Local Government Reform in Denmark

1. Local Government Reform in Denmark Nordic and Baltic States’ Conference 12 – 13 June 2006 in Laulasmaa, Estonia Jann Larsen, Legal Counsellor, Ministry of the Interior and Health

2. Reform in brief Local government reform • From 14 counties to 5 regions • Regions will have a population of 0.6-1.6 million inhabitants • Regions will primarily be in charge of health services • Regions will lose the right to impose taxes • Local authorities and central government will face new tasks • From 271 to 98 local authorities • An average new local authority will have a population of slightly more than 55,000 inhabitants

3. Structural reform debate in Denmark - timeline Local government reform The Danish Government publishes its policy package Appointment of the commission on administrative structure Conclusion of political agreement Commission releases its report Report is submitted for consultation Political negotiations Passing of bills October 2002 End of June 2004 January 2004 Middle of June 2005 May – end of June 2004 End of April 2004 January-April 2004

4. A simple and efficient public sector Better services at unchanged tax levels A better health service Clear lines of responsibility and elimination of grey areas Improved citizen services with less bureaucracy More citizen involvement and improved participatory democracy Local government reform Objective of local government reform

5. Local government reform Reform implementation Three main elements: • Geography – a new local-authority map • Task allocation – local authorities – regions – central government • Finances – funding and equalisation reform

6. Local government reform Timeline 1 January 2007: The reform comes into force November 2005: elections to new local and regional councils Legislation: Division and tasks Legislation: Funding and Equalisation Geography Local process New local and regional councils Local preparation for the reform Existing local and county councils 2006 2005 2004 2007

7. Local government reform Division of local authorities Ensuring sustainability • The target was local authorities with a population of 30,000 inhabitants • Local authorities with a minimum population of 20,000 inhabitants are acceptable • A specific scheme applies to islands • Local authorities with a population of less than 20,000 inhabitants must: • merge into new local authorities of at least 20,000 inhabitants or • enter into binding partnerships with neighbouring local authorities to solve new local as well as existing tasks related to the new tasks to be performed – the ‘loophole’!

8. Local government reform Division of local authorities Controlled voluntary process • Second half of 2004 – local process • 1 January 2005 – local authorities submitted their requests for future local-authority formation • 3 March 2005 – broad political agreement on the division of local authorities as at 1 January 2007

9. n Region Greater Copenhagen Region North Jutland 577,005 n Region Central Jutland Region Greater Copenhagen 1,212,988 1,631,537 n Region Sealand 805,954 n n Region South Denmark 1,183,823 Local government reform The new regions

10. Local government reform The new local authorities

11. Local government reform Political level Current number of local politicians: • 357 directly elected politicians in the existing 13 county councils • 4,597 directly elected politicians in the existing local councils, including the City Council of Copenhagen and the Regional Council of Bornholm Future number of local politicians: • 205 directly elected politicians in the coming regions • 2,520 directly elected politicians in the coming local authorities

12. Local government reform Task allocation – legislation package • 50 bills related to task allocation and geography send into public hearing in December 2004 – 2.300 answers • The 50 bills introduced in the Danish parliament in February 2005 • All bills passed in June 2005 after 1.769 questions and answers • 29 bills passed by a broad majority of votes • 21 bills passed by the parties in Government (the Danish Liberal Party and the Danish Conservative Party) and the Danish People’s Party

13. Local government reform Task allocation – local authorities • Citizens’ access point to the public sector • Responsibility for allocating and funding all social offers • Special training and education to be concentrated in the local authorities • Larger role in health care (part funding) • Larger role in unified employment initiatives • More responsibility for physical planning in local authorities • Business services • More responsibility for cultural offers • More responsibility for traffic – roads and public transport

14. Local government reform Task allocation - regions • Hospitals service, national health service and psychiatric treatment • Regional development plans as a vision and a framework for development in the individual region • Establishment of transport companies • Operation of specialised social institutions and certain institutions providing special training and education

15. Local government reform Regional funding sources Regional funding is divided into three separate elements: Health, other tasks as well as social services and specialised training and education • Health: • block grants (generally central-government contributions) (about 75%) • central-government contributions depending on activity (a maximum of 5%) • local-authority contributions to fund the health service (about 20% - partly depending on activity, partly depending on the number of inhabitants) • Other tasks • development contributions per capita, collectable by the local authorities • Local-authority payments for operation of specialised social and educational institutions

16. Local government reform Task allocation – central government • Tax assessment • Collection of public debt • Upper secondary schooling • Certain environmental and physical planning tasks • Certain roads • Health – special planning