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Cyprus should cut municipalities to five

By Angelos Anastasiou

UK experts, recommending sweeping reforms, suggest the current island’s 30 local authorities be reduced to a mere five, which should be aligned with the geographical boundaries of existing district offices.

The report, commissioned by the Cyprus government as part of its effort to modernise the public sector and prepared by the National School of Government International (NSGI), sought to “provide feasible options for improvement, reorganisation and restructuring of the Cypriot local government.”

Following three missions to Cyprus between September and December 2013, during which consultants met various stakeholders, the NSGI identified the absence of a culture of performance management, a lack of transparency, and tight control of finances by the central government.

The NSGI lists four restructuring scenarios and labeled the status quo “not an option.”

The first scenario calls for the creation of a “new tier” of local government – termed ‘district councils’ – to intermediate between District Offices and municipalities and communities.

The report discounts this option as ‘unclear’, causing potential duplication, and deems it not meeting the desired standard of community engagement while adding unnecessary bureaucracy.

The second requires the consolidation of existing structures of local government, i.e. the merging of municipalities and communities into administrative bodies large enough to sustain economies of scale. The report suggests that merging costs could be offset by ongoing cost savings, but anticipates substantial obstacles in consolidating communities with no existing core to build on.

A variation of the second scenario entails the administrative clustering of municipalities and communities to facilitate economies of scale, requiring legally binding agreements to ensure sustainability. The report evaluates this option as the least costly, but identifies minimal corollary savings in overheads like senior management, and offers no improvement potential for governance and accountability.

The final option calls for replacing existing local government structures with five new directly elected local authorities, with boundaries matching those of district offices. The new bodies would, at the very least, combine the powers and responsibilities of both district offices and municipalities and communities. The report identifies substantial benefits in this option, like clear accountability, the capacity to assume additional responsibilities, and the existence of a core – in District Offices – to build around.

The report concludes that the last scenario strikes the optimum balance between feasibility and viability, offering citizens “more modern, uniform and efficient service provision, with mechanisms to ensure continued community engagement.”

“Short of this”, the report reads, “the second option provides a feasible way forward, which is an advance on the current situation but which is likely to under-perform compared to potential in the medium term.”

The current local government structure in Cyprus maintains 39 municipalities, nine of which are in the occupied areas, and 386 communities.
Commissioner for Public Sector Reform Emmanuella Lambrianides-Moushoutta said that the consultants’ proposal should not surprise anyone.

“The British experts report that the status quo is not sustainable, a fact we acknowledge and see around us daily,” she said.

According to the Reform Commissioner, the current system tends to serve itself instead of citizens and causes great inequalities in local government service provision. Substantial challenges are also expected for local government in light of new methods of managing public finances which form part of the ‘umbrella bill’ currently under discussion in the House.

Specifically, the bill calls for items on the government budget to no longer be evaluated solely on the basis of cost, introducing a results-driven approach instead.

Commenting on a possible timeframe for implementation, the Commissioner confirmed that any measures could be planned to coincide with local elections.

Union of Cyprus Municipalities (UCM) president and Famagusta mayor Alexis Galanos characterised the report as “useful, but preliminary.”

“There are many voices in the UCM because 39 municipalities couldn’t possibly share an opinion, but we all agree that improvements must be made,” Galanos said. He lauded the fact that various options were analysed in the report, noting the authors’ preference towards “clear, radical solutions”, but pointed out that “they have the UK’s experience in mind, with very large municipalities.”

“In Cyprus’s case, the number of municipalities is disproportional to their size, but we’re not the last on the list.”

Galanos also said that the report acknowledges that “given our political environment, certain things can’t be done.” “We need to examine how we can incorporate elements from the study to our circumstances”, the UCM head noted.

Commenting on the importance placed on decentralisation of power to local government in the report, Galanos said that “such decentralisation would certainly help municipalities increase their revenues and free the government from the need to subsidise them, enhancing independence and democracy.”

The report stresses the need to fight corruption (‘rusfeti’) and the undue influence of political parties on local government, he added.

Galanos revealed that a final visit is expected by the British experts before submission of the final report in March.

“We hope that the Italian experts’ report will be ready by then”, he said.

According to Galanos, the British experts should have held more meetings with local government officials, and perhaps academics and experts.

“In my personal opinion, they should not have limited themselves to public servants only”, he concluded.

The Ministry of the Interior issued a statement on Thursday, announcing the start of a public debate on the issue of local government reform and outlining the way forward in light of the report’s conclusions.

“The ministry’s stated goal and intention is to engage all stakeholders, and the wider public, in a free, public and democratic debate on the necessary reform of local government”, the statement reads.

With regard to the way forward, the interior ministry announced minister Sokratis Hasikos’s initiative invite the UCM, the Union of Cyprus Communities (UCC) and all mayors next week to present and discuss the preliminary report.

Hasikos will also invite all political parties at a date to be determined between February 4 and 6 to meet and discuss the issue, and announces the commencement of a public consultation, inviting contributions from institutions and organizations, as well as the wider public.

Further, at a time to be determined between February 17 and 21, the NSGI experts will present the preliminary report and their proposal to all stakeholders in order to obtain additional feedback, and will subsequently meet with Hasikos and the permanent secretary of the Interior ministry in order to build consensus on the proposals.

On March 31 the NSGI will submit its final report.

“As the minister has repeatedly affirmed, the government of Cyprus wishes to agree on a new model and action plan for the reform of local government by June 2014, at which time the relevant bill will be submitted to the House. The ministry’s goal is to clarify the kind of local government we want for future Cyprus through debate and consensus”, the statement concluded.

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