Source: https://wcd.coe.int/ViewDoc.jsp?Ref=CPL(13)6part2&Language=lanEnglish&Ver=original&Site=COE&BackColorInternet=9999CC&BackColorIntranet=FFBB55&BackColorLogged=FFAC75
Timestamp: 2015-02-28 19:21:05
Document Index: 75510337

Matched Legal Cases: ['Art 3', 'Art 9', 'Art 8', 'Art 8', 'Art 8', 'Art 8', 'Art 8', 'Art 9', 'Art 8', 'Art 8', 'Art 8', 'Art 8', 'Art 8', 'Art 8']

Congress of Local and Regional Authorities - The new forms of control over local authorities
The new forms of control over local authorities
Rapporteur: Guido RHODIO, Italy
Chamber of Local Authorities, Political Group : EPP/CD
1. The Preamble to the European Charter of Local Self-Government, the Charter’s “mission statement”, sets out the Charter’s underlying purpose. It is to enhance democracy through the “existence of local authorities endowed with democratically constituted decision-making bodies and possessing a wide degree of autonomy with regard to their responsibilities”. The substantive articles of the Charter itself contain a package of guarantees designed to establish the autonomy of local authorities. It would be invidious to rank those guarantees in order of importance. There is an assumption that all are a necessary part of the overall package. If, however, we are tempted to pick out as pre-eminent the need for democratically based local authorities to enjoy “the right and ability . . . . within the limits of the law, to regulate and manage a substantial share of public affairs” (Art 3) and then for those authorities to have available the financial resources necessary to discharge their responsibilities (Art 9), we might then choose Art 8 of the Charter, on administrative supervision, as the next most significant. Plainly, undue supervision and/or control by central government would undermine the autonomy which the Charter seeks to protect. Art 8 prescribes that any administrative supervision of local authorities may be exercised only according to such procedures and in such cases as are provided for by the Constitution or by statute - and normally only with the aim of ensuring compliance with the law and constitutional principles. Supervision in respect of expediency may, however, be exercised with respect to tasks whose execution has been “delegated” to local authorities. Supervision must be proportionate. The Charter’s Explanatory Report advised that Art 8 “deals with the supervision of local authorities’ activities by other levels of government. It is not concerned with enabling individuals to bring court actions against local authorities nor is it concerned with the appointment and activities of an ombudsman or other official body having an investigatory role. The provisions are above all relevant to the philosophy of supervision normally associated with the contrôle de tutelle which have (sic) long been the tradition in a number of countries. They thus concern such practices as requirements of prior authorisation to act or of confirmation for acts to take effect, power to annul a local authority’s decision, accounting controls, etc.”
2. There has been, over the years, a general concern about the ways in which there have been failures to meet the demands of Art 8 in member countries of the Council of Europe. Such failures inevitably take different forms in different states, depending on differing governmental contexts; the different traditions of systematic and institutional supervision in some states compared with more ad hoc patterns of controls in others; and, in the Charter’s own terms, differing approaches to the distinction between the supervision of “delegated” responsibilities as opposed to the “original” or “own” responsibilities of local authorities. Furthermore, the position as stated under Art 8 cannot be isolated from the guarantees under Art 9 of financial autonomy and the danger that financial controls by the state may provide ready access to indirect forms of administrative control on policy or expediency grounds. And another complication, in the interpretation of Art 8, is determining which types of supervision or control breach its provisions. Monitoring on grounds of “legality”, whether by courts or by governmental institutions is not, on its face, offensive but distinctions between “legality” and “expediency” are not always precise - especially where the standards of expediency to be enforced are themselves imposed by the law. There are other marginal instances. The Explanatory Report of the Charter advises that ombudsman and other investigatory bodies are not covered by Art 8 but the distinction between these and other bodies which would be covered may not always be clear.
3. Instances of suggested breaches of Art 8 have been exposed in Congress national monitoring reports and Recommendations1.
4. The impact of administrative supervision and control was also the subject of a report in 1996 (CPL (3)7 Rapporteur: Georgio de Sabbata), itself based on a substantial research report by Alain Delcamp. That report provided an excellent taxonomy of supervision and control and the importance of the Article 8 standards. It included an analysis of forms of financial supervision. Overall, the report concluded that expediency supervision and control was on the decline across Europe. In addition, Recommendation (20) 1996 of the Congress on the application of the European Charter on Local self-government called upon the Committee of Minsiters to adopt a recommendation in this field, in order to in particular define the conditions of control on the acts, persons, and local and regional elected bodies. This resulted in the adoption by the Committee of Ministers of Recommendation (98) 12 on the supervision of local authorities' actions on the basis of the report by the Steering Committee on local and regional democracy (CDLR) on the control and audit of acts of local authorities prepared by Professors Juan Santamaria Pastor and Jean-Claude Nemery.
5. It may reasonably be assumed that this trend noted in the de Sabbata/Delcamp report has continued. Increasing sensitivity to the general standards of local authority autonomy has almost certainly produced a reduced level of central government intrusion. It may have become more usual for the activities of local authorities to be subject to systematic forms of monitoring and supervision but these will, in most cases, be processes which are internal to local authorities themselves and undertaken to meet self-imposed standards. They will not normally involve the imposition of any externally-imposed controls.
