Project to restructure municipalities and services

1. Project to restructure municipalities and services

2. Challenges facing the municipalities by the year 2015 Inter-municipal cooperation (region, province, extended region etc.) Changes in age structure: ageing, retirement, birth rate Change in demand for services Immigration Migration, Population trends Other internal structural factors: availability of labour etc. Reassignment of duties EU integration Tax pressures/ financing problems Changes in financing Changes in job structure/ regional development Democracy deficiency Municipal border

3. Planning V/2005 – V/2006 Decision making and execution VI/2006 –XII/2008 Execution I/2009 – XII/2011 Execution of the reform Planning phase II II-V/2006 Regional phase X/2005- II/2006 Preparation of the execution THE 2ND PHASE OF THE PROJECT Planning phase I V-IX/2005 Decision making In the Cabinet XI/2005-VI/2006 Sectoral reform legislation Framework legislation Control and evaluation phase organised by the Ministry VIII/2006 - XII/2011 Development phase organised by Association of Finnish Local and Regional Authorities VIII/2006-XII/2011 Project to restructure municipalities and services Draft timetable 2005 – 2011

4. Objectives of the Reform • a sound structural and financial basis for the services that municipalities are currently responsible for, • in order to secure the organisation and provision of such services in the future, • with due regard to the required standard of quality, effectiveness, availability, efficiency, and technological advancement.

5. Execution of the reform / 1 • 2006 • framework legislation in the parliament • detailed sectoral preparation based on the framework legislation, material to the new government programme • 2007 • framework legislation in force on January 1st 2007 • new government since April 2007 • legislation drafting in the ministries • municipalities prepare the execution of the reform • reports and execution plans from the municipalities in Aug / Dec 2007 • analysis concerning plans concluded, but the more profound analysis continues until 2009 • research programme begins

6. Execution of the reform / 2 • 2008 • new legislation on elections in force • municipalities and regions continue preparing the execution of the reform, analysis continues • autumn 2008: municipal elections according to the new legislation • 2009 • many new laws in to force • municipalities have to make final decisions concerning the execution • Government Report to the Parliament and Parliament’s conclusions • 2010-2011 • execution of the legislation • follow-up of the reform

7. Act on Restructuring Local Government and Services = ”The Framework Act” Act amending the Act on Local Authority Boundaries Act on amending the Asset Transfer Tax Act Legislation of the Reform: three components

8. Three Starting Points for Restructuring Municipalities and Services 1. The reform offers many different possibilities to the municipalities 2. The municipalities themselves lead the process for change In 2009 the Govt submits a report to Parliament evaluating progress of the reform and the needs for changes 3.

9. 5 § Forming a municipality and a partnership area 1 § Purpose 2 § Scope of application 3 § Relationship with regional divisions 4 § The means 10 § Report by the municipality and the plan for implemen- ting the reform 9 § Municipalities in particularly difficult financal situation 6 § Services requiring a large population base 8 § Tasks transferred from local to central government 7 § Planning obligation in certain urban areas 12 § Developing informations systems and focal service points 11 § Government policy towards municipalities; system of financing and transfers 13 § Status of personnel 14 § Government report 15 § Authorization to issue decrees on providing information 16 § Entry into force Act on Restructuring Local Government and Services

10. Create prerequisites for restructuring of local govt & services 1 § Purpose Improving manner in which services are produces & organized Strenghtening muni- pal & services structures Overhauling local govt financing & central govt transfers Reviewing division of tasks between central & local govt … so that the organization and production of services which are the responsibility of munipalities would be on a strong structural and financial basis The aim id to improve productivity, slow down the growth in local govt expenditure and create a sound basis for steering the services organized by municipalities Act on Restructuring Local Government and Services

11. Act on Restructuring Local Government and Services 1 § Purpose • To be considered when planning and implementing this Act: • availability, quality and financing of services in all parts of the country • fundamental rights and equality concerning access to services • operating prerequisites for self-government by a municipality´s residents • opportunities for a municipality´s residents to participate and influence matters

12. Act on Restructuring Local Government and Services 3 § Relationship with regional divisions Municipalities may, when drawing up reports and plans, deviate from… division into districts for specialized care for mentally handicapped division into districts for specialized medical care division into regional councils

13. Act on Restructuring Local Government and Services 4 § The means • Municipal structures are to • be strengthened: • merging municipalities • incorporating parts of some • municipalities into others • The goal is: • economically sustainable • well-funcioning • sound municipal structure • Service structures are to be • strenghtened: • by forming larger catch- • ment areas for services • which need a stronger • population basis • incresing cooperation • between municipalities • Operational productivity is • be improved: • by making organization • and production of municipal • services more efficient • by strenghtening the • operating prerequisites in • the Helsinki Metropolitan • Area and other built-up • regions with problematic • urban structures

14. Act on Restructuring Local Government and Services 5 § Forming a municipality & a partnership area Partnership area Municipality Commuting area or orther larger catchment area constituting a functional entity that has the necessary prerequi- sites in terms of economic and personnel resounces for assuming responsibility for organizing and financig services that has a joint municipal organ or is managed by a joint municipal board Population basis: Primary health care and closely linked social services must have a population basis of at least some 20 000 inh. In vocational basic education at least some 50 000 inh. • Deviations may be made from the prerequisites for a municipality or a partnership area laid down in subsections 3 and 4 if: • an archipelago environment or long distances make it impossible to establish larger catchment areas in the manner laid down in subsections 1 and 2; • they are necessary for safeguarding the language rights of the Finnish-speaking or Swedish-speaking residents; or • they are necessary for safeguarding the rights concerning the language and culture of the Sami people.

