Spain

Spain - Monitoring report

Date of the monitoring visit: from 5 to 8 June 2012 and on 14 January 2013
Report adopted on: 20 March 2013

This report on the situation of local and regional democracy in Spain follows up on Recommendation 121 (2002) and the two monitoring visits carried out on 5 to 8 June 2012 and 14 January 2013. The rapporteurs are satisfied that Spain is generally fulfilling its obligations with regard to the Charter and welcome the direct incorporation of the Charter into Spain’s national law, which enables legal interpretation by the domestic courts. They also note with satisfaction the regular working relationship between the Central Government and the FEMP, as well as the entry into force of the Law on budgetary stability and financial sustainability of public administration in 2012, which serves to reduce transfers of public resources and strengthen the capacity of public administrations to control their own expenses. However, the rapporteurs regret the overlap of competences among various government levels, which results in a loss of financial resources for local and regional authorities,  the inefficiency of the policies and measures with regard to the fiscal autonomy of municipalities, a situation which obliges local authorities to depend on state and regional transfers, and the large disparity in the salaries of local elected officials and the reduction of deputies’ allowances in regional parliaments.

 

The rapporteurs recommend that the Spanish authorities take concrete measures to eliminate the duplication of competences between different levels of government and ensure that each transfer of powers to local authorities is guaranteed by adequate financial resources, boost the fiscal autonomy of municipalities, with the aim of ensuring the sustainability of the financial situation of local authorities. The rapporteurs also recommend a revision of the legislation in order to fix a minimum and maximum threshold for remunerating local elected officials in accordance with the provisions of the Charter and, in the same spirit, to provide rules of remuneration for members of the parliaments of the Autonomous Communities, which will allow them to perform their duties properly. Lastly, they encourage the Spanish authorities to sign and ratify the Additional Protocol to the European Charter of Local Self-Government on the right to participate in the affairs of a local authority (CETS No. 207) in the near future.

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Article ratified Ratified with reservation Non ratified
Compliance Partial compliance Non compliance To be determined
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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 Spanish Constitution of 1978 explicitly recognises local self-government (autonomía local) but does not provide a definition of it. Section 137 identifies the basic local government units that are present in the country and recognises them as constituent parts of the State. The concept of “local autonomy” in Spain is difficult to summarise in a precise and detailed legal way. But different legal instruments are relevant: (a) the European Charter of Local Self Government (b) the Spanish Constitution; (c) the laws and regulations approved by the national and regional Parliaments and executives; (d) the case-law of the Spanish Constitutional Court; (e) the case-law of the Supreme Court. It is important to mention that the case-law of the Supreme Court and, especially, that of the Constitutional Court is an essential element of Spanish local government law. As the Constitution merely states general formulae as regards local autonomy one can perfectly support the proposition that the Constitutional Court is the ultimate recipient of the idea of local autonomy. Since 1981, the Court has issued key rulings in the field, and has built the actual constitutional concept of local autonomy. 
 

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.


The Spanish Constitution of 1978 explicitly recognises local self-government (autonomía local) but does not provide a definition of it. Section 137 identifies the basic local government units that are present in the country and recognises them as constituent parts of the State. The concept of “local autonomy” in Spain is difficult to summarise in a precise and detailed legal way. But different legal instruments are relevant: (a) the European Charter of Local Self Government (b) the Spanish Constitution; (c) the laws and regulations approved by the national and regional Parliaments and executives; (d) the case-law of the Spanish Constitutional Court; (e) the case-law of the Supreme Court. It is important to mention that the case-law of the Supreme Court and, especially, that of the Constitutional Court is an essential element of Spanish local government law. As the Constitution merely states general formulae as regards local autonomy one can perfectly support the proposition that the Constitutional Court is the ultimate recipient of the idea of local autonomy. Since 1981, the Court has issued key rulings in the field, and has built the actual constitutional concept of local autonomy.

 

The delegation is aware of the fact that Spain made only one declaration upon ratification of the Charter by stating that it does not consider itself bound by Article 3, paragraph 2 of the Charter, which declares that the system of direct election should be implemented in all local authorities falling within the scope of the Charter. This declaration reflected Spain’s view that the direct election principle should not be extended to the Provincial Councils (diputaciones), whose members are not directly elected by the voters.

 

The diputaciones, though a separate level of government, do indeed possess a distinct legal personality, and actually fulfil only responsibilities established by the law (at national and regional levels) assigned to the municipal level. In a way, the second tier system is justified by the fact that the diputaciones are not a direct expression of a territory’s population, but of its municipalities. Later on, further transformation of the legislation on diputaciones might be considered as a means of reorganising local government in order to cope with the financial crisis.

 

This being said and contrary to the prevailing situation in other Spanish autonomous communities, the parliaments of the provinces of the Basque Country are elected by a direct universal suffrage system. These parliaments, called juntas generales correspond to the three provinces of the Basque Country, namely: Álava, Vizcaya and Guipúzcoa

 

The rapporteurs will not comment on the compliance with Article 3.2 in this respect, since it was the subject to a reservation formulated by Spain when it ratified the Charter.

Article 3.2
Concept of local self government - Non 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 3.1

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.