6. There may, however, be some reasons for concern that newer forms of supervision and control are emerging. Paradoxically this may be the result of a general strengthening rather than a weakening as such, of local or regional powers. Thus, it may be that, because more substantial functions have been conferred on local authorities, there is a greater central concern about the efficient (and, to a degree, uniform) delivery of services to citizens and a perceived need for greater supervision and control as a result. This may include additional financial controls introduced for the purpose of influencing local policy decisions or forms of centrally-driven ‘best-value’ supervision (or audit) with policy consequences. Equally, an expansion of the role of regional government between the central and local levels may result in an expansion of expediency controls by regional governments (perhaps seeking an expansion of their policy space) over local authorities. There may, in addition, be quite separate reasons in some countries for the growth of new forms of supervision and control.
B. THE CURRENT INQUIRY
7. The purpose of the current inquiry was to take a snapshot of developments in administrative supervision across Europe in mid-2005 and to see whether, at that point, national trends were in fact in the direction of more intrusive supervision with adverse effects on autonomy. The methodology adopted was the familiar approach of the written questionnaire inviting responses from the members of the Group of Independent Experts for each Council of Europe member state and the actual questionnaire circulated is appended to this report. As can be seen, questions included those specific to the particular issues of supervision by ‘regional’ governments and of ‘best value’ monitoring, as well as invitations to add more general material. Research by these methods does, of course, have its limitations. It lacks, in particular, the capacity fully to locate the general Charter issues within the governmental context of individual states. It can, however, provide a general impression of how things stand across the continent.
8. Questionnaire returns were received in respect of the following countries: Armenia, Austria, Azerbaijan, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Georgia, Germany, Greece, Hungary, Iceland, Italy, Latvia, Liechtenstein, Luxembourg, “the former Yugoslav Republic of Macedonia”, Netherlands, Norway, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, Switzerland Turkey, Ukraine and the United Kingdom (33). Thanks are due to all respondents. Although there was no questionnaire return, as such, from Belgium, some account has been taken, because of that country’s recent experience of federalisation, of the Congress report and recommendation on Belgium of 20032.
9. In this report, the questionnaire responses to the specific issues of the impact of regional governments and then of ‘best value’ interventions are treated first in sections C and D. In section E there is a summary of views expressed on the general trend of administrative supervision and control. Section F contains some concluding remarks.
C. SUPERVISION AND CONTROL BY REGIONAL GOVERNMENTS
10. Turning then to the responses under this head, it is probably the case that they can be seen in three groups:
(1) Those countries where there is nothing to report: Armenia, Azerbaijan3, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia4, Finland, France, Georgia5, Greece6, Hungary, Iceland, Latvia, Liechtenstein, Luxembourg, Macedonia (FYROM), Netherlands, Norway, Portugal, Romania, Slovakia, Slovenia, Sweden, Turkey7 and Ukraine.
11. What is meant by ‘nothing to report’ is that, in these countries, there has been no recent introduction of democratic regional government such as to produce new questions about the supervision of local authorities.
(2) The ‘classic’ federal countries of Austria, Germany and Switzerland.
12. In these countries too, it can be said that no ‘new’ regional constitutional arrangements have been introduced. On the other hand, of course, they are countries in which federalism has produced the conditions in which the constitutionally, or even pre-constitutionally, established Länder or cantons have long been the institutions with responsibility for the supervision of local authorities. Thus, even though not in any sense new institutions, the Länder of Austria and Germany and the cantons of Switzerland are long-established examples of regional governance. But nothing stands still and they can also provide examples of more recent changes in their relationships with local authorities and variations in these relationships between one Land or canton and others. In Austria although the formal rules of federal constitutional law and the general structure of municipalities have remained unchanged, supervision by Länder over local budgets has increased as a result of a new Fiscal Constitutional Act and the Austrian Stability Pact. Whilst having no direct legal effect on municipalities, the Länder must collect data on local budgets8.
13. In Germany, whilst it cannot be said that supervision of local authorities by Länder has increased - in a sense it may even have lessened as the powers of Länder themselves have lessened in favour of the State, there have developed different degrees of supervision and control in the different Länder. This is partly the result of historical administrative traditions but also the result of variations in the size of the Länder. In the ‘city states’ and small Länder, relations between Land and local authorities are quite different from those in the much larger Länder. Variations also occur as a result of differences in the political relationships between the two levels. 14. In Switzerland, two principal factors have been relevant to a tendency towards greater cantonal supervision and control of communes. One has been in the financial area where cantons have undertaken greater supervision, in part because of a Federal Supreme Court ruling which held cantons liable in circumstances where a commune’s financial failings can be attributed to inadequate cantonal supervision. The other influence has been an increasing need for cooperation between and indeed the merger of small communes because of the need for them to discharge increasingly complex tasks, especially in the enforcement of federal law eg in the area of spatial planning. At the cantonal level there is a tendency to promote intercommunal cooperation and integration, whether by financial incentives or by making such cooperation or integration compulsory. This leads to quite sharp variations between the practice of different cantons, dependant, for instance, on cultural factors, different traditions of communal autonomy and structural factors such as the different size of communes and thus the varying needs for adjustment. It may, of course, be objected that moves in the direction of greater cooperation and mergers (even it mandatory) are not in themselves and in all cases indications of a greater measure of central control. This must be true. Much will depend, however, on the manner in which such changes are undertaken and the wider context. Reorganisation of this part may, in some circumstances be correctly interpreted as part of a wider strategy of increasing central control.
