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Publication - Research and analysis

Systems of local governance and how citizens participate: international review

Analyses local governance systems in seven case studies across the world, and how citizens are able to participate in local governance. The case studies are Denmark, England, Germany, New Zealand, Quebec, Scotland, and Uruguay.

83 page PDF

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83 page PDF

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Contents
Systems of local governance and how citizens participate: international review
2. Key themes from case studies

83 page PDF

640.8 kB

2. Key themes from case studies

This section considers what we can learn from looking across the case study profiles (Annex C). Table 1 below provides summary information for the case studies, across the following themes:

  • Historical development of governance
  • Key reforms in local governance
  • Current structure and function of local governance
  • Financial arrangements in local governance
  • Local democracy and politics
  • Citizen participation in local governance
  • The relationship between national and local governance

After Table 1, each theme is considered in more detail: comparisons are drawn between the case studies to identify where specific aspects of local governance arrangements are similar, and also where there are distinct differences.

Table 1: Comparative thematic summary across the case studies

Case study

Population (2020)

Historical development of governance

Key reforms in local governance

Current structure and function of local governance

Financial arrangements in local governance

Local democracy & politics

Citizen participation

DEN

5.8 million

Local governance largely unchanged from 19th century until reforms in 1970 and 2007.

1970 & 2007 Municipal amalgamation – larger and fewer municipalities.

Two levels: regions and municipalities. Standardisation of municipal size: average of 55,000 population.

Standardisation of municipal functions: all responsible for welfare services and administering benefits; also aspects of healthcare, environmental protection, water supply, culture and recreation.

Majority of municipal income from local taxation: primarily income tax, but also property and business tax.

Government grants make up about one quarter of municipal income.

Local fees and services account for less than a fifth of income.

Municipalities are governed by an elected council. Councillors elect a mayor and heads of council standing committees from among their number. The mayor is the head of the administration. The executive is the administration and the council committees.

Primary route through local civic, sports and cultural organisations.

Some limited use of service user boards at municipal level, some mandatory e.g. for schools/child-care but with little influence.

Little use of local referenda. This was first only advisory but is now legally binding but unused and no citizen initiation.

ENG

56.3 million

Major reforms in late 19th century, then largely unchanged until 1974, and further changes in 2000s.

1974 law to create a simplified, standard system of two-levels of governance.

Further reforms in 2000s led to more varied local governance.

A highly varied structure.

Two levels in much of the country: county and district councils.

In other areas, one level: the unitary authority.

A larger (third) level exists in some parts of the country: regional combined authority.

A smaller (fourth) level exists in some parts: parish (or town) councils.

Size of councils varies significantly.

Unitary authorities responsible for education, roads, transport, social care, housing, culture and leisure, planning and development. These are divided between county and district councils.

Majority of income from central government grant.

Local income: majority through property tax and also business tax, charges and fees.

Parish councils have unique unrestricted revenue raising power: raising a 'precept' on council tax.

Directly elected mayors lead 7/9 regional combined authorities.

Councillors are elected by first by the post. The large majority of county councils are led by single political parties, nationally aligned. The majority of district councils also have a single party in power, but there are more coalitions.

Varied, but not systematic or significant

Range of non-binding fora for statutory and voluntary consultation across health, housing, crime and disorder.

Local referenda required to approve voluntary neighbourhood plans on planning and development.

Some local experimentation in the use of deliberative approaches and low level use of participatory budgeting.

GER

83 million

Local governance largely unchanged from 19th century until 1960s reforms, and then on unification.

Trend of municipal amalgamation – larger and fewer municipalities.

Two levels at the area-state (Land) level: districts and municipalities.

Large variation in municipal size.

Variation in municipal functions: a 'mixed economy'. Functions delivered at different levels and inter-municipal cooperation common, particularly among the smaller municipalities.

Majority of income from area-state (Land) grants and taxes.

Primary local tax income from business tax.

Municipalities led by directly elected mayors with executive powers.

Municipal councils led by coalitions, including independent groups.

Significant use of legally binding local referenda, citizen initiated.

Discretionary participation activity focused on citizen 'voice'.

NZ

4.9 million

Local governance largely unchanged from 19th century until 1989 reforms.

Municipal amalgamation and rationalisation.

Two levels: regional councils and territorial authorities (rural district and city councils).

