About Reform

State Policy, Legislative Groundwork, and Provisional Results of the First Stage of Decentralisation of Power in Ukraine

The state policy of Ukraine in the area of local self-government is based, primarily, on the interests of residents of territorial communities and provides for drastic changes and systemic reforms, decentralisation of power - that is, transfer of a significant part of powers, resources, and responsibility from the executive branch of the government to the bodies of local self-government. The provisions of the European Charter of Local Self-Government and the best world practice of public relations in this area are put at the bottom of the policy.

The necessity of drastic change in the structure of power and its territorial basis at all levels, taking actual steps to encourage the country's development, responding properly to current challenges required legislative action.

In April 2014, on the initiative of the then Vice Prime Minister - Minister of Regional Development, Construction, and Housing and Communal Services of Ukraine, Volodymyr Groysman, the Government approved a major approach document - the Concept of Reforming Local Self-Government and Territorial Structure of Power. Thereafter, the Action Plan was approved to implement the Concept, thus launching the reform.

To implement provisions of the Concept and tasks set out in the Action Plan, it was required to, primarily, amend the Constitution of Ukraine and develop a package of new legislation.

Amendments to the Constitution, in the first instance, had to resolve the issue of establishment of executive bodies within Oblast (regional) and Rayon (district) councils, the reorganization of local State Administrations into controlling and supervisory bodies, and provide a clear definition of the community as a political subdivision.

Through the efforts of domestic experts, scholars, and practice area specialists, the draft amendments to the Constitution were developed and submitted for extensive public discussion. It is important that the proposed amendments were supported by the society and highly appreciated by the Venice Commission.

Unfortunately, certain political circumstances made it impossible for the Verkhovna Rada (Parliament) of Ukraine to introduce the amendments on decentralisation to the Constitution as submitted by the President of Ukraine.

Therefore, as of 2014, the Government started the reform within the framework of the then effective Constitution.

Meanwhile, the major package of new legislation has been developed and become effective, the priority legislative initiatives of which legislation are currently being implemented. This refers to:

Laws on amendments to the Budget and Tax Codes of Ukraine. Due to those amendments, local budgets increased by UAH 123,4 billion: from UAH 68.6 billion in 2014 up to UAH 192 billion in 2017. The share of local budgets in the consolidated budget of Ukraine is continuously increasing and, as of the end of 2017, it is 51,2 % (in 2015, it totalled 45.6 %).

The Law "On Voluntary Amalgamation of Territorial Communities". It made possible to start forming a capable basic level of local self-government. As of the beginning of august 2018, 831 amalgamated territorial communities (the "ATCs") were already established. Those ATCs are composed of about 3,796 former local councils. Currently, 7 million people reside in the ATCs. International experts regard this rate of inter-municipality consolidation to be very high. Also, the law introduced the institute of starosta in the ATCs who represent the interests of rural residents in the community council. Today, 777 starostas have been elected, more than 1,7 thousand individuals are acting starosta.

The Law "On Cooperation of Territorial Communities". It established the mechanism of dealing with common problems faced by communities: waste management and recycling, development of joint infrastructure, etc.). 223 cooperation agreements are already being implemented. 956 communities have taken advantage of that mechanism.

The Law "On Fundamental Principles of the State Regional Policy". The government support for regional development and the development of infrastructure in communities increased by 39 times over the period of reform: from UAH 0.5 billion in 2014 up to UAH 19.37 billion in 2018. The decision on the establishment of Regional Development Agencies has already been made in 21 Oblasts (Regions), the Centres of Local Self-Government Development operate in all Oblasts, which centres, among other things, assist the local authorities in implementing regional strategies.

The Law "On Amendments to Some Legislative Acts of Ukraine regarding the Decentralisation of Powers in the Area of Architectural and Construction Supervision and Improvement of the Town Planning Legislation". About 100 cities and ATCs were vested with new town planning powers.

A package of laws pertaining to the enhancement of powers of local self-government bodies and the optimisation of administrative services provision. It allowed delegating powers to provide administrative services to local self-government bodies of respective level: individuals registration at the place of residence, issuance of national identity documents, state registration of legal entities and individuals, entrepreneurs, associations of citizens, civil registration, registration of proprietary rights, dealing with land issues, etc.

The new legislative framework significantly strengthened the motivation to inter-municipal consolidation in the country, created appropriate conditions and mechanisms in terms of legal framework for the establishment of capable territorial communities in villages, towns, and cities consolidating their efforts with the aim of resolving pressing problems. Also, the new model of financial support to local budgets has proved to be effective, which budgets obtained autonomy to certain extent and independence from the central budget.

Volodymyr Groysman's Government determined the support to the decentralisation reform in Ukraine as one of the priority tasks promoting the development of local self-government and economic growth of country in general. It is expected that 2018 will become a key year in terms of formation of the basic level of local self-government: by the end of the year, most of the local councils, which are inconsiderable in number, may have amalgamated and, consequently, become capable of taking over most of the powers, use resources properly, and bear responsibility for their acts or omissions to the residents and the state. It will create a steady foundation for taking next steps in the reform of local self-government and facilitate the accelerated reforming in the area of health care, education, social services, energy efficiency, as well as in other sectors.

Regarding subsequent development of the legislative framework

The following important laws are expected to be passed:

- "On Service in the Bodies of Local Self-Government" (it is currently being refined by the Verkhovna Rada (Parliament), subject to proposals of the President). It will ensure equal access to, and enhance the prestige of, service in local self-government bodies, as well as enhance the motivation of local officials in terms of development of communities and individual development of the officials.

- "On Fundamental Principles of Administrative and Territorial Structure of Ukraine" (the draft Law has been prepared for consideration by the Verkhovna Rada (Parliament)). Subject to the effective Constitution, it determines the fundamental principles on which the administrative and territorial structure of Ukraine, types of settlements, the system of administrative-territorial entities, powers of the governmental authorities and local self-government bodies in terms of the administrative and territorial structure, procedure for the formation, liquidation, establishment and changing the boundaries of administrative-territorial entities and settlements, maintenance of the State Register of Administrative-Territorial Entities and Settlements of Ukraine should be based.

- Regarding land resources management within the boundaries of amalgamated territorial communities. It will introduce the principle of ubiquity of the ATC's jurisdiction in terms of land relations, provide powers to dispose of the land plots outside the boundaries of settlements.

- Regarding the expansion of types of town planning documentation at the local level. It will remove the gaps in terms of regulation of the town planning and make any unauthorized use and allocation of land impossible.

- Regarding government supervision of the legality of resolutions passed by the bodies of local self-government.

- "On Urban Agglomerations". It will determine organisational and legal principles for the formation of urban agglomerations by territorial communities of villages, towns, and cities, including by the amalgamated territorial communities, the principles and mechanisms of co-operation of territorial communities within the boundaries of urban agglomerations, as well as the forms of government support for urban agglomerations.

- Amendments to the legislation on health care and other sectoral changes.

The success of reform at the initial stage proves that Ukraine has chosen the right way and it needs to follow that way. It should not stop. However, amendments to the Constitution should be made next, which amendments provide for the decentralisation and are required for further advancement and completion of the reform.

Monitoring of the decentralisation reform 

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