Sweden

Sweden - Monitoring report

Date of the monitoring visit: from 23 to 25 September 2013
Report adopted on: 2 April 2014

This is the second report concerning the monitoring of local and regional democracy in Sweden since 2005. It expresses satisfaction that Sweden, which has a powerful local government system, on the whole complies with the provisions of the European Charter of Local Self-Government. It welcomes the newly established principle of proportionality in the Swedish constitution which aims to ensure that restrictions in local self-government do not exceed what is necessary, and the granting of regional development competences to many county councils. It underlines the fact that Sweden has managed to shelter the local budgets from any cuts during the economic crisis. The report notes, on the other hand, that local authorities in Sweden also face challenges which need to be solved through close consultation between local and central authorities on subjects that include the limitations put on local authorities by detailed state regulations, the problems created by the non-indexation of state grants and by the insufficient involvement of local authorities in the estimation of cost implications of new state legislation concerning the local level.

 

The report recommends that Swedish authorities introduce the principle of subsidiarity into the Swedish constitution, in addition to the principle of proportionality, to ensure that the division of powers between the State and the local authorities remains in conformity with the Charter, in law and in practice. It invites the Swedish authorities to index state grants and to link them to demographic changes, and to allow local authorities stronger involvement in the estimation of cost implications of new state legislation concerning them. It encourages the authorities to consider the benefits of setting up a formalised system of consultation which is regulated by law. Finally, it invites the authorities to ratify Protocol No. 3 to the European Outline Convention on Transfrontier Co-operation between Territorial Communities or Authorities concerning Euroregional Co-operation Groupings (ECGs) (ETS No. 206).

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Article 2
Constitutional and legal foundation for local self government - Article ratified

The principle of local self government shall be recognised in domestic legislation, and where practicable in the constitution.


The requirement of a constitutional foundation for local self-government had been fulfilled in Sweden before the constitutional revision took place in 2011. The Instrument of Government from 1974 stipulated already in its Chapter I, Article 1 that Swedish democracy is realised through a representative and parliamentary form of government and through local self-government. With the introduction of Chapter 14 in the Instrument of Government, the constitutional protection of local self-government has been further strengthened. Article 2 of Chapter 14 clarifies that not only activities of local authorities in their own sphere of competences but also delegated competences in special legislation are based on the principle of local self-government.

 

The Local Government Act (1991) is the main legislative text governing local authorities in Sweden which are the municipalities and county councils. The local authorities manage a very substantial share of public affairs (approximately 75 %) which raises the question of whether they have full autonomy as foreseen by Article 3 para. 1 of the Charter, which stipulates that they should manage a substantial share of public affairs “under their own responsibility”. More and more detailed state regulations and “rights” legislation intervene in local authorities’ regulation of their own affairs. The Government, however, maintains that the state regulations are not detailed to such an extent that they infringe on the autonomy of local authorities.

 

The requirement of Article 3 para.2 of the Charter is fully implemented in Sweden. Municipalities and county councils are governed by elected assemblies, the municipal council and the county council respectively. These bodies are elected in local elections, which is also based in the Constitution (RF 14:1) The executive bodies, the municipal executive board and the county council executive board are appointed by the assemblies to whom they are responsible.

 

Sweden complies with the provisions of Articles 2 and 3 of the Charter.

Article 3.1
Concept of local self government - Article ratified

Local self-government denotes the right and the ability of local authorities, within the limits of the law, to regulate and manage a substantial share of public affairs under their own responsibility and in the interests of the local population.


Consult reply indicated at article 2.

Article 3.2
Concept of local self government - Article ratified

This right shall be exercised by councils or assemblies composed of members freely elected by secret ballot on the basis of direct, equal, universal suffrage, and which may possess executive organs responsible to them. This provision shall in no way affect recourse to assemblies of citizens, referendums or any other form of direct citizen participation where it is permitted by statute.


Consult reply indicated at article 2.

Article 4.1
Scope of local self government - Article ratified

The basic powers and responsibilities of local authorities shall be prescribed by the constitution or by statute. However, this provision shall not prevent the attribution to local authorities of powers and responsibilities for specific purposes in accordance with the law.


