3.5% of all municipalities and 22% of the total population.

This leads to a 'mixed economy' for the delivery of local government functions/services. Where municipalities and districts are smaller, a range of other arrangements are in place to take responsibility for certain functions that cannot effectively be delivered. As a result, some functions that are held at municipality level in some places are at district level in other places. Some issues, such as the environment, may be the responsibility of the Land. Inter-municipal cooperation is also a common arrangement to deliver services in smaller municipalities; in ten of the Länder there are municipal confederations.

Amalgamation is out, nobody talks about amalgamation in Germany. But for reasons of effectiveness these questions of inter-municipal cooperation in certain areas [are still discussed]. GR4

These arrangements can also vary across services within a single municipality: a municipality cooperating with some neighbouring municipalities for some services, and with other neighbours for other services. Outsourcing services is also another option, sometimes to private organisations and more often to civic or voluntary organisations, e.g. the Red Cross.

In contrast to this very varied picture of territorial structures and institutions across Germany, the establishment of directly elected mayors, with executive powers, has emerged throughout Germany. Since the 1990s, all German Länder except the city-states introduced this type of mayor, following the example of two Länder. The mayor acts as the head of the local administration and assumes their own functions as well as competencies delegated to him/her by the Land. One of the interviewees reflected on the emerging consensus in Germany around this model of mayoral leadership:

There is quite a consensus about the strong mayor model, with a directly elected mayor, with a functional strength of the mayor acting as the local executive. I think there is quite a consensus that this model is stronger than the previous one. GR3

In one Land alone, the model is different. The council is elected by the citizens and the council then elects members of a 'magistrate', who may not be council members. Citizens also directly elect the mayor who is automatically a member of the magistrate. The mayor chairs the magistrate, but the magistrate decides via majority vote. So it may be that, for example, a conservative mayor is surrounded by progressive magistrates mirroring the progressive majority in the council.

Financial arrangements in local governance

The majority of income for local government is not generated locally. The two largest sources of income are from Land grants of various kinds (about a 1/3), and from taxes (about 1/3). But most of this tax income is not raised locally. Local government can raise some local taxes: business tax is the most significant but is regulated at the federal level. Other local taxes include a dog and entertainment tax, but these contribute minimally to the total income. Some other income comes from charges and fees for public services, but this is again a small part of the whole.

Income tax and VAT is collected by the federal government and then distributed to Land and local government according to a scheme. Local government gets a percentage of the income tax collected in its territory. So this creates a competition for higher-income citizens who will contribute more to that tax share. There is a fiscal equalisation scheme to try and re-balance this inbuilt inequality but interviewees felt this was only partially successful: "Poorer cities getting poorer and richer cities getting richer" (GR2). This variable financial position can impact on municipalities' ability to deliver public services, as an interviewee illustrated:

One city has high unemployment, has wrecked streets, large potholes, no swimming facilities, no good childcare, no good local transport and so on and then the neighbouring municipality is just the opposite. GR2

Decisions to introduce new taxes, and who gets that income, is set at federal and Land levels. Local government can only raise taxes that have been agreed at higher levels of governance, but does have some discretion over the rates at which that tax is collected.

Interviewees described competition between municipalities over business tax rates, and the risk of a 'race to the bottom' in order to attract business. An example given by an interviewee was that the Frankfurt Stock Exchange was based not in Frankfurt but in a neighbouring municipality because the tax rate was lower.

Each Land constitution recognises the financial independence of local government. There is the principle in each constitution of 'concomitant' financing – if powers are delegated then adequate resources must follow to carry them out. But interviewees identified that notwithstanding these protections, this was still a source of disagreement between Länder and local government. One example cited was new obligations for the provision of kindergartens passed down to municipalities, but without the level of funding they felt it required. As an interviewee reflected:

If you talk to local politicians, they will always say the upper levels of government they are pouring tasks down on us…. there is always a debate about who's doing what and who's going to pay for what. GR2

A number of the interviewees highlighted debt as an issue for some municipalities.

Local democracy and politics

Elections to municipal councils and counties are by proportional representation. This means that coalitions and consensus-building are the norm. Political parties operating at Land and federal levels are active locally. However, the pattern of local politics is different to that seen at higher levels in a number of specific ways: local representatives tend not simply to follow national party lines but act pragmatically in coalitions across parties; also, smaller parties tend to be more successful at the municipal level which means there are more fragmented groupings in councils. In most Länder, there are independent groups of 'free voters' which tend to gain a significant representation in local councils. And independent candidates can also be successful, particularly in mayoral elections.

There is no electoral threshold in most states which means it is easy to win a seat in the council with proportional representation if the number of total seats is high. One interviewee gave the example of Frankfurt which has 93 council seats. This means in practice that approximately 0.5% of the vote is enough to win a council seat. This is the reason for the sometimes large fragmentation in the council. Currently Frankfurt has 15 groups in the council with the number of seats held by groups ranging from 22 to one seat, with seven groups each holding a single seat each.

Socio economic position and challenges

Interviewees described significant variations in population and economic development in Germany. In the last 20 years, the German population overall increased by five million to 82.8 million in 2017,^[20] but actually reduced in six of the sixteen Länder. In broad terms, depopulation is focused on rural areas and the eastern Länder, resulting in smaller, older populations. This creates social and economic problems in those areas, strikingly described by one interviewee, "some of the politicians say they are bleeding out" (GR2).

By contrast, the population growth in urban areas, particularly in cities, creates challenges around the necessary infrastructure to support the population rise. An interviewee highlighted large housing problem in major cities as a result of this "inner German migration" (GR2).

The large number of refugees taken in by Germany in the last few years was described as the most significant social challenge currently. As one interviewee described it:

This is a challenge, I would say, for integration policies and at the local level this means education, it means language courses social welfare, schools. So I think this is really the challenge of the next decade to integrate the millions of people who have arrived in Germany. GR3.

Despite these specific challenges, there was a sense from interviewees overall that Germany was performing comparatively well in relation to inequality. The following interview extract illustrates this:

I would say that inclusion and decreasing or limiting inequalities is working better than other countries. GR3.

Citizen participation

Germany is a site of significant use of direct democracy mechanisms for citizen participation at the local level, through legally binding referenda and citizen initiated referenda. These have been used most at the municipal level, and less frequently by Länder. The federal constitution makes provision for a national referendum in two specific cases: any proposed change to the number and size of Länder; or if the constitution is replaced by an entirely new one. This has never occurred. Other changes made in the Basic Law do not trigger a referendum.

Referenda at municipal level were first introduced in one particular Land in the 1950s. This was followed by all the other Länder which introduced referenda over a period of a few years in the mid-1990s, as part of a 'wave' of democratic developments that followed the re-unification of Germany. All referenda follow a common format: there is a two-stage process, begun by raising a petition to hold a referendum on a specific topic; if enough people support the petition then a referendum will be held. There is a threshold for a referendum to pass, generally a qualified majority and based on a minimum rate of participation by citizens. The thresholds for petitions and for referenda vary a bit between Länder. The results of any referendum are legally binding on the municipality.

Interviewees described examples where municipalities had sought to introduce new measures that were subsequently denied through a referendum, for example the privatisation of certain local public services being prevented, with Bavaria as a specific example. The influence of referenda was described not solely in their specific use but also in the impact they have on local politics, as one interviewee described:

I think it [a referendum] is quite a strong instrument in the hands of the citizens. And the impact is also an anticipatory one…the council is aware of the risk of a referendum and anticipates the possible citizens' view and so council members are behaving more collaboratively towards citizens. GR3

Some municipalities were also applying lower thresholds for citizen petitions to initiate referenda and lower thresholds required for a referendum to pass.

Interviewees also described a range of other participation activity. Some of this participation activity is a legal requirement on government, and some is discretionary. In general, an interviewee highlighted this as a change: "I think there is a strong change towards more participatory democracy at the local level." GR2

Formal requirements for citizen participation are set out legally at federal or Land level. For example, major infrastructure developments like a new airport have very specific requirements. And some Land municipal charters require certain kinds of citizen participation. For example, an interviewee described the arrangement in one Land that requires local mayors to hold an annual public meeting with all of the local community, described as a 'consultation hour'.