(3) Countries where the creation of a higher level of elected regional government has produced the circumstances for new forms of control/supervision: Belgium, Spain, and the United Kingdom9 .
15. It is the countries in this category which have the potential to raise the most interesting questions in this context. In principle, it seems desirable in the interests of establishing intermediate degrees of subsidiarity that, where appropriate and especially in the larger non-federal countries of Europe, a regional level of democratic government should be inserted between the level of state government itself and the local authority level. It would, however, be a paradox if it were to turn out that the insertion of that new intermediate level of regional government were to operate in such a way as to damage the quality of local self-government. One such way could be by a resulting increase in administrative supervision.
16. The Congress monitoring report and recommendation on Belgium of 2003 provide perhaps the strongest illustration of this trend. Belgium is, of course, the creature of its own very special circumstances but a recurring theme is that, as expressed in para 8(A)(ii) of the recommendation, ‘the federalisation of Belgium raises the typical problem of competition between federalism and local government’. The report notes the possibility of regional autonomy operating as a limitation of local autonomy. The regional regulation and supervision of local authorities may increase, for instance, in such a way as to ‘limit excessively the autonomy of schools at local level’. Spain provides another important case study as a result of the establishment of the regions (Comunidades Autónomas) in the 1980s - in effect, a substantial decentralisation of central state authority, including the reallocation to the regions of virtually all aspects of the supervision or control of local authorities which now maintain very little formal contact with the state itself. Nor was this shift of responsibility to the regions a single event. Rather there has been a continuing reshaping of the powers and responsibilities at the different levels, producing changing interrelationships between them. In particular, the regions have sought to expand their social role (and also the associated budgets) by using their legislative authority to absorb competences which had formerly been in the hands of the provinces. This has, in turn, produced a number of consequences, one of which has been to enable regions to intrude into the domain of land use management by requiring that local land use planning must take into account and thus be subordinated to regional plans. There is a clear reduction in local discretion. This may be carried further where the region, in effect if not formally, imposes new expediency controls over local decision-making by, for instance, requiring that, before local plans are adopted, a regional level environmental impact assessment must be performed. Local decision-making becomes dependent upon regional decisions. Another area of increased regional influence lies in a region’s power to legislate for and implement a programme for the compulsory co-ordination of local services such as water supply and public transport. What often happens is that the regional executive creates an administrative body with representatives of both the regional and local administration, but with the regional representatives in the majority. Decisions made by these joint bodies are then binding on the local authorities. It seems likely that these measures tending to increase regional control at the expense of local autonomy will themselves increase, although with scope for variation between the regions.
17. In the United Kingdom conditions are different. The introduction of devolved government dates back only to 1999 and it is, therefore, more difficult to discern with accuracy how things are developing. In addition, legislative devolution is confined in effect, to one region - Scotland10. There are, however, many parallels with the situation in Spain. There were, from the start, concerns that the new powers of the Scottish Parliament and the Scottish Executive could be exercised to the disadvantage of local government in Scotland. Although some measures were put in place to restrain such activity by, for instance, the creation of a ‘framework agreement’ between the Scottish Executive and the Convention of Scottish Local Authorities, concerns about possible threats to local autonomy have arisen. Policy initiatives, already implemented or proposed, have been aimed at either removing powers from local government or compelling coordination between local authorities in the fields of eg town and country planning, social work and public transport.
D. ‘BEST VALUE’/EFFICIENCY SUPERVISION AND CONTROL
18. A significant difference, as we turn to this second question, is that it raises issues of potentially broader compass. There will be no additional controls over local authorities by elected regional governments unless the decision has, in the first place, been taken to create the new regional authorities. This narrows the field. With ‘efficiency’ controls, on the other hand, these could be introduced anywhere and are not dependent upon any prior structural or administrative reform although it may well be that there are some preconditions which make the introduction of such supervision or control more or less likely in practice. We return to these below.
19. It should, in the first instance, however, be remembered why concerns arose and this limb of the enquiry was prompted. For one thing, the de Sabbata/Delcamp of 1996, despite its generally optimistic conclusions about the decline of supervision, raised a question about signs of increased expediency supervision in Austria. In addition, there had been suggestions, in at least two national monitoring reports11, that the intervention of state-level audit of local authorities might be capable of operating in ways which were invasive of local autonomy on Art 8 grounds. These particular concerns were the subject of a special enquiry and debate held at a Hearing on Local Government Audit at the meeting of the Institutional Committee of the Chamber of Local Authorities held on 7 April 2003. More broadly, there had been an assumption that general trends in governmental arrangements might bring local autonomy under pressure at this point. Central (or regional) governments might feel increasingly compelled to keep not only their own spending efficiency under review but also the efficiency of other public bodies including local authorities. The outcome of the enquiry by questionnaire has not been wholly conclusive. The responses to section 9 of the questionnaire produced “not applicable” answers in the case of Armenia, Austria, Bulgaria12, Czech Republic, Finland, France , Georgia13, Netherlands14, Slovenia, Switzerland15.