According to Article 2 of the new Chapter 14 of the Local Government Act, local authorities are responsible for local and regional matters of public interest based on the principle of local self-government. The basic powers and responsibilities of local authorities are laid down in the Local Government Act or in special laws issued by the Parliament. 75 % of the public services have been devolved to the local level by law.

 

The question of whether the principle of subsidiarity is applied to the division of powers and competences in law and in practice in conformity with the Charter has been addressed already in the general part of this report. There is no specific provision in the Swedish law which stipulates that local tasks should be performed at local level. Article 3 of Chapter 14 of the Swedish constitution introduces the principle of proportionality. It stipulates that all new legislation that may affect local self-government should be examined, to ensure that the reasons for the intended regulation justify the possible intrusion into local self-government that the regulation would entail.

 

A proportionality control mechanism was established by extending the mandate of the Council of Legislation (Lagradet) to scrutinise any act of law involving the obligations of local authorities. (Chapter 8, Article 21). Whether this newly established principle of proportionality will provide a legal safeguard to protect the principle of local self-government will mainly depend on its application in practice and its interpretation by the Council of Legislation. However, to counter trends to centralise local tasks, a constitutionally guaranteed principle of subsidiarity seems to be the best solution.

 

The powers of local authorities should be “full and exclusive” and local authorities should be allowed discretion in adapting their exercise to local conditions. Detailed state regulations in Sweden limit the autonomy of local authorities increasingly.

 

In the Swedish practice, consultation between central and local authorities in the planning and the decision-making process is carried out through participation in the preparation of legislation in government committees and through the consultation procedure following the publication of reports by such committees. This type of consultation is well established and based on informal procedures. There is the so-called “referral system” before a bill of legislation is presented to the Parliament. This procedure is based on a government act which stipulates referrals to a group of interlocutors including municipalities and county councils. This need not always be SALAR. It can be a specific county council or municipal council depending on the subject matter. The time frame for submitting an opinion was described as “problematic” by some interlocutors because they are sometimes very short. A new regulation has been added in the Instrument of Government (RF 7:2) stipulating that, in preparing government business, the necessary information and opinions from the public authorities concerned should be requested. It is true that this provision now puts on the Government the obligation to ask for information from local authorities. However, although it codifies the previous practice, it does not regulate a time frame for contributions from the local level, which has often been too short in the past. The Government contends that the time frame is normally three months and can be prolonged. The rapporteurs take note that in practice deadlines can vary and consider that a revision of the legislation to provide for an adequate period of time for the consultation process would be appropriate.

 

Another aspect of possible infringements on local self-government through EU legislation needs to be considered in Sweden. With the entry into force of the Lisbon Treaty, national parliaments have been given the task of carrying out subsidiarity checks. Currently, there is no legislation in force which provides for a formalised procedure to give communes and county councils the possibility to participate in the assessment of whether EU legislation is in breach of the principle of subsidiarity or whether it infringes on local self-government. The Government has considered the existing form of consultations between central government and local authorities to be sufficient (Govt. bill 2009/10:175). The Riksdag carried out an inquiry into how subsidiarity checks were to be carried out under the Treaty and came to the same conclusion as the Government, i.e. that no formal procedure was necessary.

 

In the rapporteurs’ opinion Swedish law and practice in general complies with the provisions of Article 4. As regards the issue of detailed state regulations limiting the autonomy of local authorities, the rapporteurs consider that there is a risk of infringement which can however be overcome through close consultation between local and national authorities.

Article 4.2
Scope of local self government - Article ratified

Local authorities shall, within the limits of the law, have full discretion to exercise their initiative with regard to any matter which is not excluded from their competence nor assigned to any other authority.


Consult reply indicated at article 4.1.

Article 4.3
Scope of local self government - Article ratified

Public responsibilities shall generally be exercised, in preference, by those authorities which are closest to the citizen. Allocation of responsibility to another authority should weigh up the extent and nature of the task and requirements of efficiency and economy.


Consult reply indicated at article 4.1.

Article 4.4
Scope of local self government - Article ratified

Powers given to local authorities shall normally be full and exclusive. They may not be undermined or limited by another, central or regional, authority except as provided for by the law.


Consult reply indicated at article 4.1.

Article 4.5
Scope of local self government - Article ratified

Where powers are delegated to them by a central or regional authority, local authorities shall, insofar as possible, be allowed discretion in adapting their exercise to local conditions.

