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.
Article 4, paragraph 1 of the Charter requires that the basic powers and responsibilities of local authorities are prescribed by the constitution or by statute.
In Lithuania, Article 120, paragraph 2, of the Constitution establishes that “Municipalities shall act freely and independently within their competence defined by the Constitution and laws”. Several other Articles refer to the competences of municipalities, as pointed out by the Constitutional Court in its 24 December 2002 decision. The Court mentioned Article 40, paragraph 1, which indicates municipal establishments of teaching and education; Article 41, paragraph 2, which, inter alia, indicates municipal schools of general education, vocational schools, and schools of further education; Article 119, paragraph 4, which provides that for the direct implementation of the laws of the Republic of Lithuania, as well as the decisions of the Government and the municipal council, the municipal council forms executive bodies accountable to it; Article 121, paragraph 1, which provides that municipalities draft and approve their own budgets; Article 121, paragraph 2, which provides that municipal councils have the right, within the limits and according to the procedure provided for by law, to establish local levies, and that municipal councils may provide for tax and levy concessions at the expense of their own budgets; Article 122, which provides that municipal councils have the right to apply to a court regarding the violation of their right.
The Law on Local Self-government (Article 5) distinguishes the municipal into two major categories: independent and delegated and describes in details those function, by listing 44 independent functions and 38 delegated functions. Additional functions have been assigned or delegated by other laws.
As for Article 4, paragraph 2 of the Charter, according to which “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”, (Article 6, n. 44) of the Law on Local Self-Government contains a “general residual clause”, referring to “other functions that are not assigned to state institutions” as independent functions.
Article 4, paragraph 3 of the Charter articulates the general principle of subsidiarity. It establishes that “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”.
Recommendation 321 (2012) invited the Lithuanian authorities “to amend Article 4 of the existing Law on Local Self-Government so that the principle of subsidiarity is specifically recognised in the field of local government, by being mentioned as one of its guiding principles”.
Even though the principle of subsidiarity has been laid down in the Law in 2016 (being included in Article 4, n. 14 of the Law on Local Self-Government), the local authorities still complain that it is not implemented in practice. For example, the protection of the rights of the child was quoted. This function (previously delegated to the municipalities), will be centralised after June 2018: all the departments for the protection of the rights of the child currently operating in the municipalities will be removed from the municipal structure and will be under the authority of the Ministry of Social Security and Labour. In the opinion of the municipalities, the centralisation of the function of the protection of the rights of the child violates the principle of subsidiarity and raises concerns whether the centralisation of this function will improve the well-being of children and their families.
Recommendation 321 (2012) pointed out also that “municipalities” competences have been reduced in certain areas (territorial planning, construction, ownership of land) by relegating them to the position of procedure-executing bodies rather than policy-makers in the field of competences and no compromise could be reached which would extend the municipalities’ rights to manage state-owned land in urban and rural settlements and allow elected representatives some authority in the planning policy for their area”. It invited the Lithuanian authorities to “consider extending the municipalities’ rights to manage state-owned land in urban and rural settlements and allow elected representatives some authority in the planning policy for their area”.
According to the ALAL, the recommendation was not fully implemented. An amendment to the Law on Local Self-Government allowing the mayor to change the main designation and way of land use has been introduced (Article 20, paragraph2, n.20). However, the Law on Land and the government regulations maintain this function within the competence of the director of administration.
The delegation was informed that no important progress has been made in giving more rights to the municipalities to dispose of State-owned land, although provisions are part of the current Government's programme and a draft amendment to the Law on Land was registered in the Seimas, according to which the function of the organisation of formation and rearrangement of land parcels in rural areas, till now performed by the National Land Service, is intended to be transferred to the municipalities. The Law on Forests was amended in 2017, transferring to the municipalities the State function of supervision, protection and management of the state forest land for the purpose of public recreation, thus eliminating legal barriers preventing the municipalities from the initiation of taking over the city forests.
The ALAL and municipal representatives expressed their opinion to the delegation, according to which it is crucial to ensure that the functions of the planning of land use and disposal of the State-owned land of the National Land Service would be transferred to the municipalities as quickly as, since only this will allow to create a favourable investment environment and promote territorial development. The State authorities pointed out that the existing situation should be considered as a transitional status, because the process of returning the public land to the previous owners or to their heirs has not been completed. The main problem the municipalities are facing, according to the Ministry of Interiors, is the length of the procedure in case they intend to rent lands to private investors, as it takes up to 8 months. At the moment, the Government is dealing with speeding up of the procedure, in order to not exceed six weeks.