At the municipal level, discretionary participation activity is more common. Examples of this described by interviewees included the use of deliberative methods such as citizen assemblies, citizen panels to contribute to thinking on specific projects or initiatives, and participatory budgeting (PB). PB in Germany tends to be used as an advisory mechanism, mostly for gathering information on citizens' views on how public budgets should be allocated. More routinely, user panels exist as a forum for 'service users' to give their views in, for example, transport or child care.

An important difference between referenda and these other forms of participation is that the outcome from the latter is not legally binding on local authorities. So despite the broad range of ways in which citizens are able to participate, in practice the final decisions taken may not reflect citizens' views. This is particularly the case where local authorities are not bound to act in response to the view expressed by citizens through that participation. As one interviewee reflected, this can lead to citizen disenchantment with participatory opportunities:

These consultations and formats of non-binding participation [have] sometimes been a bit frustrating and disappointing from the citizen point of view. GR3.

Selected bibliography

Benz, A. and Zimmer, C. (2011). 'Germany: Varieties of Democracy in a Federal System' in Hendriks F., Lidström, A. and Loughlin, J. The Oxford Handbook of Local and Regional Democracy in Europe. Oxford: Oxford University Press.

The Congress of Local and Regional Authorities of the Council of Europe, (2012). 'Local and Regional Democracy in Germany, report of a monitoring visit of the European Charter of Local Self-Government, Council of Europe.

Hlepas, N-K., Kersting, N., Kuhlmann, S., Swianiewicz, P. and Teles, F. (eds.), (2018). Sub-Municipal Governance in Europe: Decentralization Beyond the Municipal Tier. Palgrave Macmillan. 

New Zealand

New Zealand is a constitutional monarchy with the United Kingdom's monarch as the head of state. It is a unitary state and a parliamentary democracy. It has a single chamber of government, the House of Representatives, with 120 MPs. The electoral system is a mixed member proportional system, with directly elected constituency MPs and additional list MPs, determined by party vote share. The recent election of 2020 led to the Labour party taking majority control of the parliament, the first time since 1996 that there has not been a coalition government.

There are two tiers of local government: regional councils and what are called 'territorial authorities' which comprise (largely rural) district and city councils. The overall position and role of local government is set out in the Local Government Act 2002, with some amendment in later legislation. This has been described as providing a general power of competence. Notable also is that it sets out a purpose of local government to promote 'community well-being'. This was to encompass what became known as the 'four well beings' – economic, social, cultural and environmental.

Historical development

The colonisation of New Zealand is a significant part of its history. The first settlers were ancestors of the Maori, these were probably Polynesians in the late 13th century. The first Europeans to arrive in New Zealand were Dutch, in 1642, influencing the country name – originally Nieuw Zeeland. The next European influence was the arrival of British and French in the 1800s. A British Governor was established and in 1840 the Treaty of Waitangi was signed with Maori chiefs across the country, establishing New Zealand as a British colony.

In 1852 legislation established representative government for New Zealand. Six (eventually 10) provinces were created, with elected superintendents and councils. At the national level, a General Assembly was established: a Legislative Council appointed by the Crown and a House of Representatives elected every five years. In 1854 the first parliament met.

In 1876 the provinces were abolished, leaving central government as the single legislative authority. Hundreds of local bodies soon came into being.

New Zealand became an independent 'dominion' in 1907, and its independent status as part of the Commonwealth was established in incremental changes over the next forty years.

Key reforms in governance

The key reform of local government occurred in 1989. This was a significant rationalisation and amalgamation of the complex and fragmented local governance landscape which had remained significantly unchanged for almost a century.

Legislation created regional areas with their own council and within the regions a second tier of 'territorial authorities': called city or district councils. Existing councils were required to amalgamate into larger units, without reference to polls of electors, which had been a barrier to reorganisation in the past. The number of territorial authorities was reduced from 205, and over 400 'special purpose' boards were abolished.

In 2010, the government created Auckland Council, combining eight existing authorities into a unitary council. Auckland is the largest metropolitan area in New Zealand with more than a third of the country's population and more than a third of its economy.

Structure and function of local governance

The Local Government Act 2002 states that the purpose of local government is: to enable democratic local decision-making and action by, and on behalf of, communities; and to promote the social, economic, environmental and cultural well-being of communities, in the present and for the future (s.10, LGA 2002).

There are two tiers of local government: regional councils and what are called 'territorial authorities' which comprise (largely rural) district and city councils.

Across the two tiers there are 78 councils:

• 11 regional councils
• 61 territorial authorities (50 district councils and 11 city councils)
• 6 unitary councils

Regional councils are primarily responsible for environmental resource management, flood control, air and water quality, pest control, and, in specific cases, public transport, regional parks and bulk water supply.

Territorial authorities are responsible for a wide range of local services, including roads, water reticulation, sewerage and refuse collection, libraries, parks, recreation services, community and economic development, and town planning. Notably, local government does not have any significant role in the delivery of social welfare services, which is the responsibility of central government.

Local councils are led by directly elected mayors. The mayor in the New Zealand system is described as a 'weak' form of mayor due to the lack of executive responsibility and the inability to veto council decisions. Mayoral powers are for the most part symbolic. Regional and territorial councillors and mayors are elected in local government elections every three years.

There are distinct governance arrangements in place for health: 20 District Health Boards (DHB). DHBs are responsible for providing or funding the provision of health services in their district. They also have social care responsibilities, specifically the funding of residential care services for older people. Each DHB is governed by a board of up to 11 members which sets its strategic direction and monitors its performance. The Minister of Health appoints up to four members to each board, and the board's chair and deputy chair, and seven members are publicly elected every three years, at the time of local government elections.

Financial arrangements in local governance

Local government is a relatively small part of the public service landscape, responsible for just over ten per cent of public expenditure, equivalent to under 4% of GDP.

Unlike the other countries studied, councils are not reliant on central government block grants. Instead, they raise most of their own funding, the majority of it (about 60%) through a property tax. Councils have a wide range of choices in how they apply that tax. There are two other primary sources of income which are sales of goods and services, and fines and fees. There is a further small contribution from grants and subsidies, primarily the share of road taxes and charges.

Councils' self-reliance in terms of their income is a source of some autonomy, as one interviewee reflected:

[They] have a reasonable amount, a high level of discretion in terms of how it's spent. So government is more hands-off than many. And because it's not actually funding local government, the councils enjoy more autonomy as a result. NZ1.

On the other hand, of course they're constantly giving councils either new duties or new responsibilities or increasing the level of quality that these services need to be delivered to. NZ1.

Citizen participation

Councils are required to adopt a Significance and Engagement Policy that sets out how they will engage with their communities according to the significance of matters under consideration. There are also statutory requirements to consult as part of their planning and decision-making responsibilities.

One of the formal institutions for citizen participation in local governance are Community and Local Boards. The Boards were established following the reform of local government in 1989 and are found in approximately 40 city and district councils. So far Local Boards, which have more responsibilities than Community Boards, are only found in Auckland, having been established as part of the creation of Auckland Council in 2010. Each board must have at least four members, a maximum of twelve, of which at least four should be elected members. Boards may include appointed members.

A Community Board can only exercise powers that are delegated to it by the local authority. There are some powers that councils cannot delegate to a community board, such as the power to buy, sell or lease property, or hire and fire staff.

In 2017, there were 110 Community Boards in New Zealand, down from 144 boards a decade ago in 2008.^[21] Research published in 2018 indicates that the boards take a largely advisory and advocacy role, with the significance of their influence on councils diminished. From a Scottish perspective, this position appears to have similarities with community councils.

There have been institutions of co-governance set up between councils and Maori in specific areas of significant Maori interest in land and natural resource assets. These have stemmed from the historic loss by Maori of land or title to rivers and waters following the colonisation of New Zealand. One of the interviewees described the form of co-governance as:

…a co-governance body to manage a natural resource. Which may be a river or it may be a national park. And that co-body would have Maori representatives on it, it would have the relevant local government representatives on it and it would have a central government representative. NZ2.