20. On the other hand, a number of reports from the experts of the Group of Independent experts (GIE) do contain suggestions of tendencies towards efficiency controls where there already exists a state level institution with the task of supervising public sector accounting practices. These may take the form of eg a State Audit Office (Estonia below) or a Cour de Comptes (Italy, Portugal (below)) which may have the capacity to reach beyond questions of the legality of expenditure and accounting and into questions of efficiency, although, as the Spanish report implies, a minimum condition of such an expansion of supervision and control is the allocation of the necessary resources to the authorities required to undertake these tasks.
21. Another comment on the capacity of supervising bodies is made in the Estonian report in relation to the State Audit Office where it is noted that the Office manages to audit only a limited number of local authorities each year. The State Audit Office has the responsibility of assessing performance by reference to economy, efficiency and effectiveness but, in relation to local authorities, only where property of the state is transferred into their possession, where allocations/subsidies are made from the state budget and funds allocated for the performance of state functions (and funds of the European Union). Further powers of control have been extended to the State Audit Office in relation to the possession, use and disposal of municipal property by local authorities from 1 January 2006. These powers supplement others exercisable by the “Chancellor of Justice” and the county governor mainly on grounds of legality but including, in the case of the latter, a power to refer transactions involving state assets to the Audit Office for investigation, with the possibility of further scrutiny by a Select Committee of the Parliament. It is commented, that whilst it cannot be asserted that the Estonian system of supervision of municipal activities contradicts the principle of local autonomy, problems of differentiation between legality and expediency and also the possibility of political manipulation of the timing of audits may be the cause of some concern.
22. In Portugal, it is the Cour de Comptes which has the power to monitor public bodies (including local authorities) on grounds of economy, efficiency and effectiveness. It is commented that, since this power is conferred by law, it can be claimed that it is exercised by a body - the Cour de Comptes - which is independent of central government. There is also a form of supervision exercised (a posteriori only) by the General Inspectorate of Finances, reporting direct to government. Both sets of controls may lead to recommendations and, to the extent that, in the case of review by the Cour de Comptes, a recommendation may operate prospectively, this may touch upon the autonomy of a local authority, although not done by a central government agency. Where the recommendations, from either source, are made retrospectively, it is commented that this may have an educative effect and operate to reinforce political responsibility, especially where local authorities may not have created their own internal systems of audit.
23. In Romania, it appears that there is a very limited form of supervision undertaken both by the Cour des Comptes and a government agency but without impact on local authority autonomy. There is a similar comment on the Italian Corte dei Conti and the Slovenian Court Audit. Supervisory controls are also exercised by government ministries but only on grounds of unconstitutionality or illegality. On the other hand, in Turkey, whilst supervision and control are also not permitted on grounds of expediency, recent legislative changes may have the effect of introducing expediency controls - especially where supervision extends to oversight of management and control systems, performance auditing and compliance with development plans and strategies. From Bulgaria is the comment that state organs do not have any powers to supervise the expediency of the decisions of local authorities, many of which conduct their own internal analyses of performance. On the other hand, in Slovakia, internal audit on 3E grounds (economy, efficiency and effectiveness), though required by law, is described as “extremely rare”. The Supreme Audit Office did not until recently have the power to audit local authorities on 3E grounds. Now, however, the Slovak Parliament has approved a proposal )effective from 1 January, 2006) to extend the powers of the Supreme Audit Office to cover local and regional authorities in this way.
24. In Spain, a number of different factors (some deriving from older more traditional legislative provision, some much more recent and many also deriving from the regionalisation already discussed) have produced an increase in the number of situations where prior approval or authorisation of local authority decisions is required or indirect expediency control is injected by other means such as where a national or regional authority acts to protect its property interest or an interest embraced by its own national or regional competences.
25. Although the detailed situation is different, a similar comment on the combination of traditional legislative provision and recent structural and other reforms can probably be made about France. Whilst it is formally the case that since the reforms of the 1980s central government supervision of communes on grounds of expediency has been wholly lifted, the combined effect of the imposition of a legal duty to respect the general interest, reorganisation of the mechanisms of legal review, the creation of regional Chambres des Comptes of broad competence, the impact of contractualisation of relations between public authorities, and the introduction of coordination of the work of communes all produce new and sophisticated patterns of ‘control’ over a system of local government in which 36,000 out of 37,000 communes have populations of less than 1000 inhabitants.
26. In Germany, against a background in which the constitutional guarantee of protection from expediency controls over local authorities is sustained, there have developed a number of mechanisms, with varying degrees of independence from Land governments, designed to improve the efficiency of local authorities. These, however, probably stay on the right side of the Charter line and do not involve intrusion into local autonomy, whilst tending to require greater accountability of local authorities to their own populations.