 


Consult reply indicated at article 4.1.

Article 4.6
Scope of local self government - Article ratified

Local authorities shall be consulted, insofar as possible, in due time and in an appropriate way in the planning and decision-making processes for all matters which concern them directly.

 


Consult reply indicated at article 4.1.

Article 5
Protection of local authority boundaries - Article ratified

Changes in local authority boundaries shall not be made without prior consultation of the local communities concerned, possibly by means of a referendum where this is permitted by statute.

 


Principles and procedures for changes in local authority boundaries are laid down in the Act Amending the Division of Sweden into Municipalities and County Councils (1979:11 reprinted as 1988:198). The Government has the power to decide on alterations of municipal boundaries through amalgamation or division of two or more municipalities or by incorporation of a part of a municipality into another.

 

This being said, the municipalities concerned need to be consulted and special account must be taken of their opinions. The law also requires that the public be consulted before deciding on a change of municipal subdivisions. This is usually done through a referendum, but can also be done through an opinion poll. If the government wants to change a municipality’s boundary, against the wishes of its inhabitants, the legislation requires that the government specify the reasons. However, ultimately the municipalities have no veto rights whereby they could oppose a decision to change their boundaries.

 

The municipal as well as the county councils may seek support from their electorate to express their adverse opinion against planned changes in boundaries by means of a referendum, an opinion poll or similar procedures as regulated in the Local Government Act and the Municipal Referenda Act (1994:692). It must be noted however that the outcome of a referendum or opinion poll is not binding on the Government. It is only indicative but can have a certain weight in terms of political impact.

 

Provided the required consultation complies with the “in due time and in an appropriate way” stipulations of the Charter, Sweden is in compliance with Article 5 of the Charter.

Article 6.1
Appropriate administrative structures and resources for the tasks of local authorities - Article ratified

Without prejudice to more general statutory provisions, local authorities shall be able to determine their own internal administrative structures in order to adapt them to local needs and ensure effective management.


The Local Government Act prescribes in Chapter 3 that each municipality and each county should have one decision-making body, which is the elected assembly. The Municipal Assembly as well as the County Council Assembly must appoint the Executive Committee (Kommunstyrelsen/landstingsstyrelsen). Otherwise local authorities may determine their own internal administrative structures and appoint any other Standing Committees (Nämnder) needed, in addition to the Executive Committee, for the discharge of their duties.

 

These provisions, giving local authorities the required freedom to determine their own internal administrative structures and their functions and resulting in a great variation of institutional structures at local level, are in compliance with the Charter.

Article 6.2
Appropriate administrative structures and resources for the tasks of local authorities - Article ratified

The conditions of service of local government employees shall be such as to permit the recruitment of high-quality staff on the basis of merit and competence; to this end adequate training opportunities, remuneration and career prospects shall be provided.


Consult reply indicated at article 6.1.

Article 7.1
Conditions under which responsibilities at local level are exercised - Article ratified

The conditions of office of local elected representatives shall provide for free exercise of their functions.


Under the Local Government Act (Chapter 9) an audit scheme was established at the municipal as well as at county council level. The auditors are appointed by the council and are independent in reviewing the activities of the board, committees and the administration. “The auditors inspect whether the activities have been carried out in an appropriate and financially satisfactory way and whether the accounts are true and fair and whether the internal checks carried out within the committees are sufficient” (section 9). The elected auditors are assisted by experts and carry out their function according to generally accepted auditing standards called “good auditing”.

 

The County Administrative Boards (CABs) and central government agencies are commissioned by the government to supervise municipalities and county councils for compliance with the laws and regulations. The areas where oversight is exercised extensively are environmental protection, social services and education. Different monitoring instruments are used such as evaluations, inspections, bench-marking systems and follow-ups.

 

Given the above, the Swedish supervision system can be said to be in compliance with the Charter.

 

The rapporteurs recall, nevertheless, that concerns were raised by some interlocutors, notably on the trend towards harmonisation of standards regarding the services provided by local authorities, to the detriment of justifiable local differences. The concern here is that too strict a harmonisation may restrict local autonomy. In addition, according to SALAR central government agencies such as the National Board of Health and Welfare and the Swedish Work Environment Authority, within the framework of their supervision, provide regulations which can be contradictory and in certain cases also reach beyond their competence.

