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 main question that must be addressed under this heading is whether, in the present situation, Hungarian municipalities and counties regulate and manage a “substantial share of public affairs under their own responsibility and in the interests of the local population”. This provision requires an assessment which takes into account the rather “subjective” and relative nature of such concepts as “ability”, “a substantial share of public affairs”, “under their own responsibility” and “in the interests of the local population” since no official or universal method of measuring such substantial character has yet been developed. The question must be addressed considering the historical evolution, the culture and the constitutional traditions of the country under analysis. It is also closely linked to the assessment of the compliance with other parts of the Charter, such as Articles 4, 8 and 9.
In order to assess compliance with this provision, both legislative and factual aspects should be taken into consideration.
In Hungary, local government authorities have regulatory powers. Based on Article T of the Fundamental Law, the decrees of local government are legal acts in which a generally binding rule of conduct may be determined. The normative power of local authorities is regulated in detail by the Cardinal Act on Local Self-Government.
Nevertheless, the part of public affairs local authorities can regulate and manage is definitely limited. The share of public affairs entrusted to local government has decreased very significantly. The financial autonomy of local governments has severely reduced, strengthening the control of central government over local government finance. In addition, numerous powers hitherto exercised by local government are described as being “naturally” recentralised. In particular, health and social care as much as education have been almost completely centralized. All three sectors, accounting for 86% of local expenditure, which were previously a matter for the municipalities and counties, have been transferred to the central level. In the new system of powers, counties now have only competences on rural development, regional development, regional planning and coordination.
Another indicator of the “importance” or the political and social role of local government in a country is the local government expenditure in the national general government consolidated budget, especially in comparison with other EU countries. In Hungary, as previously indicated, the local authorities manage only 12.9% of the total public expenditures, which is equivalent to 6% of GDP.
Recommendation 341 (2013) called the Hungarian government to “revise the legislation concerning local authorities’ mandatory tasks and functions so as to extend the range of powers normally assigned to them on the basis of the principles of decentralisation and subsidiarity”.
The process of recentralisation that affected several competences already transferred to local authorities, already outlined in the 2013 report, has not been reversed in the subsequent period and the Recommendation 341 (2013) has not been fulfilled.
It should especially be pointed out the transfer of many competences of local government to the new districts, introduced from 1 January 2013, which serve as divisions of State deconcentrated administration.
During the consultation process, the government opposed the views expressed by the rapporteurs, in particular regarding the focus on re-centralisation of certain competences related to public services. It explained that this re-centralisation should be considered as building “a strong, active and efficient State”. The government pointed out that before 2010 a significant portion of public services had been provided by local self-governments, resulting in unacceptable differences in the quality of services due to economic discrepancies among municipalities, and essentially transferring the increasing social tensions to the local authorities along with steadily decreasing resources”.
The rapporteurs do not share this approach. For a signatory State to comply with Article 3.1 of the Charter, the goal of ensuring an equal level of public services must be achieved by other tools than the transfer of most basic competences of local authorities to State institutions: primarily, by granting to local authorities’ sufficient financial resources and through implementing a fair and effective equalisation instrument, as indicated in Article 9 of the Charter.
In light of the preceding considerations, it has to be reiterated that the requirements of Article 3.1 of the Charter are not met in Hungary.