Local self-government has been guaranteed by the Spanish Constitution. This guarantee protects both municipalities and provinces (Art.137), which are defined as local government formed by grouping municipalities and operating the territorial divisions required for the performance of state functions. The autonomous communities may set up other groupings of municipalities, and municipalities are entitled to form associations.

 

Municipalities have statutory powers to make regulations, levy taxes, adopt their budgets, draw up plans and programmes, and make use of expropriation. They have their own staff.

 

During the visit, the delegation was informed that neither the legislator nor the government have provided a mechanism to overcome the imbalance caused by the exercise of certain competences by local governments, which have traditionally intervened in a number of areas due to their proximity to the citizens and in response to their direct demands. These “competencias improprias” are not regulated by legislation and the provision of services that results from these competences is not fairly compensated; no economic resources are made available for their implementation. They concern personal services and physical environment services.

 

The present government has applied the slogan “one competence, one administration” to the first policy to reduce public expenditure, meaning that Spanish legislation must be modified not only according to the subsidiarity principle but also the “uniqueness” principle. Avoidance of a series of overlaps of remits with corresponding ones comprising different activities and distributed among different levels of government, is considered to be a crucial means to save public resources.

 

Under this policy, attention is now focused on the so-called “competencias improprias”. For many years, many municipios took on new powers not explicitly provided for by law (but nonetheless hitherto assumed to comply with Ley de base del regimen local: Article 2, the principle of the “right of intervention in every field concerning the circle of their own interests”), in order to meet the new needs of their citizens, or to fulfil de facto competencies delegated to the municipios on an ad hoc basis by the autonomous community (i.e. with an initial transfer of financial resources not confirmed in the following years).

 

The new proposed legislation aims at eliminating or at least greatly reducing this phenomenon. It will provide for a strict list of responsibilities classified either as “held in own right” competencias proprias or “delegated” (atribuidas por delegaciòn). The financial system will be assessed in order to guarantee these two kinds of responsibilities. That does not prevent the municipios from assuming responsibilities outside the list, but subject to two specific conditions: 1) when responsibilities held “in their own right” are sufficiently guaranteed; 2) when the assumption of a “non-standard” responsibility is in line with the constraints of the legislation on budgetary stability and financial sustainability of the municipio concerned.

 

In the current debate regarding structural reorganisation in Spain, political entities have expressed concern regarding on the one hand the issue of “competencias improprias” and on the other hand the overlap of competences. According to the 2012 report of the “Foundation on Progress and Democracy”, the overlap of competences in the public sector lead to an aggravated loss of 32 300 million euros per year, of which 26 108 million euros are to be covered by the autonomous communities and 6 211 million euros by local authorities. As concerns the problem of overlapping competences, considerable initiatives have been launched, at national, regional and local level.

 

Central government initiatives: Proposed by the Third Deputy Prime Minister and Minister of Territorial Policy and Public Administration, and adopted by the Council of Ministers on 4 March 2011, the "Resolution approving the programs and public policies” will be evaluated by the Agency for the Evaluation of Public Policies and Quality of Services in 2011. The Agency was to make a report on the possible elimination of duplication, overlap and inefficiencies of the autonomous communities. From information received, that report has not been yet published. Another central government initiative concerns the creation in October 2012 of a commission to reform public administration. Some of the aims of this Commission are to develop rationalisation measures, to eliminate administrative burden by simplifying rules and procedures and to avoid duplication. The Commission is attached to the Ministry of Finance and Public Administration, through the State Secretary of Public Administration (Secretaría de Estado de Administraciones Públicas).

 

Regional initiatives: The current economic crisis has spurred a number of initiatives in regional parliaments to improve local funding and to eliminate the overlap of competences, namely by reforming the statutes of the autonomous communities. Other examples include :

 

Catalonia: Motion on the liquidity and the financing of local authorities, dated 10 May 2011. The Plenary Assembly of the Parliament of Catalonia, at its meeting on 5 May 2011, approved Motion 19/IX "on liquidity and funding of local authorities" presented by the Parliamentary Group of Left Republicans of Catalonia,  with modifications from other groups;

 

Andalusia: Local laws. As local elected official informed the Rapporteurs during the visit, the regional government of Andalusia was a pioneer in establishing the "Local Laws" (LAULA and PATRICA) for their municipalities. These laws defined municipal powers and gave the Andalusian municipalities the possibility to receive a greater amount of unconditioned national funds;

 

Basque Country: Report on duplication and inefficiencies in Basque public administrations, from September 2011;

 

Madrid: Study Commission on duplicate powers. The Assembly of the Autonomous community of Madrid, in its special session on 12 July 2011, approved the agreement creating the "Study on duplicate powers between municipalities and Madrid to improve efficiency in the delivery of public services". This is an “ad-hoc” Commission, which held its inaugural meeting on 19 July 2011. In May 2012, the Opinion published by this Commission was approved, which should help to improve the efficiency of Madrid government. The rapporteurs were informed after the monitoring visit that the Assembly of the Autonomous community of Madrid passed a new law on 28 December making provision to remove these duplicate powers. A bilateral commission was established to start work thereon in January 2013.

 

Local initiatives: Local governments, either through their representative organisations or individually, have launched initiatives to study the issue of overlapping competences. The resolution adopted by the Spanish Federation of Municipalities and Provinces by the 10th General Assembly of FEMP on 24 September 2011 can be cited as an example.