27. In Azerbaijan there appears to be a rather mixed picture, unsurprising in its ‘transitional’ condition. The overall position seems to be one in which local authorities which have never had the opportunity to acquire any substantial degree of autonomy continue to have their policy freedom constrained by a mixture of legislative, financial and audit controls. Similar features appear to be evident in Ukraine where, despite the revolutionary changes of 2004 and the emergence of new democratic pressures, there remain strong vertically-imposed controls over local authorities. Croatia seems also to produce a mixed picture but, at least in formal terms, the work of the National Audit Office is independent of government and largely confined to a monitoring of legality. Denmark is a country in the midst of substantial local government reforms due to produce, from 1 January 2007, a new structure of regional government (five regions) and a substantial reduction in the number of local authorities from 273 to 98. Best value/efficiency control in local government is primarily achieved through the system of financial grants. There is an increasing concern in the country that local service delivery be efficient and, to a greater degree than in the past, provided at uniform standards. This has led to an increased degree of monitoring of standards, assisted by computer technology.
28. In Greece, too, it is impossible to disengage questions of central supervision and control from the substantial structural reforms which have taken place since 1994. The replacement of the old “decentralised prefectures” by the “self-administered prefectures” and the creation, therefore, of two levels of local government has produced a general situation in which the policy/expediency controls over the higher level have decreased but that, broadly put, controls over the lower level have increased. One other institutional development has been the changes over time in the membership of the “tripartite commissions” which monitor on grounds of legality. It appears that, despite initial changes in favour of greater state control in 2000, there was a reinstatement of greater independence in 2002. (There has also been a removal of ministerial control over the decisions of the commissions.) Equally, however, there have been adjustments to the powers of the Cour de Comptes, especially to enable a priori scrutiny of budgets and to the general powers of the state of impose financial controls. These include powers of expediency control over the budgets of the “self-administered prefectures” and controls over the second-level municipalities and communes which give, in effect, efficiency-based controls to the Ministry of the Interior. Similarly, obligations to undertake local expert audits of accounts also produce the possibility that scrutiny of the resulting certificates by state officials also enables expediency controls.
29. Iceland is another country where reform is reducing the overall number of local authorities - during the last 30 years the number has decreased from 223 to 105 and the process continues. This has, in turn, led to greater professionalism in financial accounting and control. The Ministry of Social Affairs, after consultation with the Association of Local Authorities, has issued guidelines and the accounts of authorities are monitored by a special Monitoring Committee. Procedures for dealing with authorities in financial difficulties may lead to suspension by the Minister of a council’s financial powers and the appointment of special financial management board to take temporary control of the fiscal management of the authority - a procedure rarely used in practice.
30. In Luxembourg, where some concerns were earlier expressed in a Congress resolution of 2005 about the growth of central supervision, a measure of control is exercised through the use of specific financial grants and the advisory and supervisory role of the local ‘commissaires de district’.
31. In “the former Yugoslav Republic of Macedonia”, the substantial extension of decentralisation since constitutional amendments of 2001 and a new Law on Local Self-Government of 2002 has been accompanied by the creation of a new State Audit Office and new rules for internal audit in all public institutions including local authorities. Local internal audit units report to the mayor. Whilst it is too early to evaluate the impact of the new procedures on local autonomy. They have the capacity of provide the conditions of new forms of transparency, rationality and efficiency but it is not clear how far financially based expediency controls, sometimes exercised in a partisan way, may also prevail.
32. In the Netherlands, although a priori supervision of local government decisions and the withholding of approval on expediency grounds has decreased significantly in recent decades, the government has nevertheless been unwilling to withdraw its reservation from Art 8.2 of the Charter. The general requirement of budget approval by higher-level bodies was lifted in 1994 but, in some situations where there are financial problems, budget scrutiny can be applied. Internal scrutiny/audit by “Counting Chambers” has been adopted (2002 and 2003). These Chambers review legality, effectiveness and efficiency.
33. In Norway, a country in which there has been an established tradition of local authorities with very substantial powers and also of central supervision and control on grounds of expediency, there has been a recent tendency in the direction of reduced expediency supervision. On the other hand, there has also been an introduction of techniques for scrutiny on grounds of quality and efficiency by new semi-independent agencies of central government, especially in fields such as health and education. The health supervision authority supervises the operation of health services with no distinction between municipal, private or state-run services. While the municipalities have responsibility for public primary schools these are subject to scrutiny by a central government authority with responsibility for standards of school management. The purposes of these forms of scrutiny vary but include protection of standards of public safety, equality and financial efficiency. The powers of the supervisory bodies vary and range from reporting to central government, through the issue of recommendations and advice, to the issue of enforceable orders. It seems likely that supervision of this kind will tend to increase, with important consequences for politically sensitive sectors such as health, education and the social services where changing political objectives at the central level may have important consequences for central-local relations.
34. The United Kingdom belongs to much the same tradition as Norway - strong local authorities with an historically large range of competences but equally with a strong record of central government intervention unconstrained by any formal constitutional protection for the local authorities affected. This has left open the opportunity for central government to impose, by statute, financial and policy controls, and latterly, in England, the use of performance audit (comprehensive performance assessment) under which the independent Audit Commission16 measures the overall competence of all authorities - following which the better authorities are rewarded by lighter regulation but those who perform badly may be subjected to intervention by ministers.
