Kainuu Regional Self-Government Experiment

Nordia Geographical Publications 34: 4, 49–55 Raimo Sivonen

Kainuu regional self-government experiment

Raimo Sivonen Kainuu Vocational College

Foreword For example in Denmark is happening at the same time a big change in the sizes and functions of municipalities. Hopefully this will wake up interest to the experiment by In the region of Kainuu has started in the researchers to start different monitoring, Finnish local administration history a unique data-collecting etc. work for coming experiment. By the experiment to the analysis. There is field for geographers, citizens of a region has given power to sociologists, economics and many more control through direct democratic branches of science to start research work processes to the regional development. This from point zero. experiment is unique not only as a new form This paper is based mainly in the authors of regional administration; it’s also a test own work experiences in municipal ground to form new openings to local and administration and the work during the regional services. There is still left preparation work of the Kainuu regional independent municipalities, but the main self-government experiment. part of their traditional tasks has been given to regional organisation (joint municipality) in the name of efficiency. This experience The Finnish local should be one model in the Finnish administration municipal framework to test how certain quality of the welfare services could be produced at depressing public economy. It Public power in Finland has been actually is also a test ground to give decision power polarity, municipalities in other side and the to local administration over certain government with its administrative authority government funds. on the other side. This paper is not scientific analysis of the experiment. There is a certain reason for The Finnish constitution gives to the municipalities high level self-governing level. that: this experiment has started at the This has a long historic background. beginning of the year 2005. First years of Municipal autonomy is guaranteed in the experiment are forming of the processes section 51 of the Constitution. Welfare- transferred from municipalities to region. services to citizens are practically run In this paper is not described neither organisational processes nor operative through municipalities. Government has given new tasks to municipalities, but it has actions over the regional administration. In to be done by legislation. In legislation is this paper is no international analysis of the given the content of those tasks but also the situation of municipalities or local services.

49 Kainuu regional self-government experiment NGP Yearbook 2005 principles of the funding of those tasks. municipalities. So the councils are not The basic tasks run by the municipalities are elected directly by the citizens. social and health care, education up to State has controlled how the secondary level and polytechnics, municipalities realize their legislative tasks environmental regulations, civil planning mostly through provinces. After the last and cultural services. The development of organisational change the amount of infrastructure to give possibilities to live and provinces is reduced to five. Besides that encourage entrepreneurship is also seen an the government is operating with several important part of municipal tasks. public tasks (for example environment, Discussions about the state of justice, labour services, road maintenance municipalities role in society has not caused services etc) through national and regional any big changes in it. The independent of offices with task-oriented jobs. municipalities is experienced also highly as The main purpose of state supervision an emotional question by local citizens. The is to ensure that local authorities carry out amount of municipalities has slowly their statutory obligations and do not decreased from the highest amount 602 overstep their proper mandates. The means municipalities in year 1944 to 432 of State supervision can be divided into municipalities at 2005 (Kuntaliitto 2005) by two categories. State supervision takes place voluntary merging. Reason for merging has through the system of appeal whereby the mostly been economical. By voluntary concerned party – member of the actions municipalities can produce different community or legal person domicile in the services together. The highest decision municipality – can challenge the decision of making operator in municipalities is the a local authority and possibly have it council, which members are elected by revoked. Such appeals are dealt with by the general poll. The Act about municipalities Provincial Courts and the Supreme (365/1995) will define the role and basis of Administrative Court. Secondly, it is the the municipalities actions. duty of the Provincial State Office Finland has been divided to 19 regions. (provincial government) to monitor local Ahvenanmaa is the 20th region, but it has a government in general (Leskinen 2005). specific status by international contract. In European Unions statistical division region is understood as the NUTS 3 level region. Development of the role of By legislation has been set that regional joint municipalities during last 15 municipalities are producing regional special years health services and regional civil planning. Regions administrative role over the municipalities has concentrated merely in During last decades the role and the tasks regional planning. The regions are of municipalities became multifunctional controlled by the municipalities, which own and covering almost all the aims of the them by joint municipality agreement. The welfare system created by the political decision making power in joint authorities. Up to the beginning of 1990´s municipalities are the councils with the government (parliament) set the tasks to the members named by the owner municipalities and at the same time for every