 

While the measures related to the economic situation are only temporary, it is very difficult to establish whether the restrictions will affect standards of exercise of public responsibilities or public services. Conversely, if the objective is structural and permanent to reduction, action is foreseeable regarding the standard costs of public functions and services.

 

These initiatives are not in opposition to the provision of the Charter, and have the merit of establishing more clarity in the distribution of responsibilities. Nevertheless this policy could result in a reduction of local authorities’ capacity to adapt local government to the changing needs of their populations and in a reduction of autonomy: the decision to assume a new responsibility as regards “competencias improprias” could be subject to financial oversight (at national or regional level) possibly resulting in a ban on fulfilling these responsibilities. That outcome could somehow conflict with Article 4, paragraph 2 of the Charter: “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”.

 

One further element of concern is raised by the financial requirements for municipios to continue exercising the responsibility concerning “competencias improprias”. These requirements, according to a political rather than technical evaluation, could create a distinction between “rich” and “poor” municipios, with the former more abled to assume new responsibilities and the latter confined to strict observance of the list of responsibilities in their own right, established by (national or regional) law.

 

The Rapporteurs well understand the difficult situation created by the financial crisis. They nevertheless suggest, for example, that the Spanish government and the legislator create a financial system that can fully guarantee (at national and regional level) every municipio’s complete financing for the fulfilment of its “own right” and “delegated” responsibilities (this is the target already set for the proposed reform) and, at the same time, create a system of equalisation in order to transfer resources from richer to poorer municipios, so that all are rendered equally capable (as far as possible) of assuming responsibilities other than the listed ones.

 

As regards subsidiarity (Article 4, paragraph 3 of the Charter), this principle is clearly upheld in national law as a guiding principle for state and regional legislation assigning powers to local authorities, but it is not reflected in the same way in the statutes of the comunidades autónomas. Here again, some innovations have been introduced by the general provisions of the new Statutes, most of which explicitly adopted the principle (see in particular Article 84, paragraph 3 of the Statute of Catalonia, which directly links the principle to the Charter), but we must wait for the effective implementation of the principle in ordinary autonomous communities legislation.

 

The subsidiarity principle, however, implies a clear preference for the attribution rather than the delegation of competences to the municipios. In this respect, the texts provided to the Rapporteurs contain a long list of possible competences that can be given over to the municipios by either national or autonomous communities legislation. These concern matters normally attributed, in other European countries, to the communal level as “own” competences. The Rapporteurs understand the present difficulties in finding new structural forms of financing a larger number of own competences, but could not forego underlining that a too large number of delegated competences should be in contrast with the Charter.

 

In terms of consultation with local and regional authorities (Article 4.6 of the Charter), while some sources have stated that the central government consults the local authorities, namely FEMP, in due time and in appropriate way in the planning and decision-making process for all matters which concern them directly, others have declared the opposite and stressed the need to improve such consultation. The problem is considered here in general terms; the more specific aspect concerning participation in financial matters will be considered later on (Article 9 of the Charter).

 

Consultation rights are very important at regional level. In this field, several autonomous communities have changed their Statutes and laid down new principles regarding the rights of local authorities to participate to the decision-making process at regional level, creating new areas of co-operation between autonomous communities and local authorities.

 

For example, Catalonia created (Article 85 of the Statute) a Consejo de Gobiernos Locales, as an organ representing municipios and veguerias (the only second tier of local government recognised by the Statute) in the legislative process and in taking decisions on regulations and acts of general planning. The Consejo has to be regulated by an ordinary law of the autonomous communities.

 

Andalusia has created two different bodies: one is the Consejo Andaluz de Concertación Local (Andalusian Council of Local Consultation), a joint body in which the Junta de Andalucia Government is represented on one side and local corporations, municipalities and diputaciones on the other. It is therefore a classic organ of consultation, agreement and participation of the Andalusian Government. The second body is the Consejo Andaluz de Gobiernos Locales (Andalusian Council of Local Governments), which, in the words of the President of the Parliament of Andalusia, is a very recent creation under Law 5/2010 of 11 June on “Autonomía Local de Andalucía”, Article 57, not yet in operation and due to start work in the quarter that has just begun; it will participate in the parliamentary proceedings on all laws and all plans affecting local governments in the Parliament.

 

Article 4 is not fully respected, particularly with regard to the frequent delegation of competences to the municipios.

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.

 


In general, according to the information provided to the rapporteurs, it seems that the situation is in compliance with Article 5 of the Charter. Local authorities appear to be formally consulted on projects of changes of local boundaries.

 

The issue of merging of municipalities with less than 5 000 inhabitants was widely discussed in 2012. Several national sources concluded that most of Spain’s municipalities are administratively unviable, and considered their merger essential in any process aiming at strengthening local government. In the case of Spain, establishing a minimum population size of 5 000 inhabitants would represent a major step forward, bearing in mind that 6 797 municipalities (83.7%) of the municipalities are currently below this threshold. The draft act on Rationalisation and Sustainability of Local Government (Ley de racionalisacion y sostenibilidad de la Administracion local) stipulates that 3.725 local entities should be merged. The benefits to be gained from such a merger would be: to reduce administration costs, while guaranteeing the improved administrative capacity of the municipalities, approximate 3.500 million euros; to facilitate the reform of the local finance system, reducing the dependence of the municipalities on higher tiers of government and improving the fiscal responsibility of each municipality; to improve the efficiency of municipal investment policies, reducing the dependence of the small municipalities on higher tiers of government and avoiding the duplication of service provision; to facilitate municipal financial control (currently impeded by their size and sheer number) and the design of policies tailored to their needs (e.g. fiscal stimulus, aid in extreme financial situations, etc.).

