Across most members of the OECD, the reform of local government is a topical issue, particularly given the need to re-balance budgets, address service efficiencies and enhance the quality of public services. In Ireland (population 4.5m approx), much of the process is being delivered within the context of a comprehensive spending review and the international support package from the IMF/ECB/EC. Other countries are also being driven by external economic conditions but have the freedom to focus on local and regional reform as a part of a general public service reform process. This is very much the case in Finland (population 5.3 million approx), traditionally the most autonomous of European countries. Unlike Ireland, which has had a history of trying, if not always succeeding, to limit local government to a relatively small range of functions, local government in Finland has long been at the heart of public policy. In such a role the system, whilst subject to overview by central government, remained largely unchanged structurally until recent years where moves to merge smaller authorities and to re-configure their financing and services has come to the fore.
Such changes are, of course, such that even with re-configuration, the system remains the principal means through which citizen focused services are delivered. The current public service system is centred on the remaining 336 municipalities with an average of 31 elected members, a drop of 117 authorities since 1997. The system therefore services an average of 16,000 inhabitants in contrast to Ireland, where 34 county and city authorities serve an average of over 131,000. Both countries’ average figures are, of course, somewhat skewed by the impact of both Dublin City and Helsinki.
Nonetheless, it does demonstrate that even with both cities included, there is a much lower average population in the already merged local authority system in Finland. In fact in Finland there are 81 local authorities with less than 2,000 inhabitants, and 173 with 2,000–6,000 inhabitants delivering services broadly similar to the bigger authorities such as those around the capital. How this is done is simple. The delivery of services which can gain from efficiencies of scale are facilitated through municipalities setting up joint delivery arrangements rather than expecting central government to do it for them. The fact that the services of the municipalities are largely self resourced through local income taxation drives the local political process towards making such efficiencies. In Ireland there is no such driver, particularly following the abolishment of local domestic property charges.
Of some significance therefore is that local authorities, as the principal democratic tier in Finland, have been retained to deliver or to facilitate citizen based services under the policy direction of the State but with the autonomy to determine such delivery having regard to their own locational context. Total public service spending in Finland in 2009 amounted to €96 Billion, 41% (€39 billion) of which was spent by the local government system. The authorities provide:
• primary care, specialist care and dental care,
• child day-care, welfare for the aged and the disabled, and a wide range of other social services,
• the country’s comprehensive and upper secondary schools, vocational institutes and polytechnics,
• adult education, art classes, cultural and recreational services, and run libraries,
• water and energy supply, waste management, street and road maintenance and environmental protection,
• develop and support public transport,
• services to promote commerce and employment in their area,
• supervision of land use and construction in their area, and
• a healthy living environment.
In undertaking the above roles they employ some 424,000 people, 80% of whom are female, representing 19% of the total labour force. In Ireland, by way of contrast, local government spent €8.5billion and employed just over 32,000 people in 2010 representing less than 2% of the workforce.
Interestingly and notwithstanding the serious re-structuring of the Finnish economy in the 1990’s, the move towards merging of the smaller local authorities only commenced in 2005 under the leadership of the Minister for Regional and Municipal Affairs. On an agreed basis with the Association of Finnish Local and Regional Authorities and the opposition in national parliament, the reform process commenced with a 2020 deadline for completion. Principal among the reforms is a focus on efficiencies through greater co-operation between municipal government and the State, rather than on having a concentration on reducing numbers. The focus is to improve effectiveness and efficiency rather than using scacre resources on re-structuring organisations. A point, perhaps, worth noting in the Irish context.
Also of interest is that the merging that does take place has a clear regard for the renewal of the local economy. In the process the authorities under-going renewal must prepare an implementation plan that sets out how the process is to be given effect. This includes:
• Setting strategic goals including evidence-based analysis e.g. population developments, the need for services, and of the business and urban structure in 2015 and 2025.
• Development of viability, business and employment, land use and housing, transportation and passenger traffic.
• Safeguarding the economy, development of expenditure and income, arranging real and other property, proposal for balancing the economy.
• Personnel development, ensuring competence, training, preparations for retirements, availability of new personnel.
• Changes in administrative structures and in municipal boundaries, establishment of partnership areas with neighbouring local authorities, forming larger catchment areas.
• Coverage of the service network, availability of services, productivity and means of production, more efficient service processes, utilisation of technology.
• Organisation, implementation stages, responsibilities of the local authority and partnership local authorities, follow-up, reports, assessment.
The renewal of local political leadership is also a key concern.
There is much to admire about the Finnish system. The focus on better public services connected to the citizen at local level is particularly significant. In part this explains why Finland has one of the better quality of life designations along with a successful PISA education ranking, a high rate of entrepreneurialism and patent registration. The health care system also seems to perform well.
The relationship between service provision and the means to generate income accountably at local level is also of interest. Most notably however, is the lesson that bigger may not be better, particularly if the link between accountability and responsibility is further eroded.
Further information on local government in Finland.