15. Act on Restructuring Local Government and Services 6 § Services requiring a large population base The joint municipal boards for specialized medical care specialized care for the mentally handicapped spcialized medical care other tasks given by the member municipalities

16. 7 § Planning obligation in certain urban regions TURKU, Aura, Kaarina, Lieto, Naantali, Raisio, Rusko and Vahto PORVOO, Askola, Myrskylä and Pernaja PORI, Luvia, Merikarvia, Nakkila, Noormarkku, Pomarkku, Siikainen and Ulvila HÄMEENLINNA, Hattula, Hauho, Janakkala, Kalvola, Lammi, Renko and Tuulos TAMPERE, Kangasala, Lempäälä, Nokia, Orivesi, Pirkkala, Vesilahti and Ylöjärvi LAHTI, Asikkala, Hollola, Hämeenkoski, Kärkölä, Nastola and Orimattila KOTKA, Hamina, Pyhtää and Ruotsinpyhtää LAPPEENRANTA, Joutseno, Lemi and Taipalsaari MIKKELI, Hirvensalmi and Ristiina KUOPIO, Karttula, Maaninka and Siilinjärvi JOENSUU, Kontiolahti, Liperi and Pyhäselkä JYVÄSKYLÄ, Jyväskylän mlk, Korpilahti, Laukaa, Muurame, Petäjävesi and Toivakka SEINÄJOKI, Ilmajoki, Lapua, Nurmo and Ylistaro VAASA, Isokyrö, Korsnäs, Laihia, Maksamaa, Maalahti, Mustasaari, Oravainen, Vähäkyrö and Vöyri KOKKOLA, Kruunupyy and Kälviä OULU, Hailuoto, Haukipudas, Kempele, Kiiminki, Liminka, Lumijoki, Muhos, Oulunsalo, Tyrnävä and Ylikiiminki HELSINKI, Espoo, Vantaa and Kauniainen 31.8.2007 a plan on better land use, housing & transportation & how to make better use of services across municipal boundaries Unless the municipalities decide unanimously that there is no need for such a plan

17. 9 § Municipalities in particularly diffficult economic financial situation Appointment of an assessment group possible as soon as this Act has come into force in case that the municipality´s economic indicators - are substantially and repeatedly below corresponding national indicators - in two successive years below limits laid down by Govt decree • 3 members in the assessment group: • one appointed by the MI • one appointed by the municipality • independent chair of the group appointed by the MI Assessment group submits proposal for securing the services Municial Council must discuss the proposals and decide MI shall decide on the need for special report for changing municial boundries

18. 10 § Report by the municipality and plan for implementation Municipality must by August 31st 2007submit to Govt a report on measures under 5 -6 § and implementation plan • The implementation plan must contain: • analysis of population and service requirements in the municipality for 2015 & 2025 • a municipal financial plan and, if impossible to cover the deficit during the planning period, and action programme • 3) a plan on how the municipality intends to apply the measures in 4 § • 4) a report on the coverage of the service network • 5) a plan on the organization of the main municipal functions and on the adequacy oand development of personnel resources

19. 11 § Govt municipal policy & system of financing and transfers The basic services programme shall be made a permanent part of statutory consultation procedure between central & local govt The system of local govt financing and central govt transfers to be overhauled with aim of making system simple & more transparent Municipal tax base to be strenghtened by transferring tax deductions form municial to state taxation Financing discouraging municipal mergers and coperation is to be eliminated

20. Present situation • The municipalities are ready with the planning of execution of the Framework Act • All 392 municipalities gave an explanation report and execution plan to the government by Aug 31st 2007, 42 merger municipalities by Dec 31st 2007 • Åland and Kainuu excluded • Helsinki metropolitan area and the 18 other urban regions made cooperation plans • Municipalities got feedback in Dec 2007 and in Feb 2008 (merger municipalities) • The urban regions had feedback in Apr 2008 • Government has underlined that all municipalities have to meet the criteria of Law by the Government report in 2009

21. Additional accounts and negotiations • In feedback 265 municipalities were asked to send additional accounts by the end of Feb 2008, negotiations launched with 14 municipalities, 69 municipalities’ plans were considered sufficient so far • 265 municipalities got feedback in June 2008 • In August 2008 new negotiations will start with 16 municipalities and with 2 partnership areas that do not yet have a plan to meet the criteria of the law and have less than 20 000 inhabitants • The 14 negotiations that were launched earlier have been finished and have been quite successful so far