 

Nevertheless, some interlocutors the Congress delegation met during the visit noted that it would be more appropriate to combine local self-government with flexible management and promote a rational distribution of competences, taking into account the economic needs of municipalities and of their citizens rather than opting for a simple “artificial fusion” of municipalities.

 

Should this measure be adopted and implemented in the future, the rapporteurs are confident that a consultation process will be organised prior to the foreseen changes of local boundaries as stated in the Article 5 of the Charter. The reform would need to be accompanied by measures guaranteeing citizen participation (including those in the small, merged municipalities) and that they have the capacity to play a role in the decisions that affect them.

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.


As part of their autonomy, local authorities have their own staff and the power to recruit and manage their own human resources. Title VII of Law 7/1985 ensures the legal basis of human resources at local level, as well as regional and sectorial law.

 

In Spain, local government staff may be of two different kinds: civil servants (funcionarios) and contractual employees (personal laboral). Civil servants are considered under “administrative law” and enjoy a special legal status (in principle, they cannot be fired or made redundant). The recruitment of this type of employee, their rights, services, duties and responsibilities are regulated by Administrative law. Contractual employees, on the other hand, are governed by “private” employment law. Their salaries and working conditions are regulated in a different way: they sign individual contracts; they bargain and negotiate collective agreements with the corresponding local authority (usually the big ones). In terms of personnel management, each local authority is supposed to work as an independent “company”, with its own staff.

 

In this context, one has to bear in mind that, in Spain, there is a special type of local employee, who has traditionally been recruited and managed by the national government. These so-called “civil servants having a state qualification” or “state-wide qualified” employees (funcionarios con habilitación de carácter estatal) are the only ones who enjoy ‘‘professional mobility’’ across the Spanish territory. In other words, during their career, they may obtain positions within the administration of different local authorities across the country, by participating in “ad hoc” staffing procedures. The status of this special type of civil servant is also regulated by the State (the essential rules and elements) and by the regions. Clearly, the role of such special civil servants is of high importance to each and every local authority, because they discharge (in an exclusive way) crucial legal and managerial functions. The situation of the human resources at local level seems to the rapporteurs to be respected by Spain.

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.


In Spain there are currently almost 2.7 million public employees. Half of these employees work for the regions. Almost 600 000 public employees work at local government level.

 

The Rapporteurs was informed that the salaries of locally elected officials vary enormously. According to the information provided by several interlocutors, the vast majority of mayors do not receive remuneration and there is a large gap between the respective wages of most mayors in Spain which receive remuneration.

 

In addition, the Rapporteurs were informed that there is no public register giving the details of the salaries of locally elected officials. In this respect, the FEMP approved in 2009, the Code of good local governance which includes some recommendations on the remuneration of elected officials.

 

According to various sources, the government intends to establish a framework for the remuneration of mayors in order to establish either a balance between salaries of mayors or a ceiling for the salaries of mayors. The Rapporteurs would suggest that a minimum threshold be established as well therefor.

 

Another important issue to be considered and to be followed in the current monitoring process is the Government Programme of Reforms/Second Half of 2012 to 13 July 2012. One of the objectives thereof is the reform of the Civil Service Employees and Public Offices, by adapting the civil service employee and public office regime to the economic reality, contributing thereby to budgetary stability and competitiveness. An exceptional measure in this Programme concerns the suspension of the extraordinary salary instalments given in December (or an equivalent reduction) for all civil servants. Civil servants will recover this amount after 2015 only, through contributions to their pension funds. There is a ceiling on salaries paid to mayors (and a 30% reduction in the number of local councillors (which means 21.338 consejales) to a maximum of 35 in the largest municipalities).

 

Austerity measures have also been imposed on the regional members of parliaments, namely through pay cuts (dedicación exclusiva) for deputies. The Government of Castile La Mancha, with a budget of 8,500 million euros and 133,000 public employees, is one of those which adopted the most drastic measures. From 1 January 2013 on, 42 out of 49 regional deputies of Castile-La Mancha will no longer receive the “dedicación exclusive”. In addition, most autonomous communities have decided to reduce the number of regional deputies. Representatives of the Socialist Group expressed their worries in this respect to the Rapporteurs, because they believe that these measures are not genuine austerity measures, but simply consist in a direct threat to regional democracy.

 

So far, it seems to the rapporteurs that the situation in this respect is not in compliance with the requirements laid in the Article 7 of the Charter.

 

As regards the plan to limit mayoral salaries and dedicación exclusiva of regional deputies, the Rapporteurs would draw the national authorities’ attention to the above mentioned provision of the Charter, and specifically to the requirements which imply an appropriate financial compensation for expenses incurred in the exercise of the office as well as where appropriate, compensation for loss of earnings or remuneration for work done (Article 7(2) of the Charter). 