E. GENERAL TRENDS
35. Under the heading of the ‘General Situation’, the members of the Group of Independent Experts, respondents to the questionnaire, were invited to answer the question: Is it your view that supervision and control by central or regional authorities on grounds of expediency is (i) increasing (ii) decreasing (iii) producing a mixed picture or (iv) static? The answers to this question did themselves produce a ‘mixed picture’ and it is likely that, in any event, they were quite strongly affected by different interpretations of the question by the different respondents. The question itself was very crudely put and obstructed more sophisticated responses. Nevertheless, a crude analysis of responses to a crude question produced the following:
Control/supervision increasing (7)
Austria (slightly), Azerbaijan, Denmark, Georgia, “the former Yugoslav Republic of Macedonia”, Portugal, Spain, United Kingdom.
Decreasing (5):France, Italy, Luxembourg (with qualifications), Netherlands, Ukraine.
A mixed picture (5):Greece, Romania, Sweden, Switzerland, Norway (qualified).
Static (11):
Armenia, Croatia, Cyprus, Estonia, Finland, Germany (but qualified), Hungary, Iceland, Latvia, Liechtenstein, Turkey.
In addition, a further group (4) stated the position to be static on the basis that there can be no supervision/control on grounds of expediency in circumstances where the law permits control only on grounds of legality: Bulgaria, Czech Republic, Slovakia, Slovenia. This response reflects the conceptual and terminological division which permeates this aspect of Charter analysis. Respondents on behalf of those countries which have inherited the formal structures of tutelage (on the French model) and supervision inevitably react differently to Art 8 issues from those countries whose tradition may have been quite different. Functionally, very similar factors may govern the overall central-local relationship but it is difficult to capture the essence of this relationship in terms of language and institutions common to all.
36. It may also be useful, in this section on general trends, to be reminded that there are, in some countries, developments in central-local relations which, whilst not directly included within the areas of either ‘regional control’ or ‘best value’, are nevertheless of significance. A good example might be Sweden where neither of those two specific features is of importance, where the general conclusion in the questionnaire return was that central supervision and control was producing a mixed picture or slightly increasing, but a number of significant recent developments are recorded. There are, in particular, initiatives on the part of central government which may, under the leadership of a minister with combined responsibilities for both state administration and local self-government, lead to a more integrated approach to the assignment of responsibilities and supervision. This may certainly have consequences for local autonomy.
37. An inquiry of this sort produces two broad outcomes. One is the content of the individual reports from the experts of the Group of Independent Experts. It is impossible for all the material in those individual contributions to be included in this general report but the separate country reports stand as important contributions to the wider picture.
38. The second outcome, however, is the general conclusions which may be elicited from the individual country reports. In addition to soliciting answers to some more general questions, the inquiry sought comments on two specific aspects. One of these - the impact of the creation of an intermediate layer of regional elected government - produced (in section C above) some fairly clear results. The actual incidence of such structural change was quite limited but, based largely on the experience of Spain and Belgium but also on that of the United Kingdom (Scotland) and Greece, it seems clear that the apprehensions about the consequences for local self-government were borne out. The specific effects will vary according to circumstances and over time but there seems little doubt that new regional-level governments with legislative powers may seek to expand their own activities at the expense of local government. This will not, however, be confined to matters of ‘supervision’, narrowly so called. The influence of regional authority may also be expressed in the redefinition of the statutory powers of local government, in the control of funding arrangements for local authorities, and in local government reorganisation and mandatory cooperation between local authorities. What is also interesting (but probably unsurprising) is that the same questions about regional-level government prompted some similar answers on behalf of the longer established federal states. In Austria, Germany and Switzerland, the approach of Länder and cantons to local self-government shows some of the same trends. Although this is a technical rather than a political report, it should be apparent that, for the Congress - an organisation which combines the interests of both regions and local authorities - there are lessons to be learned, or at least cautionary warnings to be heeded, about relationships between the two levels. It may be a pointer to the need for some rather more sustained and systematic research. Intergovernmental relations of this sort may be a feature of only a minority of countries so far but the possibility of regionalisation is on the agenda of many others and it is important that the probable consequences of such reforms be understood. There should be no automatic assumption that ‘zero sum’ subsidiarity necessarily operates here - that additional autonomy at one level can be achieved only at the cost of reduced autonomy at another - but the warning signs should be heeded.
39. The other specific line of questions related to controls over local government which might result from the pursuit of ‘best value’ or similar initiatives by central (or regional) governments. Here the conclusions to be drawn are less clear. It is an area where questions of general application are more difficult to put and where comparative conclusions are more difficult to draw17. The terminology as well as the national institutions of supervision and control vary very widely, as, of course, does the range in the relative size and power of local authorities. No doubt, at the most general level, concerns about the threats to local autonomy from central governments which are reflected in the articles of the European Charter are of common application. The more specific concerns will, however, differ and much will depend on the particular mix of national controls over the size of local authorities, their competences, their funding and then the level of ‘administrative’ controls which may be exerted either by central government itself or by semi-autonomous bodies. Certainly many of the national expert responses reflected a natural reluctance to disengage any enquiry into the means of trying to ensure ‘best value’ in local government by audit or other mechanisms from the broader funding relationship between central and local government.