Quebec

Introduction

Quebec is one of the 13 provinces and territories of Canada. It is the largest Canadian province by area and has the second highest population (8.5 million people) after the province of Ontario. More than half of the population of Quebec live in the two largest cities, Montreal and Quebec City.

Quebec is governed by a National Assembly of 125 elected members, each of whom represents a constituency of the province. The party with the largest number of elected members forms the Provincial Government, with executive powers vested in the Premier (the leader of the winning party) and their cabinet. Since Canada is a monarchy, Elizabeth II is Queen of Canada and her functions in Quebec are exercised by the Lieutenant Governor of Quebec. For much of its recent history, Quebec has been in a secessionist dialogue with the Canadian federal government.

Historical development

French roots in Quebec go back to the 16th century, when King Francis 1 of France claimed the land, which was called New France. Quebec City was founded as a French trading post in 1608. The province was the subject of ongoing military conflict between France and England/Britain through the 17th and 18th centuries and was finally ceded to Great Britain in the Treaty of Paris in 1763.

The Quebec Act of 1774 provided the people of Quebec with a charter of rights, and allowed for the maintenance of French civil law, the French language, and freedom of religious practice. The Act offended a range of interest groups in other parts of British North America, and set the stage for long-term grievance between the populations of French and British origin in what would become Canada.

The passing of the British North America Acts in 1867 provided for the formation of a self-governing confederation of the colonies of British North America (Canada – which became Quebec and Ontario, New Brunswick, Nova Scotia, PEI, and Newfoundland). Other colonies and territories joined the confederation over a period of several decades. The passing of the Statute of Westminster in the UK parliament in 1931 recognized Canada as co-equal with the UK. The Constitution Act of 1982 was the final step in securing Canada's full independence from the UK.

Key reforms in governance

Quebec's political history has until recently been dominated by ongoing debate, deliberation and referenda over whether Quebec should become an independent nation. This has had a direct bearing on decisions about decentralisation of power from the Government of Canada to its constituent provinces.

The Parti Québécois was elected to form the provincial government in 1976 on the platform of a 'sovereignty-association' referendum, by which Quebec would have independence in most government functions but share some others, such as a common currency, with Canada. The 1980 Quebec Referendum put this question to voters who rejected the proposals by 60 percent to 40 percent. Following the referendum, Pierre Trudeau, then Prime Minister of Canada, patriated the Canadian Constitution from the UK, and tried unsuccessfully to get the Quebec leadership to approve the constitution.

Since 1980 the Government of Canada has led various attempts to get Quebec to ratify the constitution, through promoting Federal-wide decentralization proposals that would recognize Quebec's status as a 'distinct society' within Canada. Attempts to date have been unsuccessful, in part because other provinces – as well as aboriginal and other interest groups – have opposed the creation of special status for Quebec. Quebec does have various quasi-constitutional charters in place including the 1975 Charter of Human Rights and Freedoms (Charte des droits et libertés de la personne) and Charter of the French Language. These are subservient to the Canadian constitution, but unique to Quebec.

In the 2018 provincial elections a non-traditional party the Coalition Avenir Québec (CAQ) won a landslide victory, beating the Parti Québécois into third place. CAQ is a centre-right nationalist party which supports only increased autonomy for Québec. The CAQ aims to deliver this by requesting the devolution of further powers from the federal level, including greater power over immigration and taxation. Conversely, while the Canadian government has expressed opposition to a new Bill which regulates the wearing of religious symbols by public servants, Quebec has chosen to use the Canadian Charter of Rights and Freedoms to enforce the new law.

There is an interaction between decisions about the decentralisation of powers to provincial level, and the subsequent ability of the Quebec government to reform sub-provincial structures. Perhaps reflecting this, since the 1960s there has been increasing focus on the reform of sub-provincial and local governance structures, in line with the ongoing redefinition of federal/provincial relations (Hamel and Rousseau, 2003).

The roots of Quebec's sub-provincial/local governance reach back to the mid-19th century, when a series of Acts gave official status to municipal governance structures of different types across Quebec's territories. More recent processes of local governance reform in Quebec have been ongoing since the 1960s, when the incoming Liberal government began a series of reforms aiming to transform the existing municipal structures, municipalités. Municipalities were seen as outdated and inefficient, too many in number, and unable to respond to the needs of Quebec's increasingly urban population.

The 1960 Liberal government sought to reduce the number of municipalités, to promote urban agglomeration, and to promote regional development within the province. This was a centralised, top-down managerial vision of reform which aimed to integrate and modernise municipal structures, and create larger and more autonomous institutions. Implementation of change was slow, with the creation of Regional County Municipalities eventually approved in 1979. Subsequent years were characterised by the emergence of resistance to the top-down managerial planning approach from local and regional actors seeking to democratise local political spaces.

By the late 1990s, a new set of municipal reforms were in development, within the context of the retreat of centralised planning approaches in favour of decentralisation of services to private and third sector actors. In 2000 the government published a White Paper promoting amalgamation of municipalities to drive greater cooperation and efficiency, and particularly to create large urban-suburban agglomerations with greater powers in order to create globally competitive city regions. This resulted in a series of forced mergers of 212 municipalities in urban areas, with the creation of a new layer of metropolitan government (the Communauté métropolitaine), and of local borough councils.

These reforms faced considerable opposition in the affected areas. In 2004, following a change of government, some of the merged municipalities were able to hold referenda to retrospectively approve or reject the mergers. This resulted in the 2006 demerger of some municipalities from the new city areas, most extensively in Montréal. However, the creation of a new overarching urban governance structure, the agglomération, meant that even demerged municipalities did not regain full autonomy from the merged city structures.

Current structures of local governance

Today, Quebec has three levels of local governance.

1. Administrative regions

Quebec is divided into 17 administrative regions which serve primarily to organise the provision of provincial government services, most significantly the allocation of regional economic development funding.

2. Regional county municipalities

Beneath the level of administrative region, there are 86 regional county municipalities (municipalités régionales de comté, MRC), 2 metropolitan communities and one regional administration. The regional and urban structures bring together several local municipalities which are considered to share common interests.

MRCs deal with issues requiring coordination between neighbouring local municipalities such as waste management and public transportation. They have responsibility for a number of issues of local interest, including territorial planning, realty assessment for property taxes, waste management, emergency planning, local economic development and employment assistance as well as local financing of the local development centre or CLD (centre local de développement). Most municipalities belong to an MRC. However, some municipalities, mostly urban, northern or Aboriginal, do not.

The powers of the MRC are exercised by the MRC council (conseil de MRC). This is composed of the mayors of each of the member municipalities and possibly other elected municipal officials as well as a warden (préfet). Depending on the MRC, a warden can either be appointed by the council or elected by universal suffrage.

The two metropolitan communities of Quebec and Montreal have responsibility for areas of common interest to their constituent municipalities such as urban planning, economic development, promotion of international trade, artistic and cultural development, public transportation and waste management.

In addition, the Kativik Regional Government or KRG (Administration régionale Kativik), serves a primarily Inuit population. In addition to the usual functions of MRCs, the KRG exercises powers devolved to the Inuit of Quebec in recognition of their right to self-government. These include jurisdiction over police, transportation, communications and labour.

3. Municipalities

There are 1130 local municipalities of different types in Quebec. These cover most although not all of Quebec's territory. Municipalities range widely in size, with 711 having fewer than 2000 inhabitants, and 10 with more than 100,000. The majority (over 1000) have fewer than 10,000 inhabitants.^[22]

Since 2006, some urban municipalities have been clustered into 11 urban 'agglomerations' (agglomérations). This arrangement was put in place following the secession of some of the urban merged municipalities. It results in some shared responsibilities between central cities and their surrounding metropolitan/suburban areas. One municipality in each agglomeration is known as the central municipality and has special status. Agglomeration powers are exercised by an agglomeration council, formed of elected members from each of the constituent municipalities, with the number of councillors representing each municipality determined by its relative size. The central municipality may exercise veto powers over the council's decisions. The competencies of the conseils d'agglomération relate to services and areas of collective interest across the agglomeration, including police and emergency services; social security; social housing; aspects of utility and environmental management; ports, industrial zones, and airports of importance.^[23] The municipal councils which make up the agglomeration have a range of local decision-making and management powers, for example in relation to local planning, utilities, waste management, amenities and leisure, markets etc.