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.


According to Article 153 of the Spanish Constitution, ”control over the bodies of Self‑governing Communities shall be exercised by: a) The Constitutional Court, in matters pertaining to the constitutionality of their regulatory provisions having the force of law; b) The Government, after the handing down by the Council of State of its opinion, regarding the exercise of delegated functions referred to in Article 150.2; c) Jurisdictional bodies of administrative litigation with regard to autonomous administration and its regulations; d) The Court of Audit, with regard to economic and budgetary matters”.

 

Furthermore, since 1984, some autonomous communities have set up, within the framework of their autonomous powers, regional bodies responsible for external auditing (“OCEX”) answerable to their respective parliaments, and aim to develop external /auditing in their specific public sectors. So far, thirteen regions have established OCEX responsible for auditing the regional public accounts (Andalusia, Aragon, Asturias, Canaries, Castile-La Mancha, Castile and León, Catalonia, Community of Madrid, Community of Valencia, Galicia, the Balearic Islands, Navarre and the Basque Country). The situation of Spain is thus atypical when compared to other European countries, which have greater homogeneity among the different regions of the same State.

 

The auditing regime of local entities is enshrined in the Law 7/1985. The essential judicial supervision of local authorities is carried out by administrative courts (jurisdicción contencioso-administrativa). Furthermore, the national Court of Audit (Tribunal de Cuentas), reviews the legality and regularity of a local authority’s expenditure, with reference to the relevant regulations on budgeting and accountancy. Should irregularities or misdeeds be established, mayors, deputy-mayors and others can be held responsible and may incur possible damages.

 

The supervision of autonomous communities and local entities consists of supervising financial regularity, monitoring legality and checking on efficacy, efficiency and economy (the “three E’s”).

 

In Spain, a system of inter-administrative oversight is performed jointly by the regions and the State. In a system comparable to  other European countries, Spain has developed specific instruments, through which the region or the State are in a position to supervise, oversee or merely gather information concerning the conduct of local authorities. The designation of local authorities as “autonomous” in the Spanish Constitution does not mean that they are independent administrative entities, or that it excludes intervention from either the national or regional sphere. Indeed, the core supervisory function exercised by both levels is meant to be an oversight of the actual legality of local authorities’ actions and not a control of expediency. Consequently, an administrative “tutelage”, which is prevalent in countries such as Belgium or Luxembourg, is conceived to be incompatible with the Spanish concept of local autonomy.

 

The State and the region can thus neither adjust nor invalidate local authorities’ plans, decisions or rules on expediency or opportunistic grounds as such an act would be incompatible with local autonomy. Accordingly, administrative supervision is primarily limited to questions of legality and secondly, submitted to the inquiry of administrative courts (which in practice, appears to be complex, as reflected in the vast amount of administrative jurisprudence).

 

Lastly, the Council of Ministers, being the top central government body, has the right to dissolve the governing body of a local authority, if the local body acts in violation of its constitutional duties (for example in the case of the dissolution of the City Council of Marbella in 2006, which came about as a result of massive corruption in the field of land use and housing construction practices).

 

Specific attention must be paid to supervision in financial matters. In many countries, the targets established in order to adopt policies of general spending review in order to avoid increased public debt could imply some new instruments, which, even if they could not explicitly be considered as “supervision”, could actually reduce the autonomy of local authorities.

 

The supervision of autonomous communities was reinforced on 1 May 2012 by the entry into force of the organic law (on budgetary stability) which enhances the transparency of the public accounts of autonomous communities and reinforces State resources in terms of monitoring and correcting lapses in regional accountancy, with possible sanctions or even compulsory supervision if necessary (in return for support with their cash flow difficulties). The rapporteurs consider this law as a positive step, especially in the current economic context.

 

In that perspective, it should be noted that the organic law primarily provides for a new system of supervising the regional and local authorities’ budgeting process, in which regional governments submit their approved expenditure ceilings to the CPFF (Council of fiscal and financial policy), and, along with local authorities, send these budgetary provisions to the Ministry, which decides whether the budgets comply with the targets of stability, debt and expenditure regulation for the following year’s budget and may make some possible recommendations to the administrations concerned.

 

Secondly, when one administration adopts measures that carry a risk of non-compliance, the central government adopts a measure to limit borrowing automatically, subject to a notification to the CPFF or CNAL (National Commission for local Administration).

 

Thirdly, the corrective mechanism is to be adopted by central government, always subject to a notification to the CPFF or CNAL.

 

The general provision of the present Spanish legislation on supervision by the upper levels of government on local authorities is in compliance with the Charter.

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 8.1

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 8.1

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.


The domain of financial resources holds a place of high importance in Spanish legislation, as illustrated in Act 2/2004 and Section 142 of the Constitution, which specifically state that “Local treasuries must have sufficient funds available in order to perform the tasks assigned by law to the re­spective Corporations, and shall mainly be financed by their own taxation as well as by their share of State taxes and those of Self-governing Communities”.