Article 7.2
Conditions under which responsibilities at local level are exercised - Article ratified

They shall allow for appropriate financial compensation for expenses incurred in the exercise of the office in question as well as, where appropriate, compensation for loss of earnings or remuneration for work done and corresponding social welfare protection.


Consult reply indicated at article 7.1.

Article 7.3
Conditions under which responsibilities at local level are exercised - Article ratified

Any functions and activities which are deemed incompatible with the holding of local elective office shall be determined by statute or fundamental legal principles.


Consult reply indicated at article 7.1.

Article 8.1
Administrative supervision of local authorities' activities - Article ratified

Any administrative supervision of local authorities may only be exercised according to such procedures and in such cases as are provided for by the constitution or by statute.


Consult reply indicated at article 7.1.

Article 8.2
Administrative supervision of local authorities' activities - Article ratified

Any administrative supervision of the activities of the local authorities shall normally aim only at ensuring compliance with the law and with constitutional principles. Administrative supervision may however be exercised with regard to expediency by higher-level authorities in respect of tasks the execution of which is delegated to local authorities.


Consult reply indicated at article 7.1.

Article 8.3
Administrative supervision of local authorities' activities - Article ratified

Administrative supervision of local authorities shall be exercised in such a way as to ensure that the intervention of the controlling authority is kept in proportion to the importance of the interests which it is intended to protect.


Consult reply indicated at article 7.1.

Article 9.1
Financial resources of local authorities - Article ratified

Local authorities shall be entitled, within national economic policy, to adequate financial resources of their own, of which they may dispose freely within the framework of their powers.


What was already guaranteed in the Swedish Constitution (Chapter 1, Section 7/2) before 2011 has now been shifted to the new Chapter 14 in the Instrument of Government which stipulates in its Article 4 that local authorities may levy taxes for the management of their affairs.

 

The majority of local revenues (about 70 %) are derived from local taxes. Municipalities and county councils have the same tax base, namely taxable incomes from salaries, wages and taxable transfer payments (for example pensions, payments from health insurances and unemployment benefits). Each local authority currently decides independently its own tax rate. However, the national Parliament has the power to decide the level of local taxation (tax capping), a provision which is not in operation now but could be activated at any point in future.

 

SALAR has informed the rapporteurs that the Congress recommendation inviting the authorities to clarify the local authority’s power of taxation has not been met but SALAR does not find it necessary to bring the question back to the table. In the 1990s and during the financial crisis, the Parliament decided to make temporary restrictions on the right of municipalities to raise their rate. The Council of Legislation criticized the then government's proposal and questioned whether it was compatible with the Constitution. The introduction of the principle of proportionality in 2011 might pave the way in favour of local autonomy in this field.

 

State grants constitute about 16 % of the revenues, are nominally fixed and decrease in real terms through inflation. They are also not linked to demographic changes. In 2012 general government grants amounted to approximately 82 billion SEK and grants for specific purposes to approximately 49 billion SEK (Govt. communication 2012/13:102 p.11). In 2012 earmarked grants corresponded to an average 6% of revenue for the municipalities and 9 % for the county councils. Further revenues are fees charged for some of the services provided at local level.

 

The so-called “funding principle” is applied since 1993 in relation to new compulsory state regulations concerning the municipal sector. Financial compensation for mandatory tasks entails an impact assessment ex ante, is calculated as a lump sum and is allocated through general or earmarked grants to the municipal sector on a per capita basis. In the Budget Bill for 2014, the Government recognised the problem that regulations by independent government bodies that do not entail new legislation are not covered by the funding principle and that there is a need for guidelines on how to apply this principle.

 

Local authorities in Sweden are currently not affected by the economic crisis and the global budgetary situation was described as rather good which is due to temporary circumstances. Net income in municipalities and county councils has reached the record level of 18 billion SEK in 2012, largely due to non-recurring revenue items. When AFA Försäkring insurance company returns the premiums (for health insurance) paid in 2005 and 2006 in December 2013. Net income will fall back to approximately 10 billion SEK in 2013 and it is expected to remain at that level until 2016, given the successive rises in government grants and an increase of 0.40 SEK in local government taxes compared to their present level.