Some larger urban municipalities are divided into boroughs (arrondissements). Some municipal functions are delegated to borough councils (conseils d'arrondissement) where it is deemed desirable for these functions to be administered more locally. The powers of the borough council vary from municipality to municipality and even from borough to borough within a single municipality and are often guaranteed by provincial statute. Typically, a borough council might have powers relating to town planning; public consultations; fire prevention; waste management; support for local development organisations; parks, sports, cultural and leisure facilities; local roads; and issuing local permits. With some exceptions, a borough council cannot borrow, impose taxes or take legal action.

Election to the municipal councils are held every four years, with local residents electing a fixed number of councillors (a minimum of six, with the number dependent on the population size of the municipality) and a mayor. The mayor is directly elected by the voters, and has powers which are distinct to those of the rest of the council. The mayoral responsibilities include chairing the council, monitoring the operation of municipal services, and ensuring revenue collection. They have the right to participate in other democratic bodies such as the MRC. The mayor has a right of veto over council decisions although this can be reversed by a second majority vote.

The relationship between the role and powers of the municipalities and those of the regions and provincial government continues to be the subject of negotiation. The Union of Quebec Municipalities (UMQ) represents municipalities of all sizes and represents municipal interests in negotiations and advocacy with the Quebec government.^[24] In 2012 the UMQ published a white paper which proposed a Municipal Charter involving a redefinition of the relations between Quebec provincial government and the municipalities.^[25] The Charter requested the Quebec government to recognize the municipality "as an autonomous political authority and grant it the jurisdiction, powers, resources and autonomy necessary to meet the local needs of its population." This reflects a move among municipalities to demand more powers and new fiscal models.^[26]

Financial arrangements in local governance

The provincial government of Quebec takes the majority of its revenue through a progressive income tax, a 10% sales tax and various other taxes (such as carbon, corporate and capital gains taxes), equalization payments from the federal government, transfer payments from other provinces and direct payments. By some measures Quebec is the highest taxed province; a 2012 study indicated that "Quebec companies pay 26 per cent more in taxes than the Canadian average".^[27]

The revenues of Quebec municipalities come mainly from three internal sources: property taxation; specific taxes; and pricing of services. Property tax accounts for 70% of municipal revenue in Quebec, compared with closer to 40% in the rest of Canada. Government transfers to municipalities in 2008 were about 12% of the total revenues of local municipalities in the province.^[28]

In December 2019, the Government of Quebec signed a new partnership agreement with municipalities, the Partenariat 2020-2024. This is intended to significantly increase fiscal transfers to municipalities over the next five years. The partnership puts in place a new fiscal transfer equivalent to the value of a one-point growth in the Quebec sales tax, as well as creating a new fund the Regional and Rural Fund. The new funding arrangements represent an increase of 111% compared with spending under the previous 2016-2019 partnership.^[29]

The new funding agreement is an acknowledgement that the continued reliance on property taxes is unsustainable for municipalities, especially as their responsibilities have increased. The growth in online business over physical shops has also had an impact on municipal tax revenues. The new funding arrangements are intended to share the benefits of economic growth more fairly with municipalities. The increased funding to rural areas and regions is recognition of the continued economic dominance of urban areas and the need to do more to support development and innovation in other parts of Quebec.

Local democracy and politics

Within the wider Canadian context, Quebec is notable for the presence of a large number of registered municipal political parties which are not officially vertically linked or integrated with provincial parties. In 2013, 180 such local parties were authorized by the Chief Electoral Officer of Quebec. Whilst these had traditionally been viewed as electoral campaigning vehicles which lend organisational and financial support to candidates, evidence suggests that in some cases, these parties have become institutionalised over the course of several elections, in urban areas in particular, and that they are contributing to an increasing politicisation of municipalities; the development of 'government' and 'opposition' dynamics within municipal councils; and the emergence of a cadre of mayorships and councillor posts which benefit from strong organisational and financial backing.^[30]

Between 2009 and 2011, the Charbonneau Commission investigated incidences of corruption amongst municipal officials in relation to election funding and municipal contracts, which resulted in criminal charges and resignations. As a result of these revelations and the subsequent decrease in public confidence in municipal politics, in 2011 the Government of Quebec passed the Municipal Ethics and Good Conduct Act, requiring that municipal councils adopt a code of ethics and elected officials be trained in ethics and professional conduct.

Despite this, pressure for the transference of more powers to municipalities has continued to increase. Following the UMQ White Paper and Municipal Charter, a new law was passed in 2017 (Loi 122) to transfer more powers and autonomy to municipalities, recognising explicitly that they are local governments (gouvernements de proximité).

The law increases the powers of local municipalities in town planning and development, and allows a municipality to adopt a policy of public participation – as opposed to public referendareferenda – in matters of town planning. The law increases powers in relation to the promotion of affordable housing, and creates stronger obligation on the Quebec government to consult municipalities in relation to planning guidance.

Controversially, the law relaxes certain financial and procurement management and approval requirements on municipalities, something which several political parties opposed as increasing the risk of corruption – particularly in the light of the 2011 Charbonneau Commission findings. However, the government argued that the emphasis on increasing transparency around decision-making will offset this. It is not clear to what extent the change of government in 2018 might affect the speed and extent of implementation of the changes set out in the law.

Socio-economic position and challenges

In its 2019 financial report, the Government of Quebec reported that Quebec is one of the most indebted provinces in Canada, with a net debt burden of 39.7% of GDP in March 2019, compared with the average across all Canadian provinces of 30.3%.

However, the same report notes that Quebec is currently experiencing strong economic growth, with real GDP growth in 2019 adjusted to 2.4% from the 1.8% forecast of the March 2019 budget, outstripping Canada-wide growth levels. This also has led to the Government's own-source revenue being $1 billion higher in 2018-19 than had been forecast.^[31]

Citizen participation

Citizen participation has a long history in local politics in some areas of Quebec. In Quebec City in the 1970s, opposition to a large scale urban development project resulted in increasing moves towards democratisation and citizen involvement in municipal decision-making. This in turn led to the piloting of neighbourhood councils (conseils de quartier), elected bodies of citizen representatives which could represent citizen views in relation to projects and services affecting the local area. In 1996, the City of Quebec asked the provincial government to amend the City's charter to include the obligation to adopt a public participation policy and to create neighbourhood councils throughout the territory. Bherer (2010) describes how during the subsequent processes of merger and demerger in the urban municipalities, the creation of neighbourhood councils was contested by some city actors who felt that referenda were a more democratic tool for decision-making. The subsequent struggle for political space at the local level with the newly-created borough councils also served to undermine the role of the neighbourhood councils in the eyes of some.

Increasing citizen participation and engagement in local government is one of the key principles underpinning the 2017 Loi 122. The Act gives municipalities broader powers over urban planning, and makes it possible for municipalities to adopt a policy on public participation in urban planning. The Act defines requirements for any participation policy as follows:

… ensuring that (1) the decision-making process is transparent; (2) citizens are consulted before decisions are made; (3) the information disseminated is complete, coherent and adapted to the circumstances; (4) citizens are given a real opportunity to influence the process; 9 (5) elected municipal officers are actively present in the consultation process; (6) deadlines are adapted to the circumstances and allow citizens sufficient time to assimilate the information; (7) procedures are put in place to allow all points of view to be expressed and foster reconciliation of the various interests; (8) rules are adapted according to, in particular, the purpose of the amendment, the participation of citizens or the nature of the comments made; and (9) a reporting mechanism is put in place at the end of the process.^[32]

Municipalities and regions in Quebec have been developing their own participation policies in response to the Act. As an example, the participation policy for Quebec City, based on two years of consultation and development, was published in February 2020 and is now in public consultation. The foundations of the new policy integrate several key elements of Loi 122, emphasising transparency in decision-making; consultation prior to decision-making; provision of complete and comprehensible information to support participation; genuine ability for citizens to influence decisions; and appropriate timelines for participation.^[33] The new policy envisages a greater role for Neighbourhood Councils as a primary interlocutor with citizens. The city has also launched a new platform for digital participation: https://participationcitoyenne.ville.quebec.qc.ca

Selected bibliography

Bherer, Laurence (2010), 'Can public participation be a sustainable reform?' Paper presented for the American Political Science Association, September 2-5, 2010.

