Spain

Local Responsibilities and Public Services in Spain: An Introduction

Silvia Díez Sastre, Instituto de Derecho Local, Universidad Autónoma de Madrid

Responsibility Allocation System

State and autonomous region statutes confer powers to local entities in a wide range of matters. The Law of the Basis of the Local System (LBRL) ensures that these powers are related to a list of important action fields, such as urban planning, urban environment, water supply and sanitation services and collective transport, among others. In addition, this act sets up a limit to this allocation of powers: the possible duplication of responsibilities in different tiers of government (Article 25). Alongside this regulation, the LBRL (Article 26) requires municipalities to offer a list of services, which varies according to the number of inhabitants (less than 5,000, more than 20,000 and more than 50,000). In municipalities with less than 20,000 inhabitants, the provinces must coordinate the provision of some services, such as waste collection, water supply and sanitation services and street lighting. The number of inhabitants is an important difference that could be drawn between urban local governments (ULGs) and rural local governments (RLGs), considering that RLGs in Spain are significantly smaller than ULGs.

Local governments have a limited influence on the design of this responsibility allocation system. Capital cities usually play an important role in the policy-making processes of other tiers of government. So does the Spanish Association of Municipalities and Provinces (Federación Española de Municipios y Provincias, FEMP), which is the only and most important association of its kind, representing both ULGs and RLGs. Statutes often provide for the participation of this Association in different decision-making processes.

Forms of Public Service Management and Delivery

The Local Government Act lists several forms of public service management and delivery (Article 85 LBRL). On the one hand, there are modalities of direct service delivery, in which services are provided by the local government itself or by an entity (of a public or private legal nature) fully owned by the municipality alone or together with other municipalities or local authorities (in 2018 there were 4,331 of these entities); on the other hand, local governments can enter into public contracts by awarding service contracts or concessions governed by the Public Contracts Act (2017) (hereinafter LCSP) – these are always characterized as indirect service delivery forms.

When regulating these mechanisms of public service management, the LBRL makes no distinction between ULGs and RLGs. But there are important differences in practice. RLGs are usually smaller than ULGs and have fewer human and material resources. Therefore, they are less capable of delivering public services on their own. In these cases, inter-municipal cooperation plays a very important role and so does the assistance role of the provinces helping RLGs rendering services. In both scenarios it is possible to create an inter-municipal cooperation scheme (mancomunidad); and/or to set up a new body, like a public company (jointly controlled by different municipalities or controlled by the province). Nevertheless, RLGs tend to prefer the first option, entering into agreements to establish inter-municipal cooperation schemes aimed at providing particular public services (i.e., waste collection, water supply). As for the ULGs, it is important to highlight the wave of remunicipalization processes that took place during the economic crisis (for instance, water supply in the City of Valladolid). Distrust of private contractors prompted a process of contracting-in certain public services in some municipalities (usually with left-wing governments). However, many of these attempts were frustrated because of the high transition costs and the legal and economic difficulties.

With regard to indirect service delivery, ULGs and RLGs are subject to the same legal provisions established in the LCSP. Smaller RLGs tend to resort to the general assistance of the province, as well as to the provincial centralized purchasing systems and those of the Spanish Association of Municipalities and Provinces (Federación Española de Municipios y Provincias). By doing that, they somewhat lose control over the contract awarding procedure.

References to Scientific and Non-Scientific Publications

Cidoncha Martín A, ‘La garantía constitucional de la autonomía local y las competencias locales: un balance de la jurisprudencia del Tribunal Constitucional’ (2017) 45 Cuadernos de Derecho Local 12

Huergo Lora A, ‘La prestación de los servicios públicos locales’ (2019) 6 Documentación Administrativa. Nueva Época 129

López de Castro García-Morato L, ‘Formas de gestión de los servicios públicos locales’ in Francisco Velasco Caballero (ed), Tratado de Derecho Económico Local (Marcial Pons 2017)

Velasco Caballero F, ‘Juicio constitucional sobre la LRSAL: punto final’ (2016) 10 Anuario de Derecho Municipal 21

Local Financial Arrangements in Spain: An Introduction

Francisco Velasco Caballero (coord), Félix D Laguna Martínez, César Martínez Sánchez, Félix Vega Borrego, Diego Marín-Barnuevo Fabo, Ester Marco Peñas, Instituto de Derecho Local, Universidad Autónoma de Madrid

General Structure

The Spanish local finance dimension represents the 6 per cent of the Spanish GDP, smaller than the countries around us (11,1 per cent of EU GDP). In terms of national accounts, local government expenditure accounts for 13,7 per cent of the total public expenditure. Regarding tax revenue (excluding social security contributions), local taxes represent 16.4 per cent of the total tax revenue.[1]

Local government financing in Spain is an exclusive competence of the state with hardly any involvement from autonomous communities (regions). However, some regions have established additional funds other than those considered here, thereby transferring part of their own tax revenues to local governments. These funds are of little and unequal relevance in qualitative terms.