 

The autonomous communities’ funding system distinguishes two regimes. Due to their “historical rights”, which are recognised by the Constitution, Navarra and the Basque Country have a special regime that gives them significant autonomy in financial and tax issues. All other autonomous communities fall under the general regime. They obtain their resources mainly from totally or partially devolved State taxes; their own taxes; transfers from the Inter-territorial Compensation Fund; returns from their own patrimony; and credit transactions. The Inter-territorial Compensation Fund was created to soften economic unbalances across the regions and to give effect to the principle of solidarity among autonomous communities.

 

Generally, local authorities decide and, consequently approve their respective budgets by an affirmative vote of the municipal council. Thus, annual budget decisions are taken without prior approval or intervention from regional or national authorities. Decisions regarding the expenditure of local authorities are also taken autonomously. Certain budgetary decisions, such as taking up loans above a given ceiling do, however, require the approval of a higher administrative authority.

 

Municipalities rely on their own specific taxes from which they can determine rate, a participation in State taxes, specific subsidies for public transport, the creation of infrastructures, services and equipment, public payment for activities under their own competence, and public or private credit. For their part, provinces do not have “taxes” but they may establish a surcharge (recargo) on the municipal tax on economic activities, and may collect charges and fees and special contributions in addition.

 

The own revenues (recursos propios) of local authorities comprise the total of fiscal incomes (taxes, charges and fees) and additional non-fiscal revenues. Contrary to municipalities, provinces  can not levy taxes, but may merely establish surcharges (recargos) on the municipal tax on economic activities. In addition to that, provinces may collect fees, charges and special contributions. While municipalities may only collect taxes on basis of legislation enacted by the state or regional parliament, they are not in the position to freely create or establish such taxes (impuestos).

 

The Spanish Local Finances Act divides municipal taxes into mandatory and operational ones. The former comprises, among other, the tax on real estate, and the tax on motor vehicles and economic activities. Optional local taxes include the tax on real estate capital gains in urban areas as well as taxes on construction and installations.

 

Furthermore, local authorities are entitled to establish several charges or fees (tasas, precios públicos) for usage of municipal or provincial properties (sidewalks, square etc.) or the delivery of certain services such as the collection of waste, use of local sports facilities or depuration of residual waters etc. Ultimately, special contributions (contribuciones especiales) may be collected by the local authority in order to finance public works (renovation or improvement of sidewalks, streets etc.).

 

Other sources of own revenue can result from economic activities, the sale of property and assets or the collection of sanctions and fines.

 

Economic activities: Through public or local companies, local authorities may carry out economic activities which lead to an additional non-fiscal income.

 

Sanctions and fines: As in most European countries, Spanish municipalities enjoy the right to impose different administrative sanctions on natural and legal persons alike. A breach of local regulations and ordinances usually leads to the collection of monetary fines, which are particularly relevant in big cities (i.e. transit and parking fines, environmental fines etc.).

 

An additional key income for municipalities, which are located in areas that experienced a housing boom during the last decades, is generated by urban activities. In particular, cities located at the seaside and the urban conglomerations of Barcelona and Madrid profited from two major sources of income: Firstly, these municipalities have participated in the process of transformation of the rural land in to urban areas which has generated significant income from mandatory disbursements (either in land or money) that private property owners should make for such transformation. Secondly, the aforementioned building and development activities generated additional different sources of income by means of taxes, charges and fees. The explosion of the housing bubble in 2008-2009 instantly stopped the fast development of the building sector and thus resulted in a drastic drop in income for municipalities.

 

One means used to reduce the amount of expenditure at local level is the establishment of limits at the central level, which consist largely of a comprehensive ceiling established for the total amount of expenditure. While such a measure, related to the economic situation, is only temporary, it is very difficult to establish whether the restrictions will affect standards in the exercise of public responsibilities or public services. Conversely, if the objective is structural and permanent reduction, changes can be envisaged regarding the standard costs of public functions and services with, however a risk to the standards hitherto maintained in the delivery of services. This second case could lead to a violation of the principle of to dispose freely of financial resources (Article 9, paragraph 1).

 

As regards the provisions of paragraphs 1, 2 and 3 of the Charter, it should be noted that the major form of revenue for municipalities still comes from transfers, awarded by the regions and most importantly by the State, which in fact grants 63.5% of all transfers. This is not in line with the Charter’s provisions. Above all, specific and non-earmarked transfers, awarded by national authorities according to a specific formula, allow municipalities to participate in the tax revenues of the State (participación en los tributos del estado). Additionally, municipalities that meet certain requirements, may receive a share of State tax revenues (cesión de recaudación de impuestos del Estado). A similar “noncompliance with the Charter” situation would follow from a general adoption of strict limits to the financial autonomy of local authorities.

In February 2012, the Ministry of Finance and Public Administration stated, at a meeting of the Senate’s Local Authorities Commission, that the government planned to support local administration: proper funding of “the administration closest to the citizens” was to be ensured through initiatives such as boosting the fiscal autonomy of local councils. In addition, the ministry set out the key measures that the government planned to take in order to support local authorities, and also stated that three important decisions had already been made in less than one month to provide financial support for local administrations: the increase in the municipal property tax (IBI), an advance of 50% of the definitive payment of local authorities’ share and an increase in the balance repayment period from 60 to 120 monthly instalments for 2008-2009. The Ministry also explained that the mechanism for providing funding to local authorities would be in place throughout 2012. These measures will be applied only if local government approves an adjustment plan according to the Organic Law on budgetary stability and financial sustainability of public administration. The aim of this mechanism is to ensure the sustainability of the financial situation of local authorities.