Mévellec, Anne (2014), 'Did the 2013 municipal elections destabilize municipal politics in Quebec?' Canadian Journal of Urban Research, Volume 23, Issue 2, pages 18-37.

Mévellec, Anne and Manon Tremblay (2013), 'Les partis politiques municipiaux: La 'westminsterisation' des villes du Québec?', Recherches sociographiques, LIV, 2, 2013 : 325-347

Montigny, Eric (2016), 'La fin des oui et des non au Québec? Un clivage en déclin', Actualité Fédérale 7(1). http://ideefederale.ca/documents/Janvier_2016_fr.pdf

Scotland

Scotland is one of the four nations that make up the United Kingdom (UK). The original parliament of Scotland was created in the early 13th century and was the national legislature of a then independent nation. In 1603, the English crown passed to James VI, King of Scotland. The two nations then had the same monarch – an arrangement known as union of the crowns. The Union with England Act 1707 established parliamentary union between Scotland and England. Scotland retained autonomy over several key areas – its distinct legal system remained intact and its Church stayed independent from the Church of England.

In a referendum in 1997, a majority of voters agreed there should be a Scottish parliament with tax-varying powers. The Scotland Act 1998 established a single-chamber Scottish parliament that could pass primary and secondary legislation. The devolution settlement dictates that any powers not set out in legislation as the responsibility of the UK Parliament (reserved matters), are de facto considered to be the responsibility of the Scottish Parliament (devolved matters). The Scottish Variable Rate enabled the parliament to increase or decrease the basic rate of income tax by up to three pence in the pound.^[34] However, the overwhelming majority of the Scottish Executive's budget was to be funded through a 'block grant'^[35] from the UK Government.

A referendum on Scottish independence was held in 2014 but rejected by voters.^[36] New financial and social security powers were subsequently devolved from the UK to the Scottish parliament in the Scotland Act 2016. The Scottish Government estimates that its budget may vary by up to six percent by 2022/23,^[37] which would be a significant change from the level of variation through the UK Government's block grant.

There are 129 Members of Scottish Parliament (MSPs); 73 constituency MSPs, elected through First Past the Post^[38] and 56 additional members selected from regional party lists under proportional representation. Ordinary elections for the Scottish parliament were due every four years, however legislation has subsequently amended this to be every five years.^[39]

Historical development of local governance

In the 12th century, Scotland was split into counties, parishes and burghs. Counties evolved from sheriffdoms and stewartries, while parishes were used as a way of dividing the country into small regions, each with their own local church and clergy. Burghs were towns that enjoyed a certain level of autonomy and special privileges over the regulation of trade and industry. From the 17th until the mid-19th century, local government in Scotland was characterised by the regime of church and gentry (in parishes and counties) and by oligarchy in the burghs. Social, economic, political and religious transformation in Scotland all impacted the evolution of local government in the 18th and 19th centuries.

Between 1889 and 1975, Scotland was made up of 37 county councils (with some minor reforms taking place during this period). This included four 'counties of cities' covering the nation's largest cities: Aberdeen, Dundee, Edinburgh and Glasgow. The other 33 counties were made up of 21 large burghs (an area with a population of 20,000 or more), 176 small burghs and 196 landward districts. Large burghs were largely independent of county councils, with the exception of major services such as police and education. Counties of cities united the powers of the burgh and the county council. Small burghs provided services such as street cleaning, housing, lighting and drainage. The landward districts had more limited powers such as maintaining public pathways and parks.

Key reforms in local governance

During the 1960s, a general consensus emerged for reform of the structure of local governance. The Royal Commission on Local Government in Scotland (the 'Wheatley Commission') put forward a proposal for a two-tier structure in 1969. This was introduced in the Local Government (Scotland) Act 1973 and came into effect in 1975. The Act abolished all former burghs (their powers were passed on to district councils) and divided Scotland into eight large regional councils, 53 smaller district councils and three unitary councils for the Island Areas. The top tier of eleven regional councils^[40] had responsibility for functions such as education, health, social care and roads. Each regional council contained several district councils within it, each district council being responsible for functions such as planning, housing and leisure.

The Local Government etc. (Scotland) Act 1994 introduced the current structure of local government in Scotland, which has been in place since 1996. The new 32 unitary local authorities combined the functions of the old regional and district councils but covered smaller geographical areas.

Most recently, the Public Bodies (Joint Working) (Scotland) Act 2014 established Integrated Joint Boards for Health and Social Care delivery, which came into force in 2016. NHS and council care services came together under a partnership agreement for each local authority. They are jointly accountable for the health and care needs of local residents who access these services.

Structure and function of local governance

Since 1996, local government in Scotland is organised into 32 local authorities which represent a geographical area and are accountable to voters in their area. The three island local authorities – Orkney, Shetland and Na h Eileanan Siar (Western Isles) – retain the form set in place in 1975. Each local authority is made up of multiple wards.

Local authorities in Scotland differ significantly in size and population^[41] but all are commonly responsible for the delivery of a specific range of public services in their area. This includes education, social care, waste management, road maintenance, parking related issues, public transport, council housing and the provision of business licenses or permits. The powers of local authorities are legally binding and can be split into three categories. Mandatory duties that local authorities are obliged to fulfil (such as schooling for 5-16 year olds); permissive powers which aren't required but are allowable (such as economic development); and regulatory powers to monitor business operations (such as licensing of taxis).

The Local Government (Scotland) Act 1973 established many of the processes and responsibilities that are still in place in local government. Two prime examples are the statutory power to borrow money and the delegation of decision-making powers to (sub-) committees. The Act placed a duty on local authorities to introduce Community Council schemes in their localities and gave them statutory oversight over these community bodies. The legislation also made provisions for local authorities to tailor schemes to local circumstances, in consultation with Community Councils.

Recent policy and legislative changes around improving outcomes, community empowerment, regional economy and wider national policies require local authorities to strive towards achieving local priorities and improving outcomes for their communities. The Local Government in Scotland Act 2003, for example, introduced a requirement for Scottish councils to work in partnership with local bodies to provide services, within the framework of community planning. The act also imposed an obligation on councils to pursue 'best value' and promote wellbeing.

Financial arrangements in local governance

The Scottish government provisionally sets the budget for local authorities over a three-year period to help them plan for the longer-term. In practice, in recent years the government has set single-year budgets. On average, councils receive around 56% of their funding through the government's General Revenue Grant,^[42] around 22% from Non-Domestic Rates income^[43] and the other 22% from Council Tax.^[44] These proportions vary significantly between local authorities. Councils can apply for additional support through the discretionary Bellwin Scheme in cases of large-scale emergency. Scottish Government and other public bodies also provide capital grants to support local authorities' capital expenditure.

Each local authority sets the rate of their council tax and decides how the raised money is used to support and deliver local services. A cap of 3 per cent set by the government applies to changing council tax rates in a financial year. In 2017 the Scottish Government lifted a ten year freeze on council tax increases. In 2018/19 all councils in Scotland increased their council tax to the maximum allowed amount, with many simultaneously increasing fees and charges to raise income. In 2019/20 Scottish Government increased the cap to 4.8 percent in cash terms, or 3 percent in real terms. Twelve councils increased their council tax to the maximum, thirteen increased by 3 percent, and the other seven increased their council tax between 3.9 to 4.5 percent.