Public Revenues

Local government financing is mainly based on taxes (52,9 per cent of its revenues), higher than the European average (38,1 per cent);^[2] the latter trend lends greater fiscal autonomy. The general transfers from the state budget to the municipalities cover a small part of their current income (22,2 per cent in 2015).^[3] Since the economic crisis in 2008, the differential growth of local taxes (31 per cent) with respect to general transfers from the state (2,1 per cent) is strengthened. The majority of the general transfers are unconditional transfers, from the Supplementary Fund for Financing (Fondo complementario de financiación – FCF) for the large municipalities (more than 75,000 inhabitants and provincial and autonomous communities’ capitals), and the Local Sharing of the state Revenues (Participación municipal en los ingresos del Estado – PIE) for the rest of the municipalities. One issue of the general transfers system is that the changes of population between municipalities are not reflected in the transfers from FCF. The latter does not occur in the case of transfers from PIE. The FCF is determined, for each budgetary year, taking into consideration the rise on state tax revenues between the system base year (2004) and the year concerned. The PIE is also based on the rise on state tax revenues, but once the total participation has been determined, the latter is distributed between the municipalities essentially taking into account three variables: population, average tax effort and the inverse of fiscal capacity.[4]

Tax System

Spain shows high shares of total taxes received by the non-central authorities (one of the highest in the EU together with Sweden, Germany, Belgium and Denmark), close to the 10 per cent of the total taxes^[5]. The local tax system is primarily based on actual taxes on property (in particular, Real Property Tax – Impuesto sobre Bienes Inmuebles – IBI) that, in some occasions, have little connection with the ability to pay of the concrete taxpayer. The taxes for the provision of services have a moderate position in the total amount of revenue collected.

Public Spending

The structure of the local expenditure is focused on the traditional municipal functions, having a lower relative weight regarding welfare state benefits (0.8 per cent of the GDP on social protection, health and education services, compared with 6.1 per cent in the EU). Since the entry into force of the current financing system in 2004 until 2015, the local public spending has increased by 31 per cent. The most significant items are: economy and commerce (112.2 per cent), population aging (88.4 per cent), general services (67.2 per cent), fire protection services (57.7 per cent), waste management (54 per cent), transport (42.9 per cent) and sports and leisure services (41.7 per cent), accounting for 46.1 per cent of total expenditures in 2015. The rise in public expenditure has been more pronounced in municipalities with less than 50,000 inhabitants. However, since the beginning of the crisis in 2008, the local public spending has decreased significantly (-7.7 per cent in terms of GDP), a substantial reduction exceeding those of EU countries (-1.8 per cent), while the income has grown at a faster rate (8.3 per cent). This decrease is mainly the result of a strict application of the national rules on budgetary discipline, such as the obligation of maintain a budgetary position close to balance or in surplus or the fulfillment of the expenditure benchmark (mandates set out in Article 135 of the Spanish Constitution and Articles 11(4) and 12, respectively, of Spanish Organic Law no 2/2012 on Budgetary Stability and Financial Sustainability).

References to Scientific and Non-Scientific Publications

Bosch Roca N, Espasa M and Montolio D, ‘Should Large Spanish Municipalities Be Financially Compensated? Costs and Benefits of Being a Capital/Central Municipality’ (2014) 211 Hacienda pública Española 67

Bosch Roca N and Suárez Pandiello J, ‘Politics and Finance in Spanish Municipalities’ (2015) 212 Hacienda pública Española 51

Echániz Sans J, ‘Los Gobiernos locales después de la crisis. Un Análisis de las Haciendas Locales en el período 2001-2016’ (Fundación Democracia y Gobierno Local 2019)

Marín Barnuevo-Fabo D (ed), Los tributos locales (2nd edn, Civitas Thomson-Reuters 2010)

Marín-Barnuevo D, ´Ingresos locales´ in Francisco Velasco Caballero (ed), Tratado de Derecho Local (Marcial Pons 2021)

Martínez Sánchez, C ´Gasto público local´, in Francisco Velasco Caballero (ed), Tratado de Derecho Local (Marcial Pons 2021)

Ministry of Finance, ‘Informe de la Comisión de Expertos para la Revisión del Modelo de Financiación Local’ (2017)

[1] Ministry of Finance, ‘Recaudación y Estadísticas del Sistema Tributario Español 2006 – 2016’ (2019) 100 and 107.