50 Nordia Geographical Publications 34: 4, 49–55 Raimo Sivonen task was shown the funding elements, the Finnish state run into dept during few mainly through taxation system. This meant years by keeping up the public tasks. So the also a creation of complicated public start to more flexible municipal operation funding system where the municipalities mode was not so good. were divided in several categories by the The general policy of public average income, population density and administration (governmental programmes) other functions to show their possibilities is to decrease the general level of taxation. to carry out the different tasks financially Basically government can only do decisions (financial capacity classification). This system to state tax levee, municipalities can decide meant that the municipalities funded the the municipal tax by themselves. But there tasks by their own municipal taxation, by are also some political aspects, which effect revenues from different charges and by a that the municipalities are very careful to variable amount of state grants depending raise the level of municipal tax over 20 %. to the financial status of municipality. The Anyway the general way of the grants were showed to every task separately. development of the financial status of Government also controlled quite detailed Finnish municipalities is quite desperate. the way how the municipalities carried out The most of the municipalities on rural areas the tasks directed by legislation. are losing population and age structure is On the 1990´s the government prepared getting distorted. Work-aged population and the parliament accepted the change of (read: tax-payers) are moving out and the state funding system to the municipalities. senior citizens with growing needs of Basic idea in that change was to simplify the services are staying. grant system and give municipalities more independence to carry out their tasks. The way was to change the task oriented The Kainuu experiment funding system to general grant system where the certain differences in financial capacity of municipalities was noticed, but On above-mentioned situation in Kainuu otherwise the state grant was paid by one was waken up the strategy to find out the lump sum without any “ear-marks”. The way to face the coming future. The area of municipalities could plan their operation by Kainuu region is 21.567 km2 and its their own will, still they had to realize all the population is 85.965 inhabitants tasks shown by legislation to them. (31.12,2004). The development of Basically this was a new step to increase population is following the trend of rural municipal independence. Practically it caused and Northern regions in Finland, the some problems. Firstly at the same time population is reducing. The reduce of Finnish economy was in bad depression population in Kainuu was fastest from and the basis of public funding was in Finnish regions, -0,7 % in year 2004. The troubles. Secondly the models of the gross national production per capita in operative actions in municipalities were Kainuu at the same year was 68 % (lowest shaped by an automatic increase of funding of Finnish regions) of Finnish average, and it was very difficult to change the way (North-Ostrobothnia 95 % and Lappland of work. The economic depression meant 81 %). So by those figures Kainuu is the less

51 Kainuu regional self-government experiment NGP Yearbook 2005

Figure 1. Kainuu region in Finland. developed region in Finland. (Tilastokeskus (343/2003) in Kainuu was passed in the 2005). Finnish Parliament in February 2003, and it In Kainuu is 10 municipalities and it has took force on January 1, 2005. (Leskinen been divided in two regional statistical units 2005). By the Act the experiment should (NUTS 4); Kajaani and Kehys-Kainuu. end at the end of year 2012. The Existing administrative and budgeting municipality of Vaala is in the experiment practices were not considered to provide only in regional planning. sufficient support to the initiation of major, As of that date, the region will then be effective industry and business development responsible for health care and social projects in the region. Kainuu was seen as services (with the exception of children’s a suitable testing ground for new types of day care), as well as vocational and upper administrative and financing structures. secondary education and professional adult Supported by these arguments, the Act on education. Municipality of Vaala is not the regional self-government experiment under the region in these tasks.

52 Nordia Geographical Publications 34: 4, 49–55 Raimo Sivonen

Table 1. The population of Kainuu municipalities 31.12.2004 and target of population in 2025 (Kainuun maakunta 2005)