 

The financial equalisation procedure is now based in the Constitution through Article 5 in the new Chapter 14 which stipulates that “according to law, local authorities may be obliged to contribute to costs incurred by other local authorities if necessary to achieve an equal financial base”. Changes were made, as of 1 January 2005 based on a 2003 report, combining the equalisation system and the government grants system into a mainly state-funded equalisation system. The system consists of five parts: 1) income equalisation, 2) cost equalisation, 3) a structural grant, 4) a transitional grant and 5) an adjustment grant/charge. The changes meant that significantly fewer municipalities and county councils became net contributors to the system. In 2013, eight municipalities are paying a charge of a total of 1.6 billion SEK and one county is paying a charge of 0.2 billion SEK. The State grants amounts to approximately 86 billion SEK. The Swedish Agency for Public Management is mandated to investigate and to follow up local government financial equalisation systems and to continuously propose updates.

 

A special cost equalisation system was introduced for municipalities under the Act concerning Support and Services for Persons with Certain Functional Impairments in 2004 and changed with effect from 2009. The reason given for setting up an equalisation system was that there are major cost differences between municipalities and equalisation is needed to put all municipalities on an equal financial footing to provide services under the Act. Similarly, a special government grant provides for cost equalisation separate from the regular equalisation system for county councils for paying for pharmaceutical benefits.

 

The rapporteurs would like to mention here the situation in Flen, where costs have gone up in social welfare particularly due to the arrival of a proportionally high number of refugees increasing integration costs (2000 refugees in a town of 16 000 inhabitants).  They heard from the councillors and the Mayor that the financial equalisation system does not take into account the issue of refugee influx sufficiently. They claimed that Flen, which has a decreasing population and high unemployment rate (among youth and migrants), suffers from the lack of centrally coordinated  planning of refugee integration which creates problems for a small town the size of Flen, with increased social security, education and housing costs, without adequate and rapid compensation from the State. 

 

The local government tax base is to some extent sensible to fluctuations in employment and economic growth. A bill on local government balancing funds, applicable as of 1 January 2013, strengthens the possibilities for municipalities and county councils to create municipal equalization reserves. They can now accumulate profit equalisation reserves within the framework of their own capital to cover deficits that may arise as effects of cyclical variations or regression. The rule applies retroactively, so profits can be set aside from 2010 onwards, although the actual decision cannot be made until the end of the 2013 fiscal year.

 

Sweden is a rare case among European countries in that the majority of local revenues are derived from local taxes and that with a ratio of 70%. It is also a rare case in that local authorities have not been affected by the economic and financial crisis at all. The financial equalisation system is enshrined in the law and works well.

 

The rapporteurs are of the opinion that, all in all, Sweden complies with the provisions of Article 9 of the Charter.


The following data are taken from the Economy Report on Swedish municipal and county council finances – October 2012, Swedish Association of Local Authorities.

Article 9.2
Financial resources of local authorities - Article ratified

Local authorities' financial resources shall be commensurate with the responsibilities provided for by the constitution and the law.


Consult reply indicated at article 9.1.

Article 9.3
Financial resources of local authorities - Article ratified

Part at least of the financial resources of local authorities shall derive from local taxes and charges of which, within the limits of statute, they have the power to determine the rate.


Consult reply indicated at article 9.1.

Article 9.4
Financial resources of local authorities - Article ratified

The financial systems on which resources available to local authorities are based shall be of a sufficiently diversified and buoyant nature to enable them to keep pace as far as practically possible with the real evolution of the cost of carrying out their tasks.


Voir réponse indiquée à l'article 9.1.

Article 9.5
Financial resources of local authorities - Article ratified

The protection of financially weaker local authorities calls for the institution of financial equalisation procedures or equivalent measures which are designed to correct the effects of the unequal distribution of potential sources of finance and of the financial burden they must support. Such procedures or measures shall not diminish the discretion local authorities may exercise within their own sphere of responsibility.


Consult reply indicated at article 9.1.

Article 9.6
Financial resources of local authorities - Article ratified

Local authorities shall be consulted, in an appropriate manner, on the way in which redistributed resources are to be allocated to them.


Consult reply indicated at article 9.1.

Article 9.7
Financial resources of local authorities - Article ratified

As far as possible, grants to local authorities shall not be earmarked for the financing of specific projects. The provision of grants shall not remove the basic freedom of local authorities to exercise policy discretion within their own jurisdiction.