On other issues, competences of the municipalities have been improved. The Law on Cash Social Assistance changed the function of cash social assistance to the independent functions of the municipalities. Sufficient financial resources were allocated. According to the ALAL, the reform has been highly successful.
Article 4, paragraph 4, raises the problem of overlapping responsibilities. In the interest of clarity, it provides that “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”. Article 4, paragraph 5, refers to delegated responsibilities, establishing that local authorities shall, insofar as possible, be allowed discretion in adapting their exercise to local conditions.
During the meetings with the delegation, the representatives of the municipalities and the ALAL pointed out that the regulation often limits the right of the municipalities to act independently and that in several matters no discretion is allowed in the exercise of delegated functions. Too detailed description of the independent functions implies that the municipalities do not have the right to implement them at their discretion, taking into account the local conditions as much as possible. As a result, the municipalities lack the financial and human resources for the implementation of the excessively cumbersome bureaucratic requirements established by the central authorities.
Among the examples presented, the fact that the municipalities are responsible for the organisation of the supply of heat and hot water. However, the role of the municipalities in the management of the heat sector has become merely formal, as the final decision on the pricing of heat and hot water is taken by the National Commission for Energy Control and Prices. Another example concerns the municipal competence on the collection and management of municipal waste and packaging waste. According to the ALAL, the current legal framework is so detailed that its implementation requires additional funds. After the Government resolution on the management of municipal waste No 711 came into force on 20 of April of 2017, the management of municipal waste is paid under a dual payment system. The calculation of such dual payment in the municipalities raises additional problems, as it requires additional human and financial resources.
The delegation was also informed of a new regulation of public services, requiring the municipalities to obtain a permission from the Competition Council before entrusting legal entities under their control to start an economic activity. This provision is problematic as for the right of municipalities to choose the most appropriate way of organizing a public service, due to a very wide definition of an economic activity used in the Law on Competition. In order to avoid this risk, a draft amendment has been introduced in the Seimas, aimed at clarifying which activities of municipalities would be regarded as economic activities and at introducing the possibility, but not the obligation, for the municipality to apply for an opinion of the Competition Council, asking in advance to assess whether the foreseen decision will not restrict competition.
During the consultation procedure, the Seimas underlined that the existing legal regulation with effect from 1 July 2017, under which the provision of a public service is treated as an economic activity, means that the municipality, before entrusting the implementation of a new economic activity to a legal person controlled by the municipality (either a new legal entity or an existing one), must obtain a authorization from the Competition Council. The Seimas also concluded that this limits the right of municipalities to choose the most appropriate method of organisation of the provision of public services.”
Taking into account the claims raised by the municipalities, the rapporteurs consider that the numerous interference by State authorities within the municipal independent functions undermines the attribution to local authorities of full and exclusive powers.
Finally, Article 4 paragraph 6 of the Charter provides that “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”.
In Lithuania, municipalities have the right themselves and through the ALAL to take part in drafting laws and other legal acts regulating local self-governance or determining functions of municipalities, and to submit their proposals and comments on the draft projects. According to the ALAL, 60 or 70% of their comments are incorporated in legislative acts and government regulations. Nevertheless, the ALAL complained that the deadlines established in the Government regulation for the coordination between institutions often do not give a chance to the associations to properly formulate a position of the municipalities.
The agreement between the Government of the Republic of Lithuania and ALAL on the activities of the bilateral commission bringing together the Government and ALAL, with the aim to balance the competing interests of the State and the municipalities, was renewed, resulting in the increase of the number of members of the commission from 3 to 4 from each side.
At the Seimas, the rapporteurs were informed that the Committee on State Administration and Local Authorities actively co-operates with the ALAL also by setting up inter-institutional working groups or advisory groups (for example, on the reform of the system of protection of children rights).
Although the system of consultation could always be improved and smoothed, the rapporteurs consider that Article 4, paragraph 6 is respected in Lithuania.
In conclusion, the rapporteurs consider that the requirements of Article 4, paragraph 1, 2 and 6 are satisfied in Lithuania, whereas the requirements of Article 4, paragraph 3, 4 and 5 are not fully satisfied by the present legal and factual situation in Lithuania.