No significant role in welfare services or health.

Territorial/unitary authorities range in size from 1,415,550 residents (Auckland) to 600. The median resident population for territorial authorities is around 30,000 people.

Standardised responsibilities for territorial authorities including for roads, water and refuse, cultural and leisure services, local economic development.

No government block grant.

Majority of income from local property tax.

Also local fees and services.

Territorial authorities led by directly elected mayors, but with no executive powers.

Primary form of participation through local Community Boards, primarily advisory role.

Maori communities involved in co-governance over significant natural resources.

QBC

8.5 million

Mid 19th century structures broadly unchanged until reforms begin from 1960s.

From 1960s, amalgamated municipalities. In 2000s, a focus on urban amalgamation and new layer of metropolitan governance.

Recent reform to increase municipal powers in planning, housing and development.

Three levels: administrative regions, regional county municipalities and municipalities

Wide variation in municipal population size: from less than 2000 people to more than 100,000. Overall, large majority of municipalities have less than 10,000 population.

Large variation in functions between municipalities. Municipal cooperation through 'agglomeration councils' in some urban areas, but also some delegation of functions below municipalities to borough councils.

Majority of municipal income from local property and other taxes, and services.

Minority of income from provincial government grant.

Municipalities led by elected mayor, with some limited executive power.

There is a large number of registered municipal political parties which are not officially linked or integrated with provincial parties.

Elected neighbourhood councils in urban areas providing views on local services/issues.

Further devolution to Inuit local government in recognition of right to self-government.

SCOT

5.5 million

Local governance largely unchanged from 19th century until reforms in 1975 and 1996.

Municipal amalgamation and rationalisation, to a single level of governance in 1996.

Single level of 32 unitary authorities.

Large variation in local authority population (the smallest at just over 20,000 to the largest at over 600,000 residents) and geographic size. The majority serve over 100,000 people.

Standardisation of functional responsibilities including education, social care, culture and leisure services.

Over half of income from government grant.

Local income from business tax and property tax, each around a fifth.

No municipal mayors. National level political parties predominate in local politics, but independents also present. Councillors are elected by proportional representation. Most councils are led by coalition administrations or a minority party.

Local elected community councils to give community views, specifically on planning and development. Concerns about representativeness and lack of influence.

Growth in use of Participatory Budgeting for community decisions on allocation of relatively small local budgets.

Infrequent use of local advisory referenda.

UGY

3.5 million

Early 20th century reform programme established constitutional foundations of democracy, in a two-party state.

Military dictatorship
1973-1984.

Post 1984, diversification of political parties.

Municipalities formalised in 2010, decentralisation ongoing.

From 1990s, gradual constitutional and legal reform decentralising power to locally elected municipalities, and formalising citizen participation.

Two levels: departments and municipalities. There is an additional layer of sub-municipal governance in the capital city Montevideo.

Variation in coverage of municipalities: more present in urban areas and overall covering only 70% of the population. Mandatory for areas with population greater than 2000.

Broad set of municipal responsibilities, variably applied. Most share responsibility for lighting, waste collection and street cleaning, around half provide social care services, almost all local culture, sports and leisure services.

Majority of municipal income is direct from central government, the rest from budget allocations from departments.

Directly elected governors lead departments.

Municipalities led by elected mayor, as member of municipal Junta, with no executive power.

Local politics gradually emerging from historically strong national party direction, and influence of departmental governors.

Formal direct democracy a well-established tradition at national level. All constitutional reform subject to referenda and citizens can propose popular initiatives.

At municipal level, the practice of citizen participation still relatively immature as part of process of decentralisation.

Historical development of governance

Understanding the history and development of governance in each case study helps to show how significant that has been in shaping the governance systems over time and what is now in place. This historical influence can begin with the very origins of the nation state: how, and what, democratic structures or institutions are put in place; whether and how institutions, responsibilities and relationships are defined in law (or in the specific form of a constitution) or more through practice and convention; the relationship between, and the respective roles given to national and local government; the culture and tradition of how citizens participate in governance and how that affects expectations, and the concrete methods that enable them to take part beyond the ballot box.