Non-domestic rates, also called business rates, are taxes paid on non-domestic properties. Scottish Government are responsible for the policy and legislative framework and set the tax rates, but individual councils administer and collect the tax. The rates are based on the rateable value of a property, determined independently. The amount paid is calculated by multiplying the property's rateable value by a pence in the pound tax rate known as the poundage.

In 1999, the McIntosh Commission recommended an independent review of local government funding, and called attention to worries over the power of general competence for councils, ring-fencing and financial disempowerment of local authorities. A Concordat was signed in 2007 by Convention of Scottish Local Authorities (COSLA) and Scottish Government, which removed many formerly ring-fenced grants. The agreement introduced no structural changes in local government but it gave councils more control over their budgets and how they manage their services.

Recently, additional means for local revenue raising have been taken forward. The Transport (Scotland) Act 2019 made provision for an optional Workplace Parking Levy which councils can choose to introduce. Scottish Government also launched a consultation on the introduction of a local discretionary transient visitor levy (often known as a 'tourist tax') in 2019. An independent analysis of the responses was published in 2020. Further work is currently halted due to COVID-19.

Local democracy and politics

The local government electoral system changed in the Local Government in Scotland Act 2004. Under this legislation, local elections take place every four years. In practice, since 2012, elections have occurred after five years, to avoid being held at the same time as Scottish Parliamentary elections. Residents of each ward directly elect three or four councillors to represent them through proportional representation. Prior to the change in electoral system, councils were generally led by a single majority party. Coalitions between two parties and independents, or sometimes minority coalitions, have become the norm.

There are 1,227 councillors in Scotland. The number of elected councillors on each local authority varies from 14 to 77, depending on the number of wards in its territory. Each local political party appoints its own leader. The leader of the largest party becomes Leader of the council and the de facto political authority. There is also a civic leader (the Provost or Convenor) who chairs meetings and acts as a figurehead, elected at full council meeting. The full council serves as a governing body, bringing together all elected councillors to make key decisions such as setting the annual budget and council tax level, appointing committees and electing a Convenor and deputy Convenor.

Decision-making in Scottish local government is mainly through committees of the full council, predominantly made up of elected councillors. Teachers, business leaders and others can be appointed to relevant committees as expert non-voting members. Local authorities also have a number of officer posts, which are largely administrative and performed by non-political staff, determined by individual councils. There are several statutory officer roles prescribed by the government, such as the council chief executive.

Citizen participation

Councils in Scotland can hold advisory referenda on their services, financial provision, and other local issues.^[45] Voting in such referenda is one way citizens can participate in local decision-making. Local authorities are also required to consult residents before implementing a road charge scheme.^[46] Such referenda are not frequently used but there are some illustrative examples. In 2005, the City of Edinburgh council held a referendum to test whether local people supported a new transport strategy, which included a congestion charge. The proposal was rejected and the charge was not introduced. In 2012, Aberdeen City council held a referendum on plans to redevelop the city centre's gardens. The referendum result approved the plans but they were subsequently voted against by the council.

At present, there are around 1200 community councils^[47] in Scotland. These community bodies serve as an intermediary between communities and local authorities in Scotland and represent the interests of local people. They are run by elected volunteers from the community. Local authorities have a statutory duty to consult community councils on planning, development and other issues that directly impact on local residents.

The Community Empowerment (Scotland) Act 2015 requires Community Planning Partnerships (CPPs: partnerships locally involving local authorities, health, police, fire and rescue services and other bodies) to consult community organisations at every phase of community planning. Particular focus is given to addressing inequalities during this process. In addition to area-wide Local Outcome Improvement Plans, CPPs are required to put together locality plans at a smaller scale, for areas affected by disadvantage.

The legislation also makes provisions for community asset transfers, which enable communities to take responsibility for land and buildings in their area. Community bodies can request to purchase, lease, manage or use land and buildings owned by councils, public bodies or the government. Available land and buildings are published on a register. Community bodies need to outline their plans for the land or building and the related benefits for their local area. The request needs to be agreed, unless there are valid reasons for refusal, such as larger benefits resulting from another proposal.

The Community Empowerment (Scotland) Act 2015 also introduced Participation Requests. These requests allow a community body to begin dialogue with their council over local issues and service delivery. In cases where the community body feels it could contribute to improving an outcome, they have the right to request to participate in that process. This could include offering volunteers, suggesting alternative approaches, or even proposing that the community body takes responsibility for delivering said service. The relevant public body has a duty to agree to the request and begin a process, or provide a good reason why that should not happen. Once the process is complete, the public body is required to publish a report, disclosing whether local outcomes have been improved and what the role of the community body has been in achieving this result.

Finally, the Participation in Public Decision-Making section of the Act gives Scottish Ministers the power to mandate Scottish public authorities to encourage and facilitate the participation of local people in decision-making over local issues and activities. This includes the allocation of local resources, a practice known as participatory budgeting. Scottish Government and COSLA are working with local authorities to reach a target of having at least 1% of their budget allocated through participatory budgeting. If realised, this would give local people a say in how almost £100 million will be spent in Scotland each year.

Selected Bibliography

Gov.scot. 2020. Local Government. [online] Available at: <https://www.gov.scot/policies/local-government> [Accessed 8 June 2020].

House of Commons Library, 2014. Scottish Independence Referendum 2014 Analysis Of Results. 14/50. London: The House of Commons.

Scan.org.uk. n.d. Knowledge Base - Scottish Local Government. [online] Available at: <https://www.scan.org.uk/knowledgebase/topics/local_government_topic.htm> [Accessed 8 June 2020].

Scottish Parliament Information Centre (SPICe), 2016. Subject Profile – Local Government In Scotland. 16/69. [online] Edinburgh: The Scottish Parliament. Available at: <https://www.Parliament.Scot/Researchbriefingsandfactsheets/S5/SB_16-69_Subject_Profile_Local_Government_In_Scotland.Pdf> [Accessed 8 June 2020].

SPICe Spotlight, 2019. Local Government since Devolution – local governance or local administration?. Available at: <https://spice-spotlight.scot/2019/11/14/local-government-since-devolution-local-governance-or-local-administration/> [Accessed 8 June 2020].

The Accounts Commission, 2019. Local Government In Scotland: Challenges And Performance 2019. [online] Edinburgh: Audit Scotland. Available at: <https://www.audit-scotland.gov.uk/uploads/docs/report/2019/nr_190321_local_government_performance.pdf> [Accessed 8 June 2020].

Torrance, D., 2020. "The Settled Will"? Devolution In Scotland, 1998-2020. 14/50. [online] London: House of Commons Library. Available at: <https://commonslibrary.parliament.uk/research-briefings/cbp-8441/> [Accessed 8 June 2020].

Uruguay

Uruguay is the oldest democracy in Latin America. The Economist Intelligence Unit Democracy Index 2019 classified Uruguay as a 'full democracy' and ranked it 15th in the world, just below the United Kingdom.

Uruguay is a representative democratic republic with a presidential system. The president is the head of state and the head of government. The president and vice-president are elected on the same ticket by popular vote for a five-year term. The President appoints the Council of Ministers, thirteen cabinet ministers who head executive departments. The ministers can be removed by the General Assembly by a majority vote.

The General Assembly consists of two chambers. The Chamber of Representatives (Cámara de Representantes) has 99 elected members representing Uruguay's 19 administrative regions, known as 'departments' (departamentos). The representatives are elected via a system of proportional representation. The upper house, or Chamber of Senators (Cámara de Senadores) consists of 30 members representing Uruguay's political parties, elected for a five-year period via proportional representation. The vice president presides over the chamber.

Until recently, Uruguay's governance was highly centralised and unitary. There were two levels of government, national and departmental. Departmental governments acted largely as arms of the state. Formal decentralisation of governance to more local levels has largely been taking place since 2010.

Historical development

Uruguay won its independence through a series of conflicts from 1811-1828, with Portugal, Spain and Britain mounting a series of invasions and counter-invasions. Throughout the 19th century, relations between the post-colonial states of Brazil, Uruguay, Paraguay and Argentina were tense, and this was expressed through a series of wars, and ongoing instability within Uruguay.