[2] Ministry of Finance, ‘Informe de la Comisión de Expertos para la Revisión del Modelo de Financiación Local’ (2017).

[3] See ibid.

[4] See report section 3.2. on Financing Rural Local Governments Faced with Ageing and Dispersion.

[5] European Commission, ‘Taxation Trends in the European Union. Data for the EU Member States, Iceland and Norway’ (2018).

The Structure of Local Government in Spain: An Introduction

Mónica Domínguez Martín (coord), Carmen Navarro, José María Rodríguez de Santiago, and Silvia Díez Sastre, Instituto de Derecho Local, Universidad Autónoma de Madrid

The number of local governments (municipalities) in Spain has slightly increased (around 0.2 per cent) along the last 40 years, since the first municipal elections of the democratic period took place. There are currently 8,131 municipalities but the reform for municipal consolidation (amalgamation) is not a salient issue in the political agenda in Spain. Although various attempts have been made in recent decades to encourage municipal mergers, all of them have failed. This explains why this option is not at the top of the current political agenda. In this failure, the strong identity factor proper to the municipalities in Spain has played a salient role.

Figure 2: Municipalities in Spain.

More than 80 per cent of the 8,131 Spanish municipalities have a very small size in terms of population, counting less than 5,000 inhabitants. In terms of population, 61 per cent of all municipalities in Spain have less than 1,000 inhabitants who account for only just over 3 per cent of the entire population of the country. In front of them, those with between 10,000 and 100,000 inhabitants (8.5 per cent of the total) and those of more than 100,000 (0.75 per cent) concentrate 80 per cent of the entire Spanish population (40 per cent each group). Given the technical and economic limitations of the small municipalities to provide services autonomously, they are replaced or supplemented by the 50 provinces, which present a remarkable financial capacity.

Figure 3: Provinces in Spain.

In this context, inter-municipal cooperation plays a crucial role in local governance. It is usually based on inter-municipal agreements, which are bilateral or multilateral, and often lead to the establishment of inter-municipal institutions and associations, such as the mancomunidades (commonwealths) directly created by the municipalities. Inter-municipal cooperation is used in all its forms to profit from economies of scale effects and to prevent centralization of competences. Most Spanish municipalities cooperate in the field of water supply and treatment of waste water, as well as in garbage collection and waste disposal and many others, especially those of small sizes, in other services such as social policies.

Spain is a country with a high degree of urbanization, but concentrated in a very small territory. Despite the evidence of the metropolitanization process, the Spanish political/legal system has not responded to this phenomenon. The creation of metropolitan areas’ governments or formal coordination agreements is a responsibility of the autonomous communities that, in general, have decided not to promote their establishment. In fact, Catalonia as well as Galicia and Valencia show reluctance and ambiguity when facing the creation of strong metropolitan governments in, respectively, the cities of Barcelona, Vigo and Valencia.

References to Scientific and Non-Scientific Publications

Carbonell Porras E, ‘La alteración de términos municipales en la reforma local de 2013: crónica de un fracaso anunciado’ (2018) 9 Revista de Estudios de la Administración Local y Autonómica: Nueva Época 5

Navarro C, and Pano E, ‘Rural and Urban Sub-Municipal Governance in Spain: The Contrasting Worlds of Lilliput and Brobdingnang’ in Nikolaos-Komninos Hlepas and others (eds), Sub-Municipal Governance in Europe. Governance and Public Management (Palgrave Macmillan 2018)

Orduña Prada W, ‘La planta local’ in Francisco Velasco Caballero (ed), Tratado de Derecho Municipal (Marcial Pons 2020)

Santiago Iglesias D, ‘Provincia, comarca y área metropolitan’ in Francisco Velasco Caballero (ed), Tratado de Derecho Municipal (Marcial Pons 2020)

Velasco Caballero F, ‘La planta local de España: criterios para la toma de decisiones’ (2010) 4 Anuario de Derecho Municipal 25

Intergovernmental Relations of Local Governments in Spain: An Introduction

Alfonso Egea de Haro (coord), Julia Ortega Bernardo, Carmen Navarro, José María Rodríguez de Santiago, Silvia Díez Sastre, Instituto de Derecho Local, Universidad Autónoma de Madrid

General Framework of Intergovernmental Relations

Despite the fact that in the Spanish political system municipalities precede the creation of other territorial entities (i.e. autonomous communities), their sphere of competences is decided by the laws of the state and, to a lesser extent of the autonomous communities. The Spanish Constitution (Article 137) establishes the principle of local autonomy although with no further specification or delimitation of competences.