In a number of the case studies, local governance arrangements established in the 19th century remained significantly unchanged until major reforms in the latter half of the 20th century. This was the case in Germany, Denmark and New Zealand where major reforms were undertaken in the 1960s, 1970s, and 1980s respectively. Although the timing of these changes are similar, the historical context in each country differs significantly. For example, governance in Germany is shaped by its formation as a state in the 19th century, the establishment of a federal constitution and creation of the area-state (Land) structure at the end of the second world war, and the unification of western and eastern Germany in 1990. Scotland's major reform of local governance took place in 1975 but was preceded by a rationalisation and reduction in the number of local authorities in the 1930s.

Quebec and Uruguay are examples that illustrate the predominance of national level considerations on the development of governance over most of the 20th century: in Quebec, this is the concern with independence from Canada; and in Uruguay, the predominance of a highly centralist state, before the beginnings of gradual decentralisation in the 21st century.

The governance systems in place today reflect a particular history and tradition that has shaped their development, and informed decisions taken about how they should evolve and adapt over time. This can be described as 'path dependency': that the options and thinking about possibilities for governance reform are at least influenced, and perhaps somewhat constrained, by current and historic governance arrangements.

Key reforms in local governance

There is an identifiable pattern in the key reforms of local governance across the case studies, largely initiated in the second half of the 20th century. These reforms tend to focus on amalgamating municipalities (and in some cases, also the higher regional level structure) to make fewer and larger units. In the main, this tends to be driven by considerations of efficiency in the delivery of services by municipalities. In Denmark, a central element of its reforms was creating a municipal structure of a scale capable of delivering the country's welfare system.

Scotland followed a similar trajectory with reforms in the 1970s, but exceptionally among the case studies, the reforms of 1996 created a single level of local governance which remains in place.

Reforms of local governance in Uruguay are a notable exception to this picture of municipal amalgamation across the case studies. Uruguay's governance was highly centralised until moves from 2010 to formalise municipal structures and decentralise powers to local elected councils.

There is also a specific focus on reforming arrangements in urban areas to create city-wide governance or larger regional units. This reflects increasing populations in cities, a focus on economic development across 'city regions', and a move for cities to compete internationally. As an illustration, this change in local governance can be seen in the capital cities of New Zealand and Uruguay. Auckland has more than a third of New Zealand's population and a similar proportion of the national economy. In 2010, eight local authorities were combined into a unitary council for the city. Montevideo in Uruguay also has around a third of the country's population. It has eight very large municipalities of 150,000-200,000 population; but there is also an additional level of governance below them which is not found in the rest of the country, 18 zonal community centres.

Current structure and function of local governance

At each level of governance there tend to be distinct responsibilities, finance arrangements, and structures. There are two levels in Germany, Denmark, Uruguay and New Zealand, which align to what we might describe in general as 'regional' and 'municipal' levels. The system of local governance in Quebec operates over three levels. These structural arrangements tend to apply uniformly across each individual country. Multi-level local governance arrangements operate in all the case studies except Scotland.[3]

In England, however, there is a varied and complex structure overall, that differs across the country. Some places have a unitary authority, and in others a two-level arrangement of county and district councils. There are also regional level structures in some parts (combined authorities), and sub-municipal structures in some parts (parish councils cover about a third, in mainly rural areas).

The size of geography, and the population served at each level can vary quite significantly within any single case study. For example, there is very wide variation in the size of municipality in Germany. The population served by municipalities in Quebec is from less than 2000 to more than 100,000 people; although most of them serve fewer than 10,000 people. Territorial and unitary authorities in New Zealand serve from 1,415,550 people (in Auckland) to 600. The average population for territorial authorities is a little above 60,000 but this is skewed by several very large councils. The median population for territorial authorities is around 30,000. Denmark is the exception in establishing arrangements that are closest to a 'one size fits all' standardised approach to local governance, where municipalities serve a population of 55,000 on average. The majority of local authorities in Scotland serve at least 100,000 people; they are much larger than most municipalities in the other case studies.

It is common to find that these levels are often combined into a single institution of governance in bigger cities, and are perhaps the most obvious sign of a more general pattern of differences in governance between rural and urban areas, common in all case studies.