During the 19th Century, Uruguay developed as a two-party state. The Colorado (Red) party was a liberal party, representing urban interests, business, and reformist intellectuals. The Blanco (White) party – now the National party – was a conservative party representing rural interests, the church, and the military. These two parties have competed to govern Uruguay, and its development as a state has reflected the ongoing need for compromise and balance between the interests of these two political groupings.

At the beginning of the 20th century, Uruguay embarked on a series of reforms led by a Colorado president which put in place many of the foundations of Uruguay's democracy. This included freedom of expression and the press; universal suffrage; the abolition of the death penalty; and electoral systems of proportional representation. There were also social and economic measures intended to promote equality and workers' rights, including free and compulsory primary education; support for trade unions and recognition of the right to strike; maternity leave; and an eight-hour working day. This reforming programme was instrumental in Uruguay's transformation into a progressive social democracy.

From 1973 until 1984, Uruguay was ruled by a military dictatorship. During this period there were thousands of arrests, political opponents subjected to torture, political repression, killings and disappearances. Almost ten percent of Uruguayans emigrated. A key factor in the ending of the dictatorship was a referendum on proposals for reorganizing Uruguayan democracy. Voters rejected these proposals, marking the beginning of a negotiated return to democracy.

Since 1984, other political parties have emerged, most notably the Frente Amplio ('Broad Front'), a leftist alliance of more than 20 parties or movements. The Frente Amplio won the national election in 2004 through its support for an increased welfare state, and held power until 2019.

Key reforms in governance

Uruguay has adopted a series of constitutions, each of which has incorporated governance reforms. The 1917-18 constitution moderated the power of the presidency and also introduced full voting rights for men (women's suffrage followed in 1934), and an electoral system based on proportional representation. The constitution was approved by Uruguayan citizens in a plebiscite, the country's first use of a direct democracy mechanism. The constitution established the right of popular initiatives on local issues where these are supported by signatures from at least 25 percent of registered voters.

The 1934 constitution defined democratic mechanisms and thresholds for changes to the constitution itself through obligatory referenda (plebiscites) or popular initiatives. These were further defined and extended to include other types of referendum in the 1967 constitution.

A subsequent constitutional reform passed in 1966 states that the citizenry may use popular initiatives at both national and provincial levels to annul or derogate laws. Moreover, the electorate must be consulted on any constitutional reform or amendment by means of a plebiscite, or compulsory referendum.

Decentralisation of powers to more local levels has been a focus of more recent constitutional changes. The 1996 reform required the state to formulate decentralisation policies 'to promote regional development and social wellbeing', devolving greater powers to the departmental level, including more fiscal autonomy.

Finally, the 2009 Law on Decentralisation and Citizen Participation (Ley de Descentralización y Participación Ciudadana) formalised the third layer of governance, the municipio (municipality), with the election of local authorities taking on a range of local powers and some responsibility for managing resources. Municipios existed before 2010, with mayors appointed by the departmental governor. They had a mainly top-down function to implement departmental policies and priorities. The new law gave them more decision-making autonomy, and required the leadership of the municipio to be elected by local residents. The new law also articulated a range of principles for the municipios. These included: the efficient provision of state services, delivered closer to the people; the gradual transfer of powers to the municipios; citizen participation; and cooperation between municipalities for the delivery of services. The new law also defined the areas of public service that fall within the scope of a municipio or a departamento respectively. A principle of gradualism underpins these changes.

Structure and function of local governance

There are nineteen 'departments' (intendencias), which are subordinate to the central government. The role of departments is primarily to enforce national laws and administer national policies and institutions within their territories. They have traditionally been responsible for roads, transport, street lighting, public spaces, urbanization, housing, cultural activities such as theatres and museums, and the management and financing of some primary healthcare.

Executive authority is vested in a governor (Intendente), who administers the department, and in a thirty-one-member departmental board (Junta departmental), which carries out legislative functions including approval of the departmental budget. The governor and the members of the Junta are elected for five-year terms in direct, popular elections. According to an interviewee, whilst they are required to implement the national laws, departmental governments have considerable power and autonomy:

Some constitutional people, they say that they are like a king because their competencies are so wide and so unknown in some cases. They can do what they want to do. UR1.

The third layer of government, municipios or municipalities, are governed by elected municipal governments. In 2010 it was mandatory for locations greater than 5000 inhabitants to have a municipio, and in 2015 this was extended to all areas with more than 2000 inhabitants. Each municipio is run by a group of five elected representatives (the junta local), including an elected mayor (Alcalde). The mayor is the candidate who gains the most votes in the election of the Junta, and is the only remunerated member. Nevertheless, their role is the first among equals in a collective body, with all major decisions needing to be passed by a majority of the Junta members.

There are 112 registered municipalities across Uruguay. Three departments are fully subdivided into municipalities; the remaining 16 departments have some areas which are not covered by municipios. Around 20 percent of Uruguay's territory is currently covered by municipios; this includes some 72 percent of the country's population – with a significant bias towards urban populations.^[48]

Municipios have taken on a broad set of responsibilities, to a greater or lesser degree. Most have at least shared responsibility for the maintenance of public spaces and associated services such as lighting, waste collection and street cleaning. Many also have a role in collecting certain taxes and issuing official documentation, such as birth certificates or drivers' licences, on behalf of the department. Around half of municipios run social programmes in areas like health or old-age care, and almost all have taken on some responsibilities in relation to cultural or leisure provision such as libraries and sports facilities.

In Montevideo the structures of local governance are slightly different, reflecting the fact that the eight municipios created in Montevideo are extremely large.^[49] There is an additional layer of governance – effectively a fourth tier – in the form of 18 zonal community centres (Centros comunales zonales – CCZs), which have responsibility for local service delivery, and corresponding Consejos vecinales (CVs) or community councils, which are filled with elected local residents. CVs do not hold decision-making powers but focus on citizen participation and gather public opinion to feed back to decision makers in the CCZ or the municipio.

Financial arrangements in local governance

Although there is an emerging process of decentralisation, Uruguay is still heavily centralised from a fiscal perspective. Between 1991-2017, more than 90 percent of national public spending was executed directly by the central government, with departmental governments responsible for just 10 percent.

Departmental governments have two main sources of income: national government transfers and local taxation. Direct conditional or unconditional transfers from the central government are to deliver agreed public goods or services for which departments are responsible. Departmental governments rely on central government for a high proportion of their income, and there are large differences between the ability of different departments to raise income locally. Central government funding accounts on average for 43 percent of departmental government income. The mechanisms used for determining the amount of central funding for each department are varied, and subject to some degree of political negotiation.

Departments raise income via local taxation powers or from devolved taxes fixed by central government but which they collect and use. Income sources include vehicle tax, property and related taxes, and fees for provision of services. Overall, there is a lot of variation between departmental income and their per capita spending. Between 2006 and 2014, average annual per capita spending in the lowest-spending department, Canelones, was 6655 Uruguayan pesos (about £134); in the highest-spending department, Maldonado, it was 23,562 pesos (about £474).

Municipios are financed directly from national government, and through budget allocations from departmental governments. National government funding to municipios is channelled via the Incentive Fund for the Management of Municipalities. Of this funding, 75 percent is allocated according to criteria which aim to allocate proportionately more money to municipios with higher levels of need. A further 15 percent of the total fund is allocated to municipios for projects and programmes, and on the basis of the achievement of results and commitments. The size of the Incentive Fund has increased rapidly since its inception, rising from just under 100 million pesos in 2011 to its 2020 level of 1480.5 million pesos.^[50] Municipios do not yet have the right to set local taxes, although they do collect some taxes on behalf of departmental governments. They do not have any source of income independent of central or departmental government.

Municipal spending accounted for around 13 percent of department budgets overall in 2018.^[51] Around 61 percent of municipal expenditure is used for remuneration of officials, with just 25 percent allocated to operations. According to one interviewee:

They have no proper money, … and they do really what they can... The central government has been transferring money to do what they [central government] consider important things to do at the local level. UR1.