40. From the different responses submitted, however, it does seem possible to conclude that, despite the vesting of primary responsibility for their efficient organisation and delivery of services in the local authorities themselves, central governments are also demonstrating concerns across a wider range of countries about efficiency in public administration including local government. These may derive from obligations to meet national or European financial targets (and balanced budgets) or they may derive from more policy-based concerns about equality of treatment of citizens but, whatever their origin, they come to be reflected in measures to ensure the monitoring of local authority efficiency. 41. It may be that Europe and conditions in individual countries in Europe have changed greatly during the Charter period from 1985 to 2006 but this has not removed the inherent tensions which exist between the pressures of centralisation and the goals of local autonomy. Nor, as is evident from the range of experiences reflected in this report, is this a feature confined to those countries where local authorities have been historically weak. Stronger local authorities tend to invite stronger supervision and control. It seems certain that the results of this necessarily limited inquiry will not be the last word in a rapidly moving field. There will be a need to return to it with a broader programme of wider ranging
“New forms of supervision and control”
by Prof. Chris HIMSWORTH
Law School, University of Edinburgh (United Kingdom)
1. The European Charter of Local Self-Government rightly attaches much importance to the question of the administrative supervision of local authorities’ activities. Plainly, undue supervision and/or control by central (or regional) government would undermine the autonomy which the Charter seeks to protect. Article 8 of the Charter has the effect of curbing administrative supervision on “expediency” grounds (except in relation to functions delegated to local authorities), instead of confining supervision to ensuring compliance with the law and constitutional principles. The significance of the distinction between “own” and “delegated” functions varies from country to country and so too do the actual mechanisms of supervision and control. The current inquiry relates only to “own” functions.
2. The impact of administrative supervision and control was the subject of a report in 1996 (CPL (3)7 Rapporteur: Georgio de Sabbata), itself based on a substantial research report by Alain Delcamp. That report provided an excellent taxonomy of supervision and control and the importance of the Article 8 standards. It included an analysis of forms of financial supervision. Overall, the report concluded that expediency supervision and control was on the decline across Europe.
3. It may reasonably be assumed that this trend noted in the de Sabbata/Delcamp report has continued. Increasing sensitivity to the general standards of local authority autonomy has almost certainly produced a reduced level of central government intrusion. It may have become more usual for the activities of local authorities to be subject to systematic forms of monitoring and supervision but these will, in most cases, be processes which are internal to local authorities themselves and undertaken to meet self-imposed standards. They will not normally involve the imposition of any externally-imposed controls.
4. There may, however, be some reasons for concern that newer forms of supervision and control are emerging. Paradoxically this may be the result of a general strengthening rather than a weakening of local or regional autonomy. Thus, it may be that, because more substantial functions have been conferred on local authorities, there is a greater central concern about the efficient (and, to a degree, uniform) delivery of services to citizens and a perceived need for greater supervision and control as a result. This may include additional financial controls introduced for the purpose of influencing local policy decisions or forms of centrally-driven ‘best-value’ supervision (or audit) with policy consequences. Equally, an expansion of the role of regional government between the central and local levels may result in an expansion of expediency controls by regional governments (perhaps seeking an expansion of their policy space) over local authorities. There may, in addition, be quite separate reasons in some countries for the growth of new forms of supervision and control that this questionnaire is intended to monitor so that, as a result, some general conclusions may be drawn.
5. As mentioned, this is an exercise relating to expediency rather than ‘legality’ supervision and control. There may sometimes, however, be reasons for including control by courts within the analysis, either because (exceptionally) courts are given powers which have an expediency or ‘merits’ element to them or because the courts are used to enforce expediency-based controls imposed by others. The same might be true of the operation of Courts of Auditors.
6. Because of the particular focus of this enquiry, the questionnaire has three special characteristics:
(a) The questions have to be rather more open-ended and non-specific than usual. The newer forms of supervision and control may take quite different forms in different countries. The questions are, at some points, ‘hooks’ which are fishing for relevant responses in the general area. One of the attractions of the general report may be that it enables many interesting country-specific issues to be brought to light. Lateral thinking (within reasonable bounds) may be helpful!
(b) The questionnaire aims not to obtain a snapshot of national circumstances frozen at a particular moment but rather an understanding of a position changing over time. We should be aiming to report not on the specific circumstances of the present but on an interpretation of trends and the reasons for them. For this reason, please make use, where possible, of relevant analysis and recommendations contained in Congress monitoring reports and resolutions applicable to your country. Please incorporate these for the purpose of contributing to your own responses, whether or not you agree with them (please state) and whether or not circumstances have changed (in one direction or another) since the date of the report or resolution.
(c) Because trends may vary substantially from one country to another and may indeed be non-existent in some, the extent of the response required is expected to vary considerably. There may be much more to report on some countries than on others. It is important, however, for the validity of the conclusions ultimately to be drawn that there is a comprehensive report by all national experts. If short negative responses are appropriate, please make them!
NAME OF COUNTRY: … 2.
NAME(S) OF RESPONDENT(S): … 3.
DATE: … 4.
(a) DATE(S) OF LAST RELEVANT CONGRESS REPORT(S) AND RESOLUTION(S): …
(b) COMMENTS/RECOMMENDATIONS ON EXPEDIENCY CONTROLS.Please set out in full or précis. More importantly, please set out your own views on the comments/recommendations.