Population Tearget 2025 Chang Change % 2004 2004-2025

Hyrynsalmi 33148 2563 -451 -16,

Kajaani 305 675 355 67 -1-0,0

Kuhmo 100 449 8955 -21 89 -18,

Paltamo 49219 3054 -967 -15,

Puolanka 33472 2984 -162 -18,

Ristijärvi 16659 1346 -619 -11,

Sotkamo 100 701 110 50 -920 -1,

Suomussalmi 150 248 8359 -1165 -16,

Vaala 36751 3541 -933 -8,

Vuolijoki 23643 2048 -116 -6,

Kainuu 855 965 709 70 -36 26 -7,

Regional industrial policy, regional time be grouped in a single subsection. planning and development will fall under (Leskinen 2005) regional authority. Regional administration By this Act was not only formed a joint will also apply expediency consideration to municipality to realize the member pass decisions on the use of significant municipalities tasks, it was also given a national development funds and EU democratic mandate by direct elections of structural funds, allotting these to their the regional council. This was also a new designated purposes. In the national budget factor compared to other regions or other for 2005, all national funding for the joint municipalities in Finland. First elections development of Kainuu will for the first of the Kainuu regional council were held

53 Kainuu regional self-government experiment NGP Yearbook 2005 at the same time of Finnish municipal social partners. The planning process was elections at October 2004. open and democratic with totally about 1000 people involved. Basic idea to operate with the entire The Kainuu model mandate given by the act is that now the regional council does have the power over the single municipalities with its tasks. By the In discussions are told about “The Kainuu common contract made by the member model”. But in practise there is not a ready municipalities they will pay 59,9 % of their formula for that, yet. The experiment has municipal tax income to the Kainuu region. been operating only for few months and They will also pay the state grant for social there is a lot of operations which will be and health care and for secondary colleges formed in their final way after the time goes. to Kainuu region. So that’s how the So the Kainuu model is just in its beginning. financial independence is operated for During the planning process before the start Kainuu region. of experiment was working a several The model for social end health care can amount of work groups with a lot of describe the basic idea for Kainuu model. specific tasks to plan the first steps of It’s a customer-oriented model where the experiment. In those work groups were needs of clients will target the structure of members from public administration, services. The services you need often are municipal council’s members and other locally produced and the services you need

Figure 2. General structure of social and health care services in Kainuu region (Pikkarainen 2005)

54 Nordia Geographical Publications 34: 4, 49–55 Raimo Sivonen seldom or the services, which need certain - What is local in multifunctional region special knowledge, are produced regionally. (world)? (Pikkarainen 2005). This model is shown in - Can we change from municipal citizen the figure 2. to regional citizen? To the citizens of Kainuu region has - Can we find out any certain point where been given a freedom to choose local social the economical efficiency and the social and health care services where they want. carrying capacity will meet? If a citizen of Paltamo municipality will - Will the bigger role of region increase have his health care services from the health the role of villages? centre of Kajaani, he has the access there. - Did the experiment succeed? The information system in health care is covering the entire region; so all the patient Even we are discussing about information is available in different health experiment, it does not mean an open test centres. ground for every possible future. The rights The local – regional –model is one of of citizens to get public services and ensure the ways how the Kainuu region should be legislative rights are at all time the basis. seen different compared to other regions in Finland. This kind of basic forming should be seen also in the development of References high school network, vocational education or development of enterprises and economy. Kainuun Maakunta (2005). Uusiutuva Kainuu, Kainuun maakuntasuunnitelma 2025. The Future questions Ehdotus maakuntavaltuustolle 26.09.2005. Unpublished proposal to Kainuu council. The Act over the experiment is ending at Kuntaliitto (2005). Kuntatilastot. http:// 2012. But it is very unlikely the municipalities www.kunnat.net/ should go back to old system. If the k_perussivu.asp?path=1;29;348;4827;4892;4869 possibilities of the experiment are used Leskinen, Hannu (2005). Regional self- government experiment in Kainuu correctly, there should be found and tested Region. http://www.kainuu.fi/en_tied04/ new ways to carry out public services. Those Self_government_experiment_020105.doc. services should be client friendly, Kainuun maakunta. economically effective, low hierarchical and Pikkarainen, Marita (2005). Muutos on transparent. mahdollisuus. An unpublished For geographers there should be found workpaper. Kainuun maakunta. several points of interest. Now it should be Tilastokeskus (2005). Väestö iän mukaan vuoden 2004 lopussa. http://www.stat.fi/ easy to carry out research work where tup/suoluk/suoluk_vaesto.html#bkt. could simultaneously be a reference region, which is meeting the same economical and demographical challenges. At least after the experiment we should find answers to following questions:

55 Kainuu regional self-government experiment NGP Yearbook 2005

56