 

In this context, according to the information provided by FEMP, local authorities will receive a total of around 16 000 million euros in 2013, amounting to a surplus of 7.1%, compared to the previous year. The Rapporteurs consider this national decision as a positive step, even though it does not imply a structural change in the financing of local authorities: the increase of the 2013 local budgets is based on the anticipation of liquidity transferred from the central government to the local authorities, with an expected return within ten years.

 

An important subject discussed during the visit concerns the imbalance between the distribution of powers and the distribution of potential income between central, intermediate and local governments. This imbalance has become more marked of late because of (among other reasons) the fall in fiscal capacity (many of the taxes levied by the municipalities depend on the property sector) and the increase in municipal costs resulting from municipalities having to provide services that correspond to other levels of government. According to several financial experts the solution to this imbalance involves an increase in the resources that the State should be injecting into the municipal finance model. A further proposal made by the experts is that the local finance model should distinguish more clearly between small and large municipalities. The rapporteurs also stress the need to establish more equitable distributive formulae, based on indicators of need (population with weightings) and capacity (index based on IBI). The aim of such a reform would be to link resources to capacities.

 

Given the decentralised nature of Spain’s public finances, a strong institutional framework is essential. The medium-term budgetary framework has a good track record overall, but the crisis put Spain’s fiscal institutions under strain and exposed a need to tighten the control over regional and local authorities’ budgets and to take better account of cyclical developments when setting budgetary targets.

 

As mentioned in paragraph 84, the Government took a significant step forward to improve the fiscal framework with the adoption of the organic law. This law develops the constitutional balanced budget rule adopted in 2011 and sets out new financial mechanisms for budgetary coordination and control vis-à-vis regional governments. It introduces a set of fiscal rules which are binding for all levels of Government, including public-sector companies (structural balanced budget rule, debt rule and expenditure rule). It also gives a mandate for a medium-term budgetary strategy, introduces an early warning mechanism for budget deviations, provides for corrective mechanisms and sanctions, and strengthens reporting requirements for all levels of Government. The law is a positive step, as it compels not only the national parliament, but also regional parliaments, to comply with budgetary stability. The definition of the rule in terms of a structural deficit should allow for better reflecting cyclical developments in future budget Laws. Under the original proposal made by the Ministry, two bodies are required to prepare a report on fiscal targets: the Council of Fiscal and Financial Policy (Consejo de politica fiscal y financiera, CPFF); the National Commission for Local Government (Comisiòn Nacional de Administracion Local, CNAL). During 2012, there were three meetings of the National Commission for Local Government on the issues such as the funding mechanism for payment to providers, budgetary stability in local government and the approval of a new Basic Law on Local Government as well as one on Local Finance.

 

Despite the Government’s measures, some of the delegation’s interlocutors complained that no specific measures have been agreed on in order to guarantee municipal governments a similar level of fiscal income.

 

Another subject raised during the visit with the delegation concerns measures required in order to avoid local government debt. As a general rule, local authorities may have recourse to the private sector for loans and credit from the banking system, as well as issuing bonds. According to Act 17/2012 of 27th December on the 2013 State Budget, local governments who achieved a positive balance in the previous (financial) period may enter into new long-term credit operations to finance investment when:

 

a) the total volume of outstanding debt does not exceed 75% of current revenues or accrued income;

b) the debt represents between 75% and 110%, in which case they may conclude debt transactions following authorisation by the competent authority to which financial supervision of local authorities has been attributed.

 

If local entities present a negative net savings or a debt volume greater than 110% of current revenues or accrued income they may not enter into long-term credit operations. "

 

In contrast to the aforementioned rules, a major concern regarding current local authorities’ finances is represented by the accumulated debt they are carrying. In fact, local authorities have been increasing their debt with private contractors and banks (short and long-term loans) over the last decades in response to the expansive budgetary policies linked to electoralism, excessive borrowing and the previously mentioned housing bubble that dominated the Spanish economy over the last twenty years. In the light of the current economic and financial crisis, the figures have become a matter of national political concern, particularly, since the end of 2009, when the total amount of Spanish local authorities’ accumulated debt amounted to  34 594 million euros. This amount represented 3.3% of Spain’s GDP. While more than 80% of the debt (28 770 million euros) corresponded to municipalities and municipal associations, the remaining 5 825 million euros corresponded to provinces and island councils. Furthermore, municipal companies accumulated a debt of 7 885 million euros. In the first quarter of 2011, the total accumulated debt of Spanish local authorities amounted to 35 420 million euros representing an increase of 3.2% with respect to the 2009 figures.

 

Specific attention must be paid to evaluating participation mechanisms where financial measures are concerned. On the one hand, the mechanisms provided are based on the participation of representatives from the general categories of regional and local authorities, and are unsuited to the needs of participation where general national decisions are concerned (laws, administrative acts of general relevance to financial policy). On the other, a different system governs the rights of participation when the national government adopts a measure directed in detail at a single local authority (or a specific group of them). In these cases, the participation rights provided for by the Charter should be secured to the particular local authorities concerned.

