Spain Unitary state

Reforms

A large-scale reform aimed at modifying the law of 1985 on local administration is currently being discussed in Spain, within a context of substantial budget restrictions.

The Spanish government has been seeking to reduce the cost of local public administration by around 7.1 million euros per year. It presented a first proposal of an ambitious reform of local government in February 2013. However, the draft legislative project encountered reluctance and opposition from the local government world, including the governing party’s local leaders. Furthermore, an opinion statement issued by the Council of state in June 2013 severely criticised the proposal. Consequently, the government did not approve the final version of the legislative proposal until late July 2013, and sent the draft to Parliament on 2 August. Parliamentary discussions started in September 2013 and they should last some months. With the ample majority supporting the cabinet, the new statute should be approved by the end of 2013 or the beginning of 2014, probably with minor amendments.

Compared to the initial drafts, the final legislative proposal titled “Sustainability and rationalization of local government Act” is less ambitious and “aggressive” towards local authorities. However, several reforms are envisaged:

The bill focuses on the overlap of competences between the different levels of government and attempts to clarify this point by attributing one competence to one administration. The existing local competences relating to education, health and social services will be transferred to the autonomous communities, a change which would allegedly lead to savings of 3.2 billion euros. Furthermore, the general residual clause of competence in favour of municipalities has been removed: municipalities will only be allowed to act in domains clearly authorised by the laws (either national or regional);

The provincial authorities (diputaciones provinciales) will be significantly reinforced. For this purpose they received increased powers to coordinate the delivery of public services by the municipalities of the provinces having less than 20 000 inhabitants, and in several cases they may even be entrusted to deliver those municipal services in municipalities that prove to be financially unable to provide such services above a certain quality standard; There will be a greater number of state (and regional) financial controls over the municipalities, and the in-house financial and accounting controls, existing in every municipality, will get a stronger role; Remunerations of local councillors and mayors are tightly regulated in a way which severely reduces the number of municipalities whose local councilors may be paid on a full-time basis: this measure will especially concern mayors of municipalities with less than 1 000 inhabitants, along with a high percentage of the country’s municipal councillors. Furthermore, a salary cap has been established so that no mayor in the country may earn a higher salary and wages than certain central government top-rank officers, which are determined in the annual General State Budget Act.

Mergers of local authorities are regulated for the first time in national legislation, and a set of incentives are established to accomplish such amalgamations; The world of local government quasi-autonomous organisations (municipal corporations and foundations, inter-municipal associations) is regulated in a rather restrictive way: existing bodies will only survive in the future if they are clearly economically viable, while strict conditions are set for the creation of new ones.

Local self-government in Spain:

The recentralisation of certain competences and the financial difficulties of local and regional authorities in times of economic and financial crisis may put the autonomy of Spanish communities, provinces and municipalities at risk. This reform must also be seen in its broader context: the municipal deficit only accounts for 4% of all Spanish debt.