It is clear that there are still important challenges to be resolved in the distribution of money and competencies between the different levels of government, described by an interviewee:

The decentralisation is very important and… we don't [yet have a] law that reinforces both state politics and local politics… The decentralisation between first and second level of government about the competencies and about the budget… that is yet an issue that will be over the table in the next year. UR1.

Local democracy and politics

The 1996 constitution established that departmental elections and national elections would held at different times. Previously, it had been obligatory for voters to vote for national and departmental candidates from the same parties. The reforms enable greater separation and differentiation of voters' preferences between national and local issues, and reduce the extent to which national political issues define local and regional elections. As one interviewee commented:

That was a very important reform because until that moment, the local agenda were tied, were contaminated by the national agenda. From that moment we have the possibility to discuss about local agendas. UR1.

Nevertheless, the high level of integration of the political parties at all levels means that voter preferences remain fairly stable, and that political party preference is a strong predictor of voter behaviour in both elections and in referenda and plebiscites.

The extent and rate at which Uruguay's municipios are developing to assume greater local powers is very diverse. The departmental political context is an important influencing factor on this. In particular, the department governor (intendentes) has a considerable influence on the rate and nature of development of the municipios, and the extent to which these are able to act autonomously. Department governors may consider municipal mayors as emerging political rivals, and their decisions about the devolution of resources and responsibilities to municipios may reflect this. They hold considerable discretionary power to limit the rate at which the third level of government develops.

In addition, political differences between the central government and departmental governments mean there has been a tendency for the central government to leapfrog the departmental governments to interact directly with municipios, which also creates tensions. As one of the interviewees described:

The national government are always trying to overlap the departmental level and go direct to the municipalities. That's… creating very high noise here because most of the departmental governments are of the opposition party. UR1.

Socio economic position and challenges

Uruguay stands out in Latin America for its high per capita income, relatively low levels of inequality and poverty and an almost complete absence of extreme poverty. Uruguayans have good access to basic services including education, clean water, electricity and sanitation. The country has strong institutional stability and low levels of corruption.

In July 2013, the World Bank classified Uruguay as a high-income country. Its economy grew on average by 4.1% annually between 2003-2018, despite a difficult regional macro-economic context. However, the average figures mask a significant slow-down in economic growth since 2014, with a drop in exports, and a resulting increase in fiscal deficit. Unemployment figures have increased. Concern about the current economic situation and rising crime were major factors in the 2019 presidential elections.

Inclusive social and redistributive policies have helped to ensure that the benefits of economic growth have supported poverty reduction and increased equality. According to official measures, the percentage of the population living in poverty fell from 32.5% in 2006 to 8.1% in 2018, while income levels among the poorest 40 percent of the Uruguayan population increased much faster than the average across the population.

Nonetheless, there are significant inequalities across the country. The proportion of the population below the poverty line is still significantly higher in the north of the country; among children and young people; and among people of African descent. The high level of concentration of population and resources in the capital, Montevideo, where almost 50 percent of Uruguay's citizens live, also creates challenges for equity and decentralisation. This has led to particular support for decentralisation outside of Montevideo. According to one of the interviewees:

Well, in fact, local government are very supported outside the capital city. Because, it is a worry that the central government is in Montevideo and so it will tend to make decisions for Montevideo. UR2

Another interviewee considered that the decentralisation process has not yet achieved a lot in changing this situation:

So the opportunities for people that live, for example, on the Brazilian/Uruguayan border, that is the poorest town of the country, are very less than if you live in the capital or the south or the Rio de la Plata… And the decentralisation has not solved [this]. UR1.

Citizen participation

Citizen participation in politics through elections and formal direct democracy is a well-established tradition in Uruguay. Voting in national elections and certain types of referendum is compulsory, which means that electoral turnout for national elections is high at around 90 percent. Any constitutional changes must be approved by the electorate through a plebiscite. Since 2003, there have been five constitutional referenda in Uruguay, all with high levels of participation. The constitution also allows citizens to propose popular initiatives in order to change or annul laws at both national and departmental levels, where these are backed by a certain percentage of voters registered in the relevant areas. In practice the passage of referenda and popular initiatives is highly dependent on the established political parties and their factions.

Citizen participation is one of the fundamental principles underpinning the formal establishment of municipios in Uruguay. However, in contrast with well-defined laws about elections and referenda, it is less clear how citizen participation at the level of the municipios is being defined and measured, or to what extent it is having an effect on local policies.

The Frente Amplio party has been instrumental in the creation of the municipios, and in promoting citizen participation in governance. These changes have been strongly opposed by the Colorado and National parties which have been concerned they would undermine representative democracy. In regions such as Montevideo, where the Frente Amplio has held power for longer, citizen participation is more advanced – for example through a long-established participatory budgeting process. In contrast, the expansion of citizen participation in areas governed by the Colorado or National parties has been more limited.

Municipios are required by law to make an annual public presentation to report on their achievements in relation to their commitments. They should also present their social programmes and plans in a public forum. How this should be carried out is at the discretion of the junta local. As one interviewee notes, this has led to wide variability in the level to which the juntas enact participation:

There are councils that tend to be innovative and tend to create participation mechanisms besides those stated by law. And there are other municipalities or local municipal councils that only implement what the law says. UR2

A 2016 review of the first five years of municipios asked respondents about their levels of participation in different types of public engagement. Eighty-seven percent of the respondents said they had never participated in any municipal meeting during the five years under review, and only three percent said they participated frequently or very frequently.

A 2002 review of processes of decentralisation in Montevideo suggested that although city services had improved since the Frente Amplio came into power, initial improvements in public participation in governance did not appear to have been sustained over the longer term. It regarded this as the result of changes to the structure of local governance arrangements, and particularly the introduction of formal governance at the level of the municipio. The author suggests that the introduction of additional levels of decision-making contributed to citizens' lack of confidence that they could influence government decisions.^[52]

More recently, Montevideans' interest in participatory budgeting has decreased over time. In 2006, 2200 proposals were submitted, compared with just 500 in 2016. Commentators suggest that this is because of the lack of execution of the accepted proposals. Similarly, analysis suggests that the lack of public interest in and knowledge of the work of community councils in Montevideo reflects a lack of real power for these institutions. Since 2004 there have also been declines in the number of people willing to stand for election to community councils, while the turnout for community council and municipal elections in Montevideo has also fallen.^[53]

Equally, interviewees suggested that the culture of participation varies depending on local factors:

The local culture, the participative culture and the history of participation, that has more to do with the thing… because sometimes you have two local governments that propose the same mechanisms, are doing similar things. But the response is different. UR2.

Uruguay's decentralisation and citizen participation processes are still in their early stages in many respects. It remains to be seen how the election of a National Party president taking office in 2020 will affect the further development of local democracy.

Selected bibliography

Cardardello, Antonio and Paula Ferla (eds.) (2019), Descentralizacion en Uruguay: Propuestas para Avanzar en la Agenda, Konrad Adenauer Stiftung, Montevideo.

Catz, Patricia et al.(2015), 'Municipalización en Uruguay: Percepción ciudadana', Observatorio Territorio Uruguay, Dirección de Descentralización y Inversión Pública, Montevideo. https://otu.opp.gub.uy/reportes

Ferla, Paula et al. (2012), 'Descentralización y Participación democrática en Montevideo: Los Concejos Vecinales y un aporte sobre la cuestión metropolitana', Defensoría del Vecino, Montevideo.

Ferla, Paula et al. (2016), Panorama del nivel municipal en Uruguay, Fundación Konrad Adenauer: Universidad Católica del Uruguay, Montevideo.

Goldfrank, Benjamin (2002), 'The fragile flower of local democracy: A case study of decentralization/participation in Montevideo', Politics and Society 30(1), 51-83.

OPP (2019), 'Informe de Desarrollo municipal: Octubre 2019', Oficina de Planeamiento y Presupuesto, Montevideo, https://www.municipios.gub.uy/figm-opp

Serdült, Uwe and Yanina Welp (2015), 'How sustainable is democratic innovation? Tracking Neighbourhood Councils in Montevideo', Journal of Politics in Latin America 2/2015, 131-148.