It is striking that across many case studies, a range of arrangements are also in place in and around municipalities. We see the creation of what might be described as 'intermediary organisations' rooted in the democratic structures and processes that operate above and below the municipal level. For example in Germany, large municipalities have institutions at a level below them (called sub-municipal governance) so as to be closer to local communities. And smaller municipalities in Germany often enter into cooperative arrangements through more or less formalised groupings or institutions to deliver local services, particularly those of a more specialised nature or which could benefit from economies of scale. In Quebec, there are similar cooperative arrangements between municipalities, but established more formally. Responsibilities are shared across what are called municipal 'agglomerations' and overseen by a specific agglomeration council made up of select elected councillors from the cooperating municipalities.

Overall then, beyond the formal levels of governance in the case studies, there is a more complex patchwork of structures and institutions, with variation a generally accepted norm as a legitimate means to enable creative responses to changing circumstances across often diverse geographies. A dynamic approach to decision-making plays an important, if less well understood, part of democracy.

All case studies illustrate the challenges of finding the 'right size' for levels of governance: designing institutions that are 'close' to their citizens and able to be responsive, and at the same time of a size able effectively to deliver the public services those citizens require, and have the resources (both in terms of staff and budget) that allow them to be resilient and sustainable. The case studies looked at have taken varied routes. For example, Germany has been through reforms where top-down mergers were largely forced on small municipalities by area-states (Länder) to create larger institutions. This was a highly controversial move, and was contested by municipalities (largely unsuccessfully) through constitutional courts. Interviewees reflected that similar such moves were highly unlikely currently in Germany, but that the issue of cooperation between smaller municipalities to deliver services remained on the table. Notwithstanding these amalgamations, there is still a large degree of variation in size of municipality across – and also within - Länder. Some tend to have larger municipalities while others – the eastern Länder particularly – have smaller municipalities.

In contrast, the reforms in Denmark in 2007 mean there is a broadly consistent size of municipality, which are able to deliver the significant welfare responsibilities that municipalities now hold.

Functional responsibilities

Across the case studies, there is a lot of variation in which institutions are responsible for decision-making about different public services and how that is done. For example, the welfare state is delivered by local government in Denmark but in contrast, by central government in New Zealand, England and Scotland. This difference stems from the distinct historical decisions taken in each country about the welfare state.

A less clear contrast is evident in other case studies. In addition to the formal levels of local governance, responsibilities are also held by a range of intermediary organisations which can exist both above and below municipalities, and through a range of cooperative arrangements between municipalities. Some interviewees reflected on this complex landscape and its impact on accountability to local communities, particularly where traditionally the local 'town hall' had been regarded as the single site of local accountability and responsibility.

There are some patterns that emerge, where policy areas need to be considered at a scale larger than that of municipalities. This includes, for example, major infrastructure such as trunk roads and other policy issues that don't naturally reflect governance boundaries, such as environmental protection and sustainability, or energy.

Major differences also emerged: for example, in other case studies public utilities tend to remain the responsibility of municipalities. This is no longer the case in Scotland and England. Outsourcing of public service delivery by municipalities in other case studies is also a common feature. There is some notable use of civic and voluntary organisations (particularly national, and sector specific e.g. Red Cross). However, private sector outsourcing continues to be more contentious politically and with the public across at least some of the case studies. There were examples in Germany where legally-binding citizen-initiated referenda had reversed decisions to privatise certain local services.

Financial arrangements in local governance

There is a great deal of variety in the financial arrangements for local governance across the case studies. The majority of municipal income in Germany and England is from some form of central government block grant. These grants are over half of councils' income in Scotland, but only about a quarter of total income for municipalities in Denmark and a minority of income in Quebec. Municipalities in New Zealand receive no government block grant.

Sources of local income also vary. In Denmark, municipalities take most of their income from local taxation; primarily local income tax but also property and business taxes. This is the only case study with local income tax revenue. In Quebec, the majority of revenue comes from local property and other taxes. The majority of income for New Zealand's local territorial authorities comes from a local property tax. In Scotland, business and property taxes each contribute about a fifth of councils' income.

Uruguay is an exception among the case studies. It remains highly fiscally centralised, despite ongoing decentralisation reforms. At the higher level of local governance, departments have some ability to raise taxes but municipalities have no independent source of local income. They rely on central government and department funding which constrains their local financial autonomy.

