Decentralization

Section 1. Monitoring of the implementation of recommendations on reform priorities for 2020–05.2021

1. To strengthen the institutional capacities of the executive government. To supply the regional and district state administrations with the qualified personnel. To stabilize the middle management link. To define heads of city state administrations as civil servants and to appoint them based on the competition with rotation.

Not done

Staff turnover in the positions of heads of regional state administrations remains high. The appointment of the heads of city state administration (CSA) takes place without any competition.

However, on March 4, 2021, the Parliament adopted the draft law №4298 in the first reading, which provides for the new version of the law "On local state administrations". This project envisages the transformation of CSA heads into civil servants who are appointed to positions on a competitive basis.

If this bill is adopted and signed by the President of Ukraine, there is a chance to gradually form a professional system of training and promotion of senior civil servants, which should significantly strengthen the institutional capacity of executive bodies at the regional level.

2. To regulate the determination of the level of salaries of heads of public authorities and to approve a new net of salaries of employees of local self-government bodies.

Not done

The imbalance between the salaries of different categories of heads of public authorities and local governments remains excessively high. The share of local budget expenditures on management in territorial communities is in the range from 8 to more than 60% of local budget expenditures.

3. For the Parliament of Ukraine – to approve the new version of the laws of Ukraine "On local self-government in Ukraine", "On local state administrations" and "On the principles of administrative-territorial organization" in accordance with the new administrative-territorial structure and redistribution of powers between public authorities.

Not done

The new version of the Law “On Local State Administrations” was adopted in the first reading.

The draft Law “On the Procedure for Resolving Issues of Administrative and Territorial Organization” No.4664 of 28.01.2021 was registered. The subject of that latter is precisely the definition of the principles of administrative-territorial organization, and not just the procedure for resolving issues of administrative-territorial organization in Ukraine. However, the bill has a number of fundamental shortcomings that may delay its progress in parliament.

As for the new version of the Law “On Local Self-Government in Ukraine”, an incorrect strategy was chosen here, a lot of time was spent on the new law, but the bill itself was never registered. A decision was made to make fragmented changes to the law on local self-government

4. To adopt the Law on State Strategic Planning, which should remove contradictions in strategic planning carried out by different ministries and harmonize sectoral and spatial planning.

Not done

The draft law has not been submitted to the Parliament yet.

5. To restore the possibility of implementing national regional policy on the basis of strategic planning rather than manual allocation of funds and approve amendments to Article 24-1 of the Budgetary Code of Ukraine during March 2020.

Threats

There was a reduction in the State Fund for Regional Development with an increase in the size of the subvention for socio-economic development, which leads to the discreditation of the very idea of regional development planning and transparent financing of projects.

6. To complete the formation of a system of strategic planning documents - the National Development Strategy of Ukraine, the State Strategy for Regional Development, the General Scheme of Planning of the Territory of Ukraine, regional development strategies in 2020. However, to also account for the fact that there can be no plan without funding and no financing in the absence of a plan.

Partially done

The Parliament received the draft law №5323 “On Amendments to the Law of Ukraine “On Principles of State Regional Policy” from the Cabinet of Ministers of Ukraine. It establishes a hierarchy of planning documents - State Strategy for Regional Development, Regional Development Strategies and Development Strategies for the Territorial Communities.

The State Strategy for Regional Development for 2021-2027 has been approved.

The draft Law “On Peculiarities of Stimulating Regional Development” № 5649 was submitted to the Parliament for consideration.

7. Dialogue and dialogue once again. No policy will succeed if society does not understand it, unless various organized actors are involved in the discussions on policy documents. Therefore, broad policy discussions with entrepreneurs, the public, and academics, and experts should become a common practice for the Government, Parliament and the President of Ukraine.

Partially done

The work of the interdepartmental coordination commission on regional development has been resumed, an advisory body “Congress of Local and Regional Authorities” has been established under the President of Ukraine to improve the interaction between the executive authorities and local self-government bodies. However, these structures do not provide for the participation of other civil society organizations that take care of local self-government and regional development in their work.

The sectoral committee of the parliament involves public organizations and individual experts in the work on legislative acts.

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Section 2. The current major challenges in implementing the reform (at the time of monitoring)

The refusal to elect prefects together with the partisanship of local community councils led to a reduction in the number of prefects and their appointment on the basis of party quotas, rather than the will of the inhabitants of the settlements that joined new large communities. In fact, thousands of settlements are now deprived of representation in the territorial community council and do not have an elected prefect.

Some communities in rural areas are excessively large - more than 1.5-2 thousand square kilo, which complicates management, deprives large areas of representation in the local council, does not lead to community cohesion.

Deprivation of district councils of any powers and budgetary resources made it difficult to obtain a number of services in rural areas - public transport, social welfare bodies, sports schools, secondary health care facilities. At the same time, the law does not stipulate the obligation to allocate intergovernmental transfers between communities for the maintenance of such institutions.
A significant number of new districts have been created not in accordance with the methodology, but based on political motives, which will further complicate the coordination of the activities of territorial bodies of CEBs on the part the regional state administrations and reduce their institutional capacity.

The reduction of funds in the State Fund for Regional Development with an increase in the size of the subvention for socio-economic development leads to the discretisation of the very idea of regional development planning and transparent financing of projects.

The emergence of various initiatives that change the distribution of budget funds outside the plan and are not envisaged in the planning documents.
The lack of bylaws on the content of community area plans complicates the creation of a single integrated system of planning documentation and makes it impossible to control the quality of such documents.

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Section 3. Recommendations on reform priorities for 2021-2022 (next annual period, until URC 2022).

To complete the development of legislation in the field of administrative-territorial organization.

To solve the problem of representation in the local self-government bodies of territorial communities of the inhabitants of peripheral rural settlements through the introduction of the election of prefects, whose status may be different depending on the size of the settlement.

To the development of legislation to plan, implement, finance and monitor regional development.

To resolve the issue of exercising powers that are not implemented by territorial communities due to objective reasons, by district councils in accordance with the principle of subsidiarity.

To review the electoral system for elections of region, district, village, settlement, and city councils, in order to ensure fair representation of territorial communities and residents of peripheral territories in the relevant councils.
To develop the legislative system of administrative supervision over the legality of local self-government activities.
To adopt a law on the peculiarities of self-government, executive power and administrative structure in Kyiv.
To normalize the procedure for determining the cost of exercising delegated powers and, accordingly, the calculation of resources for their implementation.

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Decentralization

Sectoral brief “Decentralization”