This top-down configuration of the local autonomy affects not only the competences of municipalities but also the intergovernmental relationships, both horizontal cooperation among municipalities and vertical coordination and cooperation between municipalities and other territorial entities (provinces, autonomous communities and the state).

The horizontal cooperation between municipalities is frequently channeled by the creation of single-purpose entities (i.e. the so-called mancomunidades or commonwealths) to provide public services, most frequently those related to environmental and social policies (e.g. waste management, social assistance). The Law of the Basis of the Local System (LBRL) of 1985 establishes formal requirements in the process of constitution of mancomunidades, leaving municipalities to define the scope and internal organization (Article 44 LBRL).

As for the vertical intergovernmental relationships, the LBRL refers to the principle of ‘institutional loyalty’ by which each level of government (state, regional and local) is supposed to cooperate with the others and not interfere in the legitimate exercise of other levels´ competences. Therefore, vertical cooperation is understood as administrative assistance without compromising each level of government´s competence. The cooperation between levels of government is made on a voluntary basis. In addition, upper levels of government (the state and the regions) may coordinate the action of municipalities to guarantee coherence and according to the subsidiarity principle (Article 58 and 59 LBRL).

Control and Supervision of the Local Government

Generally speaking, the Spanish current local government system includes very limited supervision or control on municipal and provincial activity by the state and the autonomous communities. The Constitutional Court has ruled that the local autonomy principle under the Spanish Constitution (Article 137) excludes governmental controls to a great extent. The LBRL replaces state and regional controls on local governments with a complex system of intergovernmental relations based on the idea of full respect for the powers of local jurisdictions and the principle of cooperation. Basically, the LBRL establishes legal instruments to prevent conflicts between state and autonomous communities on one hand, and local authorities on the other, while obliging local governments to share information with supra-local authorities. To prevent or resolve conflicts of authority, the law promotes the ‘free cooperation’ of public administrations, either in the form of agreements or by participation in collaborative bodies, and by encouraging local level administrations to participate in the decision-making processes.

The most important control on the local governments is performed by the judicial branch (i.e. administrative courts). The inter-administrative litigation regarding local issues is abundant. All municipalities and provinces must communicate the decisions and by-laws adopted to the autonomous communities and the state. In case of infringement, both the autonomous communities and the state may require local governments to accommodate local decisions to the laws, or alternatively and directly bring the case before the administrative courts. The judicial proceedings deal with the legal correctness of local authorities´ decisions and not with the political opportunity or necessity of adopting specific measures at the local level.

Despite the fact that local government action is controlled through the judicial branch of the government, there are also some cases of administrative supervision by regional or state authorities, as directly foreseen by sector-specific laws. This is the case of land use and urban planning policy where the approval of municipal land use plans requires the regional government´s approval. This type of supervision is usually channeled through cooperative administrative procedures.

References to Scientific and Non-Scientific Publications

Ballesteros Moffa LA, ‘La Cooperación Institucional’ (2006) 1 Revista Jurídica Castilla y Leon 97

Carballeira Rivera MT, ‘La Cooperación Interadministrativa en la LBRL’ (1993) 257 Revista de Estudios de la Administración Local y Autonómica 45

Cuesta-López V, ‘Intergovernmental Cooperation and Social Policies in the State of the Autonomies: The Institutional Framework for the Governance of the Dependent Care’ in Alberto López-Basaguren and Leire Escajedo San Epifanio (eds), The Ways of Federalism in Western Countries and the Horizons of Territorial Autonomy in Spain (Springer 2013)

Velasco Caballero F (ed), Gobiernos locales en estados federales y descentralizados: Alemania, Italia y Reino Unido (Institut d’Estudis Autonòmics 2010)

Vilalta Reixach M, ‘Nuevas Formas De Participación De Los Entes Locales: El Consejo De Lo Gobiernos Locales’ (2006) 2 Revista D’Estudis Autonòmics i Federals 225

People’s Participation in Local Decision-Making in Spain: An Introduction

Carmen Navarro (coord), Juan Antonio Chinchilla, Mónica Domínguez, Moneyba González and Alfonso Egea, Instituto de Derecho Local, Universidad Autónoma de Madrid