Central government still has means to influence or constrain local income by retaining financial policy responsibility or through regulation, for example what local taxes exist, setting or capping levels of local taxes and tax bands. For example, in Germany decisions to introduce new taxes, and who gets that income, is set at federal and Land levels. Municipalities can only raise taxes agreed at higher levels of governance, but do have some discretion over the rates at which that tax is collected. In Denmark, a 2012/13 reform sought to ensure that the aggregated level of local taxation at a national level should remain the same. This means municipalities can only raise their rates of taxation if another municipality lowers their rates equally. Central government also does not allow municipalities to borrow. In England and Scotland, the primary source of income for local authorities is council tax, rates for which are capped centrally and were frozen for 10 years in Scotland until very recently. Parish councils in England are notable in having decision-making power to raise revenue through a local 'precept' which must be collected by the higher level council or authority.

In a number of case studies, a national-level financial 'equalisation' scheme operates to ensure that local financial arrangements operate broadly on an even playing field. For example, in Germany income tax is collected by the federal government and then distributed according to a scheme where a municipality gets a percentage of the income tax collected in its territory. This can create competition for higher income citizens who contribute more to the tax share. There is a fiscal equalisation scheme to try and re-balance this inequality of income but interviewees felt this was only partially successful. In Uruguay, national government funding to municipalities involves criteria aimed at allocating proportionately more money to municipalities with higher levels of need.

Local democracy and politics

Local politics in the case studies tends to be dominated by councillors who are members of national political parties. This poses the risk that national political issues and interests predominate over local ones. There is some variation from this general picture in some of the case studies. For example, a feature of local politics in Germany is municipal councils led by coalitions which include independent groups. Quebec is notable for having a large number of registered municipal parties that are not officially linked to parties operating at the provincial level. Reforms in Uruguay over the last 20 years or so are explicitly seeking to enable and encourage local politics to grow in ways that re distinct from the national agenda that has predominated in the past.

Some version of a local Mayor in municipalities is present in most of the case studies, as a part of the democratic landscape. But the role and position of mayor, and how they are selected can vary significantly:

  • how they are elected (directly, by the public; or by fellow councillors)
  • their degree of influence or power (do they lead the executive, or just at the political level)
  • the degree to which responsibilities are held by the office of mayor specifically.[4]

For example, Germany and New Zealand both have directly elected municipal mayors; the mayor in Germany has decision-making powers, but the mayor has none in New Zealand. The following describes a typology of different forms of mayor (from Mouritzen and Svara, 2002: 55-56):

  • The strong-mayor form: The elected mayor controls the majority of the city council and is legally in charge of all executive functions.
  • The committee-leader form: One person is clearly "the political leader" of the municipality — with or without the title of mayor. They may or may not control the council. Executive powers are shared. The political leader may have responsibility for some executive functions but others will rest with bodies, that is, standing committees composed of elected politicians
  • The collective form: The decision centre is one collegiate body, the executive committee that is responsible for all executive functions. The executive committee consists of locally elected politicians and the mayor, who presides.
  • The council-manager form: All executive functions are in the hands of a professional administrator — the city manager — who is appointed by the city council, and who has general authority over policy but is restricted from involvement in administrative matters. The council is headed by a mayor with formal presiding and ceremonial functions only.

Looking at the case studies, the strong mayor form is in place in Germany; Denmark exhibits the collective form, and Quebec the committee-leader form. Scotland alone among the case studies has no model of local mayor. In England, mayors have been established in some places but not universally, and have responsibilities at a level of governance over larger territories than would be typical in the other case studies: in large cities (London, Liverpool) or, a more recent development, in wider metropolitan areas (such as Manchester).

The relationship between national and local governance

For some of the cases studied, a constitution provides a legal foundation for the position and role of local governance and its relationship with central government, namely Germany, Denmark, Uruguay. Academic commentators reflect that the strength of constitutional protections for local governance have perhaps been overstated.[5] For others, like Scotland, England and New Zealand, a range of legislation together describes the role and responsibility of local government.

In case studies that have a constitutionally protected position for local governance, it appears that local autonomy is still not experienced as an absolute but rather as degrees of autonomy. Local autonomy can vary depending on the policy area; and in forms of legal and financial discretion.

Across the case studies that there are a range of ways in which central government is able to exercise direction and control which limits the decision-making of local governance. This exists even in apparently decentralised systems that suggest significant local autonomy. At root, these ways appear to stem from the power central government derives from its money, its ability to legislate and its authority. The following describe the range of ways in which central government can exert power and control over local governance.

