Ireland Finance

Local Government Finance in Germany – different but equally challenged


Image: alfexe via istock

The ongoing work of the Local Democracy Research Centre at the LGIU continues to provide interesting knowledge and data about local government systems across the globe.

Recent work examining the finance system in England has now been supplemented by an equally excellent research paper on local government financing in Germany. It is research which at one level highlights the clear differences in structure, responsibility and self-financing capacity when compared to the system in Ireland. At the same time, the research points to challenges which will have a resonance with Irish Elected Members and Officials.

This was underpinned for me during a recent study visit to a number of local authorities in Germany. Elected members and their staffs at one level seem to have levels of autonomy that their Irish Counterparts could only dream of but at the same time, many of the issues that now confront the local Mayors of Germany are not that different to their colleagues in Ireland.

One thing that is clearly different is the bottom-up approach to the delivery of person-centred services. The idea that a single delivery platform, democratically established and locally accountable, is the best route to public service delivery, is something the people and politicians of Germany seem to understand. The idea that the further removed decision-making is from the local person, the less likely efficient public services will be delivered, has long been appreciated. This is not something that could be said of Ireland, I greatly regret. As a consequence, the Basic Law of Germany, unlike the constitution in Ireland, makes it clear where responsibilities for service delivery and taxation rest. There is therefore a highly developed taxation and service delivery framework in place in Germany that underpins the central role local government, in its various manifestations, operates and plays across the Federal Republic. It is also most inconceivable that even politicians at the level of the Lander would be expected to turn up for the launch of local policies, as these clearly are the responsibility of the local councils or their districts.

In addition, the idea that local authorities would have to invest a considerable proportion of effort into applying for multiple annualised funding platforms is alien. Bespoke funding does happen but is clearly set within both legal and administrative regimes that recognise the constitutional standing of local government and the tripartite partnership between the local, the States (Lander) and the Federal Authorities in Germany. Having staff spending their valuable time drafting individual funding applications for them in turn to be adjudicated upon at State or Federal level, unsurprisingly would be viewed, at least by those I met while in Germany, as a poor use of increasingly scarce public service staff. Something for the Irish system at the national level to learn from perhaps?

At the same time, the role of local administrative judicial processes is interesting. National or even Lander level bodies, within the frameworks of government at those levels, are subject to the rigours of local judicial oversight as much as the local level. What this means is that there is clearly a less disaggregated approach to the organisation of public services, certainly when compared to Ireland, but there is clear access to administrative oversight at the local level through the administrative legal code which itself is locally based.

Also of interest from an Irish perspective is the level of cross-level interaction between the various layers of government which is underpinned by long-standing administrative and judicial processes. Even in a country as diverse as Germany with its scale, history and regional/local identities, there is an uncanny consistency in service delivery at the local level despite the migration towards elected mayors which occurred, for much of the country, post the fall of the Berlin Wall. By the same token, the critical role of the elected mayor at the heart of a local public service platform that essentially delivers all person-centred local services from housing to water to primary healthcare and education, would be completely at odds with how such services get delivered in Ireland. Perhaps that might change with the advent of direct mayors in Limerick and potentially Dublin? One thing for certain is that the creation of interlevel partnerships between local, regional and federal layers in Germany in the past three decades has been transformative for its local government system. Irish civil servants and their political masters at the national level could be in for something of a rude awakening if the experience of Germany is going to be repeated here as mayors begin to stretch their mandates which will inevitably occur.

Having noted the above, it was interesting in walking the streets of several of the cities visited, some large and others not so different in scale from what we find in Ireland during my recent sojourn, to see how local issues can be so similar. Worries about anti-social behaviour, homelessness, delivery of social and affordable housing, vermin on their streets, waste collection, climate change, etc., are all something one would see here in an Irish city, town or village. Coping with inadequate regimes for local property taxes being dependent on valuations in some cases dating back to the 1950s or even in the case of former East German municipalities, back to the 1930s, is something Irish Authorities might share! Equally, the rule of the Constitutional Courts will be not unfamiliar.

These immediate experiences of meeting with senior local politicians and officials are borne out in the research recently published by the LGIU and for that reason reading their work would be useful for those worrying about how the finances of local government in Ireland are structured if only to appreciate that even in Germany there are challenges with their systems of financing and local administrative judicial processes, problems which strangely have a strange familiarity with how things are (or indeed not) done in Ireland.

Funding systems for local government – international comparisons


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