 

The Foundation for Democracy and Local Government highlighted the fact that local governments had not been included in the decision-making process in relation with the recent reforms as required by Article 9 paragraph 6. For example, the increase of the Properties Tax by the Central Government was done without prior consultation, constituting a breach of Article 9.6 of the Charter, in so far as the discretional powers of the city council to determine the applicable rates within the limits established in the Local Finances and Tax Act were eliminated.

 

In general, the provisions of Article 9 are formally respected but, in respect of paragraphs 1, 2, 3 and 5, the Rapporteurs would underline that the major form of revenue for municipalities still comes from transfers, awarded by the regions and, most importantly, by the State, which in fact grants 63.5% of all transfers, a situation that is not in line with the Charter’s provisions.

 

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.


Consult reply indicated at 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.


The right of associations of municipalities is guaranteed by Article 44 of the Law 7/1985 and the Fifth Additional Provision of Law.

 

In this respect, one good example is the Spanish Federation of Municipalities and Provinces (Federación Española de Municipios y Provincias, FEMP), which is the nationwide Association of Local Entities with the largest established base, grouping together Municipalities, Provincial Councils and Insular Councils: a total of 7 287, who represent more than 89% of Spanish Local Governments. The FEMP maintains working relations with the Federations of Local Entities of regional scope who so desire, signing with each of these a protocol that specifies the terms and extent of such agreement in each case. The FEMP also maintains good relations with the Association of Basque Municipalities-EUDEL.

 

Another positive example was given to the delegation during the meeting with the representatives of FAMSI – the Andalusian Fund of Municipalities for International Solidarity, which is a network of municipalities and provinces and other private and public institutions. FAMSI groups together more than 150 institutions in Andalusia and was founded with the aim of co-ordinating and promoting the public decentralised international co-operation carried out by local governments in Andalusia. FAMSI is present in Latin America, Africa, especially in Morocco, and Asia.

 

In the light of Article 10 of the Charter the rapporteurs conclude that Article 10 of the Charter is fully respected in Spain.

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 Spain, two different legal de­vices are relevant as regards Article 11 of the Charter: “Ordinary protection”, which is enforced by regular or administrative courts; and secondly, “constitutional protection” that is carried out by means of a special appeal before the Constitutional Court.

 

Ordinary protection: Should a national or regional agency adopt a decision or an administrative regulation which could interfere with local competences or touch upon the legal realm of local self-government, the local authority which considers itself affected by that measure may sue the State or regional agency in the administrative courts, claiming that local autonomy has been violated. These courts may set aside and even quash the contested State or regional measure, if they find that there is a clear and evident violation of local autonomy. The case-law of this court of justice is, consequently, very important, and constitutes an unavoidable element of the legal idea of “local autonomy”.

 

Constitutional protection: An additional difficulty is presented by the protection of local autonomy from violations as a result of statutes (passed either by the national or the re­gional legislatures). In essence, administrative courts do not have the power to annul acts of parliaments. In Spain, such a power is exclusively reserved to the Constitutional Court. Nevertheless the locus standi in this Court has traditionally been very restricted and was not recognised as a local authority prerogative. Therefore, if national or regional parliaments pass a statute involving some type of violation of local autonomy (for instance, an expediency control by regional or national agencies of local government activity) the local administration could neither react nor bring a constitutional challenge against such a piece of legislation. This situation changed dramatically in 1999, when the Constitutional Court Act (Ley orgánica del tribunal constitutional) of 1979 was amended, in order to provide for a specific procedural mechanism, which allows local authorities to protect their autonomy. This device is referred to as “Conflict in defence of local autonomy” (Conflicto en defensa de la autonomía local).

 

As regards the case law on provincial autonomy, a number of specific guarantees - (“minimum constitutional standards” as they have been qualified by the doctrine) - reveal the constitutional scope of provincial autonomy. Especially relevant are the guarantees (that result from the Constitutional case-law) to preserve the financial aspects of provincial autonomy. In addition, the constitutional case-law has emphasised the responsibility that depends primarily on the State to provide adequate financing of municipalities and provinces. 

 

The provinces, in accordance with constitutional jurisprudence, are empowered to determine the structure of expenditure and, consequently, to decide what specific amount of money is being spent in each of its areas of competence.

 

Despite this Constitutional protection, the document provided by the Constitutional Court to the Congress delegation confirmed the extremely limited use of this very important means of legal protection of local authorities (an average of 2 appeals per year in the twelve years from 2000 to 2011). According FEMP the protection through the Constitutional Court is more formal than real, as the conditions for the admissibility of a case before the Court led so far to declare the admissibility of only 2% of the complaints lodged to the Court.

 

The rapporteurs recall that Article 11 requires that local authorities shall have the right of recourse to a judicial remedy which is the case de jure. Therefore they concluded that Article 11 is respected by Spain.

ACCESSION

to the Council of Europe

RATIFICATION

of the European Charter of Local Self-Government

CONSTITUTION | NATIONAL LEGISLATION

The Spanish Constitution of 1978 explicitly recognises local self-government (autonomía local) but does not provide a definition of it.



29Ratified provision(s)
0Provision(s) with reservation(s)
1 Unratified Provision(s)
18Compliant Provision(s)
0Partially Compliant Provision(s)
10Non-compliant Provision(s)