Consult reply indicated at article 9.1.

Article 9.8
Financial resources of local authorities - Article ratified

For the purpose of borrowing for capital investment, local authorities shall have access to the national capital market within the limits of the law.


Consult reply indicated at article 9.1.

Article 10.1
Local authorities' right to associate - Article ratified

Local authorities shall be entitled, in exercising their powers, to co-operate and, within the framework of the law, to form consortia with other local authorities in order to carry out tasks of common interest.


For cooperation at local level the national legislation offers two formal solutions under public law: Statutory Joint Authorities or a Joint Local Government Committee. Municipalities and county councils may also cooperate in the form of companies under private law.

 

A Committee with representatives from the parties in the Riksdag has recently been given the task of looking into the current forms of local government cooperation and, where necessary, proposing new forms of cooperation (Swedish Government Official Reports (SOU) 2012:30. The committee considered that cooperation is an important tool for municipalities and county councils today and considered that the need for local government cooperation could be expected to increase in future. As for the forms of cooperation, no need was seen to create new public law bodies for cooperation. What was requested was more flexible and less formalised cooperation models.

 

The entitlement of local authorities to belong to an association for the protection and promotion of their common interests is fully guaranteed in Sweden. The Swedish Association of Local Authorities and Regions (SALAR) is both an employers’ organisation and a body that represents and advocates for local government in Sweden. Although membership is voluntary all of Sweden’s municipalities, counties and regions belong to this association. 

 

The rapporteurs consider that Sweden complies with the provisions of Article 10 of the Charter.

Article 10.2
Local authorities' right to associate - Article ratified

The entitlement of local authorities to belong to an association for the protection and promotion of their common interests and to belong to an international association of local authorities shall be recognised in each State.


Consult reply indicated at article 10.1.

Article 10.3
Local authorities' right to associate - Article ratified

Local authorities shall be entitled, under such conditions as may be provided for by the law, to co-operate with their counterparts in other States.


Consult reply indicated at article 10.1.

Article 11
Legal protection of local selfgovernment - Article ratified

Local authorities shall have the right of recourse to a judicial remedy in order to secure free exercise of their powers and respect for such principles of local self-government as are enshrined in the constitution or domestic legislation.


In its 2005 recommendation the Congress suggested that there should be a system of redress, referred to in the Constitution, to which the local authorities could turn in case of breaches of the principle of local self-government. It was proposed to establish a Constitutional Court which does not exist in Sweden. The question of whether a constitutional court should be established has been the subject of an inquiry and was dismissed by the parties in the Parliament (SOU 2008:125). It was argued, that there is a relatively broad political consensus in Sweden that such a court should not be established. Another proposal was to strengthen the position of local authorities’ vis-à-vis the Parliament by creating a parliamentary committee on local self-government. This proposal has been implemented by giving the Council of Legislation (Lagradet) the mandate to submit opinions on legislative proposals which impose an obligation on municipalities or county councils (Chapter 8, sections 20-22). The Council provides a way to ensure quality in new legislation. It also provides a window of opportunity to highlight conflicting interests between national and local levels in the application of the principle of proportionality.

 

The local authorities can turn to the Supreme Administrative Court if and when they consider that the funding principle has not been adhered to by laws attributing tasks to the local level. When a local government goes to court to challenge state legislation because of its financial implications, the court has to balance the individual rights of citizens or persons in general (foreigners) and the independence of local government. For example, the Supreme Administrative Court recently ruled in favour of a municipality in a number of cases concerning the right to compensation for costs for refugees (Judgment of 23 April 2013, case 3303-12).

 

Local authorities therefore have a right of appeal, which leads the rapporteurs to conclude that, from this point of view, Sweden complies with the provisions of Article 11 of the Charter.

ACCESSION

to the Council of Europe

RATIFICATION

of the European Charter of Local Self-Government

CONSTITUTION | NATIONAL LEGISLATION

The requirement of a constitutional foundation for local self-government had been fulfilled in Sweden before the constitutional revision took place in 2011.



30Ratified provision(s)
0Provision(s) with reservation(s)
0 Unratified Provision(s)
30Compliant Provision(s)
0Partially Compliant Provision(s)
0Non-compliant Article