Decentralisation and Public Services: A Case of Public Sector Restructuring

(November 2006)  TRACE – Trade Unions Anticipating Change in Europe – is a EU-funded project coordinated by the ETUI-REHS[1] Education department on behalf of national trade union confederations and European industry federations affiliated to the ETUC – the European Trade Union Confederation. The focus for everyone is on restructuring, adapted to the needs of different countries and sectors.  The results of the overall project will contribute to the European trade union response to the ongoing debate at EU level on restructuring and employment[2].

EPSU’s contribution to the TRACE project started in 2005 and ran until Autumn 2006. It is entitled “Decentralisation in public services: a case of public sector restructuring”. The main focus is on the implications of decentralisation of public services for collective bargaining, working conditions, employment and quality of public services. It has been developed within the EPSU’s National and European Administration and Local and Regional Government Committees, building up a group of 40 union representatives from 20 European countries (including EU, EEA and candidate countries). The network has worked together in 3 workshops in Oxford, Berlin and Brussels.  Reports and other material from these workshops can be consulted at

The term decentralisation is taken in its widest sense, meaning shifts of responsibilities (political, administrative, fiscal) between central and regional/local levels of government.  Decentralisation is not a new phenomenon but has taken on a new momentum in many countries over the past years, with both old and new EU Member States increasingly engaged in a double process of European integration, outside their borders, and decentralisation within their borders.  While decentralisation is usually presented as a positive reform to bring public services closer to people’s needs our findings are more mitigated: in most cases improving the quality of public services is not the main driver of current decentralisation reforms. In some countries decentralisation has become a euphemism for privatisation, outsourcing and lack of accountability.

Indeed, in a context of budgetary constraints and growing needs for more and better services, decentralisation, when not supported by appropriate resources, can increase the risks of outsourcing, territorial fragmentation, and lead to poorer employment conditions and/or quality of services. Trade unions – and citizens – are inadequately informed and consulted prior to the reforms despite consequences on employment and working conditions, trade union organisation, as well as on the quality of public services.  A somewhat paradoxical conclusion is that decentralisation requires an overall framework at national level defining, coordinating and safeguarding public service objectives and standards, financial redistribution mechanisms, users and workers’ rights.  We would also argue that the growing impact of the EU internal market on public services and administrations reinforces the need for a positive regulatory framework on public services at EU level. Such frameworks need to be democratically agreed involving trade unions and citizens and allowing for local specificities.

This case study on decentralisation for trade unions in local, regional and national government draws on these discussions. It includes information on the way EU policies impact, directly or indirectly, on public services and public administrations, the meanings, drivers and effects of decentralisation and trade union rights. It makes recommendations on the way decentralisation should indeed improve public services and not be driven by short-term political or financial expediency.  Country case studies collected during the project illustrate some of the challenges we are facing, and these are appended to the handbook.

We hope that our findings will bring visibility in the EU debate on restructuring to the constant reforms taking place in the public sector and highlight the way public services can play a central role in providing sources of growth and employment.  Such visibility is all the more necessary given that Member States, encouraged by the EU, are moving away from being providers of public services to regulators of such services.  In this new role the State’s core functions such as redistributing wealth, protecting not only economic freedoms but also political and social rights, and ensuring territorial cohesion are being challenged.  And now we see that the regulatory capacity of Member States (including local and regional authorities) to impose public service obligations on private companies is also challenged, e.g., through the draft Services directive. A new balance of power in Europe is urgently needed that takes into account the European dimension and the requirements for proximity to citizens.     

Through this case study we also seek to underscore that change needs planning, time, resources, well-defined objectives to serve the general interest and information and consultation of workers and citizens. 

We thank all members of the trade union network for their valuable contributions throughout the project, Harald Kielmann, director of Ver.di’s education centre-Bildungsstätte Mosbach, for his unfailing support and training skills throughout the project and Mercè Kirchner Baliu from the European Institute of Public Administration-European Centre for the Regions (EIPA-ECR) who was involved as external expert in two of the three workshops.

Additional information on decentralisation can be found on an online TRACE network server (available from the EPSU website), which will be updated after the completion of the project to continue the debate on restructuring in the public sector.

[1] European Trade Union Institute for Research, Education and Health and Safety attached to the ETUC.ETUC.

[2] Communication on restructuring and employment, Commission, March 2005

For the full study in EN - FR - DE 

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