Lithuania Unitary state

Reforms

The country’s legislation underwent a major change with regard to local governments and their financing in 2009 and 2010.

Structured around an organisation of only one level of local government, municipalities in Lithuania went through a series of major cuts in financing and financial autonomy throughout the economic crisis.

The regional level of government devolved from the central state was in fact eliminated by disbanding regional governors’ offices, which led to the transfer of many competences to local governments, even if most of them were taken up again by the central Lithuanian government. A merely rudimentary regional level was left, represented by the regional development councils, a body for each region, and its municipalities to adopt decisions on common issues, however, in fact almost without administrative structure to support its implementation.

Lithuanian municipalities have experienced cutbacks in financial transfers from the central state, which must be seen alongside new restrictions with regard to the autonomy of decisions and the borrowing and debt of municipalities, despite the borrowing limits being more than doubled in average. The government is also urging local governments to exercise much more restraint and rigour when it comes to their expenditures.

As a result of this difficult financial situation, many municipalities have made multiple efforts to improve their administration’s efficiency and cut costs. A downward trend in the number of employees in the local and regional administrations has been noted in particular.

Local self-government in Lithuania:

The reforms enacted since the beginning of the economic and financial crisis may cut down on the financial independence of Lithuanian local governments. Even though certain competences have been recently transferred to the municipalities, the amount of accompanying resources is rather disproportionate to the missions assigned, which may diminish local governments’ options and scope for action.

KEY REFORMS

• 2000: Municipal Reform Act.

Since 2009, local government reform:

• Abolition of the regional level (devolved central government administration)
• Devolution of specific powers to municipalities
• Restrictions on municipal debt
• Cut in transfers from central government
• Efficiency programmes and local civil service staffing cuts