22. Results so far I • A fast and exceptional progress made concerning municipal mergers: • In 2009 32 municipal mergers, 99 municipalities in them (67 municipalities less than at the moment) • In 2010 at least 1 merger, 2 municipalities • In 2011 at least 1 merger, 3 municipalities • After 2005 a total of 205 (from 416/2007) municipalities have taken part in merger negotiations - a much faster progress than originally expected

23. Municipal merger grants 2008-2012 • Amendments in the Act on Local Authority Boundaries as a part of the reform’s legislative entity • A more encouraging system for the municipalities • Better incentives for • multi-mergers • municipalities over 20 000 inhabitants • Supplementary grant for economically very weak municipalities • Full compensation for the possible reduction in central government transfers for five years • Highest grants in 2008-2009

24. Results so far II • Partnership areas • 276 municipalities plan to achieve the 20 000 population base by establishing a partnership area (responsible for primary health care and social services, 20 000 inh.) • This would lead to 62 partnership areas • 24 would administratively be joint municipal boards, and 34 have chosen”host-municipality-model” (joint municipal organ) • 8 of the areas function already, majority will start in the beginning of 2009

25. Results so far III • 220 municipalities have already made decisions on how they’ll meet the criteria of the population base (e.g.79,1 % of Finnish population lives in those municipalities) • There are still 40 municipalities that do not have clear plans to meet population base nor other criteria of the law • Focus has been more on structures (municipal and administrative) • So far the results concerning quality of services are minor

26. Planning of urban regions and results • Helsinki metropolitan area and other urban regions made plans on better land use, housing & transportation & how to make better use of services across municipal boundaries • 18 urban regions (16 + 2 voluntary) • Regions got feedback in April 2008 • Some of the regions have advanced in the implementation of the plans, but regional co-operation seems to be slow in some areas • The regions need support e.g. in renewing the service processes

27. Areas of urban region planning Centre, Framework Act (19) Centre, voluntary plans (2) Municipality, Framwork Act (74) Municipality, voluntary plans (48) Other municipalities (273) Tampere Tampere Tampere Tampere Tampere Tampere Tampere Tampere Tampere Lahti Lahti Lahti Lahti Lahti Lahti Lahti Lahti Lahti Kouvola Kouvola Kouvola Kouvola Kouvola Kouvola Kouvola Kouvola Kouvola Hämeenlinna Hämeenlinna Hämeenlinna Hämeenlinna Hämeenlinna Hämeenlinna Hämeenlinna Hämeenlinna Hämeenlinna Lohja Lohja Lohja Lohja Planning of urbanregions Oulu Oulu Oulu Oulu Oulu Oulu Oulu Oulu Oulu Kokkola Kokkola Kokkola Kokkola Kokkola Kokkola Kokkola Kokkola Kokkola Vaasa Vaasa Vaasa Vaasa Vaasa Vaasa Vaasa Vaasa Vaasa Kuopio Kuopio Kuopio Kuopio Kuopio Kuopio Kuopio Kuopio Kuopio Seinäjoki Seinäjoki Seinäjoki Seinäjoki Seinäjoki Seinäjoki Seinäjoki Seinäjoki Seinäjoki Joensuu Joensuu Joensuu Joensuu Joensuu Joensuu Joensuu Joensuu Joensuu Jyväskylä Jyväskylä Jyväskylä Jyväskylä Jyväskylä Jyväskylä Jyväskylä Jyväskylä Jyväskylä Mikkeli Mikkeli Mikkeli Mikkeli Mikkeli Mikkeli Mikkeli Mikkeli Mikkeli Lappeenranta Lappeenranta Lappeenranta Lappeenranta Lappeenranta Lappeenranta Lappeenranta Lappeenranta Lappeenranta Kotka Kotka Kotka Kotka Kotka Kotka Kotka Kotka Kotka Turku Turku Turku Turku Turku Turku Turku Turku Turku Lohja Porvoo Porvoo Porvoo Lohja Lohja Porvoo Porvoo Porvoo Lohja Lohja Porvoo Porvoo Porvoo Pääkaupunkiseutu Pääkaupunkiseutu Pääkaupunkiseutu Pääkaupunkiseutu Pääkaupunkiseutu Pääkaupunkiseutu Pääkaupunkiseutu Pääkaupunkiseutu Pääkaupunkiseutu SM/AHO/MH/4.9.2007

28. Analysis of the Reform • Reform is analysed continuously by cooperation of several ministries and the Association of Finnish Local and Regional Authorities • An external evaluation by University of Lapland (by Feb 28th 2009) • An extensive evaluation research programme coordinated by the Association (includes several universities) launched in 2008 • Government report to the parliament in 2009

29. Timetable • Objective: all municipalities have to meet the criteria by the Government report in 2009 • In June 2008 it was decided that all municipalities have to made mandatory decisions no later than 15th of March 2009 • In the report’s context an evaluation about possible legislatory changes