Financial controls

Financial controls can be applied directly by central government in terms of the amount of funding it provides to local governance, and in conditions applied to its spend. There can also be more indirect constraint placed by central government in terms of the rules that it sets that govern local sources of income, for example by establishing caps on the rates of local taxes.

Process controls

Central government can set out requirements for the way things are done by local government.

Regulation

Legislation is a common route for central governments to put in place statutory requirements that restrict and constrain discretion locally in the delivery of public services.

Uniform service standards

Central government can set rights, obligations, standards or targets in relation to public services that restrict the discretion and opportunity for variation that can be applied locally. For example, establishing rights to childcare, setting maximum school class sizes, that must be met locally.

Political

National politicians can seek to influence local decision-making through direct intervention or through the media. This was a complaint we heard from interviewees in Denmark, for example. In addition, political representation at the local level is generally organised along national political party lines. This risks that national interests and concerns of political parties can dominate at a local level over local interests and concerns, particularly where these may be in conflict.[6]

Recent decentralisation reforms in Uruguay have explicitly tried to separate the national agenda from local elections by allowing voters to differentiate local preferences, and holding local and national elections at different times. This has been an important change noted by interviewees, but the integration of national political parties at a local level remains.

From the interviews, there appeared to be a general experience of municipalities across case studies being passed down additional functions (described by some interviewees as 'tasks'), duties or responsibilities by central government. Such moves prompted debates about whether sufficient funding from central government followed that passing down of responsibilities. That dynamic was recognised in some systems; for example, in Germany there is a principle of specific funding being 'connected' to tasks or functions. So that if responsibility for a task or function is passed down from central government to local governance then the associated funding should follow.

Citizen participation in local governance

Internationally, there has been a marked increase in activity and initiatives to increase citizen participation over the past decade or so. As an example, the focus on methods that enable a representative cross-section of citizens to take part in dialogue about issues of concern has been described as a 'deliberative wave'.[7] The increasing range of democratic innovations internationally has been recently documented.[8] Much, but far from all, of this development has been focused on more 'ad hoc', 'one-off' or topic-specific citizen participation.

In the case study profiles, a very specific focus was taken on the means and methods that enable the systematic participation of citizens in local governance and decision-making. Many interviewees drew a distinction between citizen civic participation – in local civic, cultural and sports organisations – and citizen political participation – more directly aimed at influencing local governance. The culture of citizen participation appears to vary significantly across case studies. In Denmark, for example, civic participation is the norm; the growth of local political participation in Uruguay, which is being encouraged as part of the move to increasing decentralisation, was described by interviewees as varying between local areas.

In a number of case studies, formal structures are in place to represent citizen voices at a local level. For example, there are neighbourhood councils in urban areas in Uruguay, and Community and Local Boards in New Zealand. They are very similar in form and function to community councils in Scotland. The common picture across these three case studies is that these community councils are not as representative of local populations as they could be, and are not fully inclusive, have limited scope of responsibility and lack any real influence on local governance.

In most case studies, there are other fora that exist to represent the views of specific service user groups (e.g. social or health care, housing tenants). Much of this participation is statutorily required, and in other areas is at the discretion of local municipalities. But as with the community councils, most of them are non-binding: there is no legal requirement for local governance structures to act on citizens' views.

There are some notable innovations in forms and structures that allow for greater influence of citizens' 'voice', and which support deliberation and problem solving. But it appears there is still an issue of limited impact on decision-makers. Citizen-initiated, binding referenda at the local level in Germany is one example that suggests a way for local citizens to directly and indirectly influence decision-making in their locality, with specific examples described by interviewees. Many of the case studies have made use of participatory budgeting approaches with varying levels of success. For example, citizen interest in its use in Montevideo, Uruguay, has decreased more recently; is at a relatively low-level in England; but is growing in Scotland. However, it is unclear to what extent participatory budgeting provides citizens with systematic influence over decisions which could address the biggest challenges, such as reducing long-standing inequalities.

There are some interesting examples of co-governance at a municipal level: in one municipality in Denmark, between citizens and elected councillors; in relation to land and water resources with Maori communities in New Zealand; and the Inuit in Quebec. But it is notable that there are no examples of institutions of 'civic governance' that could be said truly to delegate power over decisions directly to communities.


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