The 1978 Spanish Constitution created a legal context that favors citizen participation. Under Article 9(2), all public authorities (and thus local governments) should ‘facilitate the participation of all citizens in political, economic, cultural and social life’ and Article 23(1) provides, as a fundamental right, (i.e., enforceable before a court of law, including the Spanish Constitutional Court) that citizens are entitled to ‘participate in public affairs, directly or through representatives’.  In compliance with the constitutional provisions, the Spanish Local Government Act (Act 7/1985, of April 2, LBRL) lays down a set of guarantees and procedures ensuring public participation at a local level and currently displays three sets of legal provisions regarding citizen participation. First, the so-called ‘open council’ or ‘town meeting’ (concejo abierto), a form of local government for small municipalities (usually not exceeding 100 people) where citizens gather in an assembly to rule the town (Article 29 LBRL). Second, Article 18(1)(b) LBRL expressly grants the enforceable right ‘to participate’ to all residents. Third, this same act also provides for several mandates addressed to local governments with the aim of promoting citizen participation (Articles 69 to 72 LBRL).

In sum, national and regional provisions have created a legal framework favoring citizen participation. However, these legal provisions often fail to implement tools and mechanisms to make such public participation effective. For a country like Spain where levels of social capital and citizens’ involvement in public affairs are rather low, it is up to each municipality to implement strategies that make peoples participation effective. Actually, there are major differences between municipalities that simply allow for participation, yet they do not facilitate it or purposefully promote it and others that facilitate it and promote an inclusive participation. Differences can be explained by factors such as the availability of resources in place, a municipality’s social fabric or the political orientation of the municipal government.

Recently, the presence of new political parties in municipal councils during the 2015-2019 period (classified as ‘alternative left’, such as Podemos), has reinvigorated participation in those municipalities ruled by them (including major Spanish cities like Madrid, Barcelona, Valencia or Zaragoza) emphasizing the importance of open and inclusive decision-making mechanisms and putting them in place.

These local strategies can take several forms but they respond to one of the two main types of participatory logic: people’s participation is either implemented through permanent institutions or through processes open to all citizens. In both cases, the impact and results of citizens’ participation (i.e. level of citizen information on the projects, transparency in policy making, political accountability) is an open question to be analyzed.

As the most relevant example of the first strategy, we find the so-called advisory boards or advisory councils (consejos consultivos). They can be either sectoral (engaging public and private actors in connection with a sector or sector-specific policies: the elderly, culture, sports or education, among others) or territorial (the actors engaged and the interests at stake revolve around a given district or neighborhood). These advisory boards are the oldest and most commonly used participation mechanisms in local governments in Spain. Despite their little media visibility (they are somewhat overshadowed by the new forms of online citizen participation, popular consultations or participatory budgeting), they are probably the main form of dialogue between governments and organized groups. Some of the municipal councils that took office in 2015 are drawing up plans to reinvigorate and activate advisory boards. Madrid, for instance, is turning them into bodies more open to citizens and not only to the associations’ representatives.

In the second type, we find strategies like local referendums and public consultation processes in local planning. Concerning referendums, they are hardly held in Spain due to its regulation, that requires the national government’s prior authorization, thereby subjecting this participation initiative to stringent procedural requirements unparalleled in other legal systems. But public consultations have experienced a remarkable increase recently. They have typically played a prominent role regarding two areas: urban planning and local budgeting, but there are also other fields where these consultations are carried out, including participatory budgeting.

In addition to this, recent legal provisions (local, regional and national) have regulated bottom-up citizen participation, under which citizens directly submit proposals to municipal councils regarding specific measures or public policies. For this type of initiative, a qualified majority of voters (at least 10 per cent in municipalities exceeding 20,000 people) are entitled to submit specific proposals to the local government, which must be subsequently voted in the municipal assembly. Due to its legal complexity and demanding requisites, this form of bottom-up participation has been barely used so far.

References to Scientific and Non-Scientific Publications

Arnstein S, ‘A Ladder of Citizen Participation’ (1969) 35 Journal of the American Planning Association 216

Fernández Martínez JL, ‘Instituciones de democracia participativa a nivel local: características e impacto de las propuestas participativas sobre políticas públicas’ (2016) 8 Anuario de Derecho Municipal 144

Velasco Caballero F and Navarro Gómez C, ´The New Urban Agenda and Local Citizen Participation: The Spanish Example´ in Nestor Davidson and Greeta Tewari (eds), Law and the New Urban Agenda (Routledge 2020)

Gunther R, Gibert JRM, Montero JR, Botella J and Corral JB, Democracy in Modern Spain (Yale University Press 2004)