The reform of local self-government and territorial organisation of power under the principle of decentralisation has been implemented in Ukraine since 2014. It is a comprehensive reform that affects qualitative changes in all spheres of human life. The reform is multifaceted, and therefore complex. However, amazingly enough, including in accordance with the foreign partners of Ukraine, this reform is the most successful in our country. It enjoys the support of all branches of power in Ukraine, the majority of Ukrainians, and demonstrates real qualitative changes. But every reform has its beginning and should be completed. When is the reform expected to be completed? What still needs to be done before this period? How to protect the reform from its rollup. Ukrinform addressed these and other questions to Vyacheslav Nehoda, First Deputy Minister of Regional Development, Construction, Housing and Communal Services of Ukraine.

- Mr. Nehoda, in December 2018 a major forum devoted to the decentralisation reform was held. There Claudia Luciani, representative of the Council of Europe, said that the Ukrainian decentralisation experience can be taken as a case. Our European partners are very positively evaluating the ongoing reforms. And in general, how would you assess the local self-government reform as a result of 2018?

- Of course, such assessments are pleasant to hear from our partners – the Council of Europe and other experts representing the European Union or individual countries that help Ukraine in carrying out certain reforms. Such high recognitions are also based on the experience that exists in Europe and in many countries related to similar reforms. And they understand the price of achievements or results that we have today. This is, of course, a positive assessment, which adds more confidence to us.

2018 was a consecutive year, I would not particularly distinguish it from 2017, 2016 or even 2015, because most likely we faced more difficulties at the beginning, when it was necessary to form a public opinion, persuade political opponents. Yet if we talk about the results of 2018, they, in my opinion, are positive. There are already 874 hromadas formed. The main thing is that citizens’ trust in the reform is high. In 2018, I would also attribute the transfer of agricultural land from state to communal ownership of AHs to such positive results. If we consider the issue of finance as a whole, the dynamics of local budget increase is positive as well. We started working in 2014, when local budgets’ own revenues totaled UAH 68.6 billion. In 2018, we will reach the level of over UAH 230 billion.

 

 

“Hromada residents should decide on ineffective local authorities themselves”

- How, in your opinion, have the amalgamated hromadas, that are already feeling the taste of self-government, learned to administer funds?

- We have a large number of local self-government entities. These are village, settlement, city, rayon and oblast councils. It will not be completely correct to say that everywhere everything is fine. According to the results of the elections, most AHs elected interesting individuals as local leaders. There are those who came in the wake of populism, but this is not only in AHs. We have examples of amalgamated hromadas, where we can say that teams are not very professional.

Now, regarding the general situation in Ukraine. We have hromadas with a reverse subsidy or funds, the income from which is withdrawn to the budget in order to provide assistance to other hromadas. And there are AHs that really lack these funds.

Therefore, we say that amalgamated hromadas in Ukraine are first of all to be formed around cities, around centres of economic growth in order to further strengthen this development, so that both budgets and other investment resources provide the potential for sustainable development.

- What should hromadas do, what should they concentrate on after amalgamation?

- We suggest all new hromadas to start with elaboration of their own local development strategies. This is first and foremost. Our European partners, for example, the U-LEAD with Europe Programme, and the USAID DOBRE Programme, provide them with advisory support in this regard. Of course, there are some current urgent things that hromadas have to deal with. But in general, the main task of hromadas, if they think about systemic development, is, first of all, to formulate the right development strategies based on spatial development, urban planning documents. We have AHs that include more than 40 settlements. That is, in the first place, it is necessary to analyse the local resource they have, including natural resources, and especially human potential. It is important to unite all hromada’s assets around the formation of prospects for development and their gradual implementation.

 

“With regard to passive hromadas, the state will have to decide on their amalgamation”

- At the beginning of the conversation it was said that now the problem is not even about making hromada amalgamate, but about resistance to such amalgamation. The Ministry conducts its ranking of regions according to the AH number, and the situation differs among oblasts. For example, the Kyiv Oblast holds almost the last place by number of AHs formed. How can this process be intensified? Hromadas will have only 2019 to amalgamate voluntarily...

- Talking about resistance, it exists, and it is different. Opponents of the reform, or those who resist, may be in the system of executive power, in the system of local self-government. Therefore, of course, the human factor also exists, but I would not say that this is the main resistance driver. It is also about business interests.

There is no sterile reform. Any reform is a kind of a political compromise, including at the central level, because all decisions relating to reforms are taken through legislation. Laws are adopted in the Parliament, and in the Parliament we also have representatives of different political groups. And we need to search for local compromises. However, I always emphasise that our task is not to fight against those who oppose it today. We cannot have serious opponents in this reform. There may still be people, who do not understand this reform, do not realise its prospects and advantages, or cannot find themselves in a new system.

