Impact of legislation on ATH capacity: does adherence to formal norms really create prosperous communities?

When initiating the formation of new amalgamated territorial communities, the question of their capacity is always raised. Ukrainian legislation defines community capacity as “the ability, independently or through appropriate local governments, to provide an appropriate level of service delivery, in particular in the fields of education, culture, health, social protection, housing and communal services, taking into account human resources, financial support and development. infrastructure of the relevant administrative-territorial unit “.

The concept of “capacity” has been used since the very beginning of the decentralization reform in 2014 in the Concept of reforming local self-governance and territorial organization of power in Ukraine. Definitions of the term were not provided in it, but were based on the opposite:

the reason for the reform was the inability of communities to exercise their own and delegated powers in the areas of public service delivery.

How is community capacity determined?

The regional state administrations, the Cabinet of Ministers and the communities themselves, which have voluntarily decided to amalgamate, have the authority to recognize communities as capable. The Regional State Administration develops and approves a draft long-term plan of the region, which is later approved by the Cabinet of Ministers. Communities can be involved in the formation of a long-term plan, passports of affluent communities, in their competence to resolve issues of voluntary amalgamation or voluntary amalgamation to an existing community, as well as the creation of local governments. The process of forming affluent communities is given in the Methodology of forming capable territorial communities. And, it would seem, this is a certain algorithm: first a draft prospective plan is developed and approved, then it is approved by the Cabinet of Ministers, then communities voluntarily amalgamate and create their own local governments.

But, as it turns out, there are many cases of creating communities outside the long-term plan. For example, in Kharkiv region at the end of 2019, the first local elections were held for 4 communities, none of which existed as separate entities in the long-term plan of the region at the time of the election. Four days before the election, three of them appear in the plan, and the fourth is still missing. Although a budget for next year formed on the basis of a long-term plan

Indseparability of the territory as a requirement of a capable territorial community

An important factor in determining a community’s capacity is to delineate the accessibility area of ​​its potential administrative center. The Methodology of forming capable territorial communities states the following: the distance from the potential center to the community with a population of more than 10% of the total population of ATH should not exceed 20 km (or in emergencies the time of ambulance or fire should not exceed 30 minutes). The territory of the community should be inseparable, created within one region and one district. If a community is amalgamated within adjacent districts, the boundaries of districts are shifted in favor of the district where the center of the future ATH is located.

However, the requirement for distance from a potential center to remote settlements does not meet the criteria for a preliminary assessment of the level of capacity of local communities. On a scale where 1.5 is a low level of capacity and 5 is a high level of capacity, the larger area that the future community will occupy has a larger numerical value when counting. That is, according to the Methodology, in order to achieve a higher level of capacity, the community must be larger than 400 square kilometers, but at the same time the requirements for a 20-kilometer accessibility zone of its center do not disappear.

There cannot be another territorial community within the amalgamated territorial community, which has its own body of local self-governance. This point, as proved in practice, can be interpreted in at least two different ways.

The first interpretation is that an ATH cannot include another community that has (and will have) a local government after its inclusion. In itself, such an interpretation is limited by the impossibility of the simultaneous existence of two authorities of the same level in the same territory.

The second interpretation may be the impossibility of “surrounding” one community with another. Then some of the already created ATHs grossly violate the law. A similar case of double interpretation existed before the elections to the Sukhopolovyanska ATH in the Chernihiv region, although the newly formed community did not surround the city of Pryluky on all sides. But, obviously, the ban on “siege” by one community of another could apply to such cases only in the case of legal consolidation of a self-governing community within another.

If we ignore the second interpretation of this norm, the location of one community within another can essentially violate the norm of continuity of community territories. However, this is possible only if the inner community is amalgamated or plans to amalgamate with other communities outside the one that “surrounded” it. In the following table, we have considered only those communities that are disruptive by the location between their parts of other communities, not including those that are disruptive for natural and geographical reasons.