GENERAL SITUATION 18
(a) Is it your view that supervision and control by central or regional authorities on grounds of expediency is (i) increasing) (ii) decreasing (iii) producing a mixed picture or (iv) static?
(b) Please explain.
(c) If expediency control is decreasing, is this because controls are increasingly being undertaken by local authorities themselves?
6. OLD OR NEW FORMS OF SUPERVISION AND CONTROL
(a) If your answers to Q5 reflect a situation of increasing supervision/control, is this the result of (i) increased or more intensive use of ‘older’/long-standing measures (ii) the introduction of ‘new’/recently-introduced measures or (iii) a mixture.
(b) Please explain
NEW FORMS OF SUPERVISION AND CONTROL
(a) If your answers to Q6 reflect a situation of increasing use of ‘new’/recently-introduced measures, is this the result, in whole or in part, of (i) the introduction of a new or strengthened tier of regional government (ii) the introduction of new forms of ‘best-value’ supervision (or audit) or (iii) other developments, which might, for example, include arrangements for local government finance (including loans or controls over capital expenditure) which may incorporate a measure of ‘expediency’ control.
SUPERVISION AND CONTROL BY REGIONAL GOVERNMENTS
(a) If your answers to Q7 refer to ‘regional governments’ as a cause of increased supervision/control, please explain what new forms of expediency control have been introduced.
(b) Why have regional governments introduced this supervision/control?
(c) What effects are the measures having for local autonomy?
(d) Are the measures and effects likely to increase, to remain as they are, decrease over time?
(e) Do the measures and effects vary from one region to another?
(g) Please add any other comments.
‘BEST VALUE’/EFFICIENCY SUPERVISION AND CONTROL
(a) If your answers to Q7, refer to ‘best value’ supervision and controls, please explain by means of a brief account of the relevant central/regional powers.
(b) What authorities carry out the supervision/control? Are they independent of central/regional government?
(c) What is the purpose of the controls? Efficiency? Protecting the use of central/regional financial grants? Ensuring a measure of uniformity of service provision across the country or region?
(d) What powers do the supervising authorities have? To report (whether to local authorities or central/regional governments or both)? To make recommendations? To enforce recommendations (whether directly or indirectly through the intervention of some other authority)?
(e) What is the impact of these measures on local autonomy?
(f) Is that impact likely to increase, decrease, or remain the same over time?
10. ‘OTHER’ FORMS OF ‘NEW’ SUPERVISION/CONTROL
(a) If your answers to Q7 refer to ‘other developments’ as the cause of increased supervision/control, please explain what these are.
(b) Please explain their impact on local autonomy and whether, and for what reason, this impact may be expected to increase or decrease over time.
Please add any other comments which might further illuminate your earlier answers and which might assist the interpretation of the data and analysis you have supplied.
If there are any constitutional or general legislative provisions which might assist in understanding the situation, please set these out below.
1 See, for instance, in relation to the UK in 1998.2 Rapporteur B. Halvarsson (Professor D. Schefold, consultant) and Rec 131 (2003).3 Naxchivan does function as an autonomous territory but there are no data on any specific consequences for central-local relations.4 But NB with some critical scrutiny of controls applied not by an elected tier of regional government but by ‘state’ governors.5 But, like Estonia, with suggestions of interventions (in the case of Georgia, politically inspired) by governors. 6 But see below.7 Strong regional government is achieved only by the deconcentration of state authority to governors - although there has been occasional experimentation with other regional bodies eg in SE Anatolia where planning powers were transferred to the South Anatolian Regional Development Administration - a transfer unsuccessfully challenged in the Constitutional Court in 1989. 8 See also below under ‘best value’.9 Italy is another country which has undergone a form of devolution, but apparently without adverse consequences for local government.10 In Wales (and Greater London) regionalisation is only “administrative” which does create problems of inter-authority relationships of its own. In Northern Ireland, legislative devolution has not yet been fully implemented.11 The UK (CG(5)7 Part II) and Cyprus (CPL(8)3 Part II).12 But see below.13 Although this is in the context of a politically driven relationship which leaves local authorities under the strong control of central government.14 But see below.15 But see the new forms of control introduced at the cantonal level - above.16 The Commission is also responsible for procedures of much longer standing for the audit of local authority accounts on grounds of legality, compliance with accounting rules and 3Es ‘best value’. Such audit has not itself been free from controversy and has attracted criticism on the grounds of intrusion into the autonomy of authorities – a situation paralleled also in audit law in Cyprus.17 It is interesting to note at this point that, in recent (2005) comparative surveys undertaken by CDLR (the Council of Europe Steering Committee on Local and Regional Democracy) into local authority practice in respect of accounting rules, internal audit and performance management, quite wide variations in national practice were discovered. This was especially true of the surveys of internal audit and performance management where there were wide ranges of practice in the sophistication of the systems of monitoring established and in the extent to which they were centrally imposed. In parallel with our own study, it was revealed that the UK is the country with the most developed system of the use of indicators in performance management and of internal and external audit. See CDLR(2005)42 and 43.18 The general questions are included at this stage, rather than at the end, because they lead directly to the questions which follow.