Unfortunately, the Kyiv Oblast today closes the last three oblasts in the ranking by its main indicators. Although the Local Government Development Centre, established by the U-LEAD with Europe Programme, started to work here very well during the last year, and in my opinion, we now have some understanding in the oblast state administration as well.

The process of voluntary amalgamation will be in place in 2019, 2020, and in 2021... We have examples today, when AHs make a decision to amalgamate with each other. They saw that in the format they amalgamated, they are not attractive enough and generally incapable to solve some local problems.

- And and what about those hromadas that have not yet made a decision at all, or are, for example, still in the process of amalgamation?

- Of course, this process cannot last forever. Although the law may allow further voluntary amalgamation. But it is important for us, and the Prime Minister has set the task for regular local elections to be held on a new territorial basis of hromadas and rayons. It cannot last long when some hromadas have development, investments, and others do not. Due to own resources and state support through subventions, the AHs can improve the quality of services, infrastructure, educational, healthcare services, whereas in other passive hromadas the situation is preserved and no positive changes occur.

 

“A new subregional level will be created according to clear criteria”

- What will happen to the rayon level of local authorities? Will there be some kind of rayons’ reformatting, consolidation, what exactly?

- By their parametres rayons should be more or less identical. And the most optimal format is the population number of about 150 thousand inhabitants. Today we have no more than 5 rayons of this kind.

It is not entirely correct to talk today about amalgamation of rayons, since there will be no such process that we have with hromadas. It is necessary to approve a new rayons’ division through the Parliament, and this process has already started on the MPs’ initiative.

MinRegion has set itself the task of defining the criteria by which the rayons will be formed, to work it out in each oblast, together with local authorities.

If we talk about 2019 – it will be a very responsible year for us, the country needs to hold essential elections, which will necessarily affect the political climate not only in the Parliament, but in the state on the whole. And it is very important that everything initiated in 2014 develops and there is no revision of these results.

 

 

- Is such a revision possible, or have we reached the irreversibility of the decentralisation process?

- We must do our utmost to continue the process of decentralisation, but it is important to raise another issue, as stated by the President of Ukraine at the meeting of the Regional Development Council, namely the consolidation of the provisions on decentralisation in the Constitution of Ukraine. And the working group, formed by the Prime Minister, began its work on the text of possible amendments to the Constitution. Now there is draft law No. 2217 in the Parliament, which was supported in the first reading, received the conclusions of the Constitutional Court and the Venice Commission. It also needs an immediate decision, as its “stay” in the Parliament blocks the possibility of another draft law submission.

- What will happen to those 45 amalgamated hromadas, where the first elections were not held because of the martial law?

- All the hromadas, where the Central Election Commission announced the elections, are actually included in the interbudgetary relations, and they are on the list of those included in the state budget. Indeed, because of the martial law there emerged a situation that has never existed before. In order to change it, there are at least two options. The first one is to exclude them from the law on the state budget. But to do this, it is necessary to make changes to the state budget for 2019. Is it real? Will the Parliament make changes to the budget? The second option, in my opinion, is more realistic – to immediately announce elections in these hromadas, and thus, to continue the electoral process that was interrupted. This decision should be taken by the CEC. There is currently no legal obstacle for the CEC to resolve the issue of the first local elections.

- What support will AHs receive this year?

- For hromadas there is a direct subvention for infrastructure development – UAH 2.1 billion (in 2018 it was UAH 1.9 billion). We believe that these funds should be distributed among all AHs, including among those 45, where elections have not yet taken place as a result of the martial law. Local self-government can take part in the competition for investment programmes and regional development projects that can be implemented at the expense of the State Fund for Regional Development – UAH 7.7 billion (in 2018 – UAH 6 billion) As far as rural healthcare support and development is concerned, there is an additional UAH 1 billion for this sector, plus UAH 4.0 billion of transition funds left from 2018. Besides, UAH 4.7 billion are envisaged on the socio-economic development of regions and hromadas.

The sector support of the European Union is about UAH 0.5 billion. The state budget envisages UAH 14.7 billion for local roads (in 2018 the sum was UAH 11.5 billion).

In total, hromadas’ own resources for 2019 amount to UAH 292.3 billion, transfers from the state budget make up UAH 288 billion. It is important that local authorities prepare qualitative, competitive projects, implementation of which will provide added value.

The conversation was led by Nataliya Molchanova

Photo by Yuliya Ovsyannikova

The full version is available in Ukrainian – please click HERE