Therefore, we see that the conditions for the formation of a capable ATH are often violated in practice. And this is not surprising, because the quantitative indicators are not adapted to the realities of Ukraine. Communities in some western regions do not meet the conditions only because of the difficult roads. Mykolaiv and Dnipropetrovsk regions are leaders among violators due to poor quality roads, which make it impossible to transport from the center of ATH to remote villages in less than 30 minutes.
Settlements are not located close to each other, so there is a need to form a capable community in large areas, which complicates compliance with standards. It turns out that for objective reasons, only the smallest or most infrastructurally developed areas follow the principles of community formation.

The fragmentation of the territory of a community and the surrounding of one community by another, on the contrary, facilitates cooperation between them within the framework of the relevant Law. In general, as the comparison of data showed, the fragmented territory of a community or the surrounding of one community by another only in isolated cases correlates with the violation of the norm on the distance of settlements from the administrative center more than 20 km. Therefore, this is not an essential problem for the creation of ATH.

What does the Poland experience show us?

Poland took the first steps of decentralization in the 1990s. The algorithm for creating “gminas” in Poland (analogous to our amalgamated territorial communities) is similar to the Ukrainian one: the council of the future gmina must submit a request to the minister responsible for public administration; locals are also consulted. It is possible to create gminas in two neighboring voivodeships (unlike in Ukraine, where unification is possible only within one region) with the only condition being to change the boundaries of voivodeships and powiats according to the new boundaries of gminas.

The Council of Ministers of Poland has more leverage in the creation of the commune than the executive branch in Ukraine. On its own initiative, the Council of Ministers may establish a new unit of local self-government. In general, there are very few examples of “bottom-up” integration in Europe. Perhaps this is the specific difference between the contours of communities in Poland, which are almost identical from gmina to gmina, and the contours of Ukrainian communities, which are visually similar to the new type of application of gerrymandering.

The issue of the capacity of communities is also not acute in Polish legislation. More attention is paid to cultural and ethnographic uniformity than to financial efficiency.

Cability or dependence?

As you may have guessed, the very methodology of forming capable territorial communities has nothing to do with the capacity of the community in the conventional sense. Surprisingly, the document, which seems to deal only with the economic foundations of the ATH, mentions mostly geographical and, at best, infrastructural features that the future community must adhere to. But, as we found out, many communities exist without these requirements.

The only economic factors that formed the basis of the criteria — the tax capacity index and the share of local taxes and fees in the community budget revenues — are not administered by the community authorities. Therefore, the community cannot purposefully influence the growth of these indicators.

The main question facing a new community is: whether after amalgamation it can provide for itself at a more dignified level than before?

If the distance between the center and a large community within the ATH exceeds 20 km, but it has enough resources to open several more ambulance and firehouse stations in the most remote corners – what is the difference, what is the distance between them? If there are less than 250 preschool children in the ATH administrative center, but there are enough funds to maintain schools and kindergartens in all settlements of the community that need it, does the number of children in the center matter? All these issues can be solved only by achieving financial capacity. Such conditions can be created through new funding channels, including, in particular, business activities in the ATH.

The “Decentralization” portal provides general information on the performance of ATH budgets in each region several times a year. We’ve decided to test the effectiveness of the created ATHs, namely the growth rate of the budgets of those ATHs that entered the “first wave” of decentralization reform. We will take into account the budget execution data for the same month before the creation of the ATH, for the year and as of September 2019.

As it turns out, in the vast majority of communities, during the three years of their existence, the amount of subsidies has only increased, and the revenues of the general fund of ATH in 14 of 23 regions have significantly decreased.

Only the communities of Chernihiv, Dnipropetrovsk and Poltava regions have a reverse subsidy, which is directed in the opposite direction — from the local budget to the state. The largest component of subsidies in the income of ATH Ivano-Frankivsk region — 46%. Such a high level of subsidies in most communities raises the question: “Are communities really capable, or rather dependent on government subsidies?”

Among the communities submitted in the “first wave” there are also violators of the norms enshrined in the legislation: there are 15.4% of such communities. But there is no correlation between the level of subsidies for community budgets and compliance with the rules of forming a capable amalgamated territorial community. Therefore, it proves once again that the norms laid down in the Methodology can only slightly affect the real potential of the community.