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Denmark - Monitoring report

Date of the monitoring visit: From 3 to 5 May 2022
Report adopted on: 25 October 2022
Files : Report CG(2022)43-18 | Recommendation 479 (2022)
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This report on the situation of local and regional democracy in Denmark summarises the findings of the monitoring visit carried out from 3 to 5 May 2022. This is the third report assessing the implementation of the Charter in Denmark since the country ratified the Charter in 1988. The rapporteurs conclude that the system of local self-government in the country is well-functioning and the obligations undertaken under the Charter are generally fulfilled. They note with satisfaction that the Danish political and legal framework is marked by an efficient culture of consultation and trust between the central government and local authorities where unwritten rules and norms play an important role in the regulation of political agreements. The report highlights that the challenges to the Danish system of local self-government mainly stem from the demographic context marked by an ageing population and expenditure pressure, and points to the difficulties in the coordination between municipalities and regions as regards the delivery of health services.

 

The rapporteurs suggest redefining the framework of collaboration and the distribution of tasks between municipalities and regions on the delivery of health services, in consultation with associations of local and regional authorities. The rapporteurs also note that, although Denmark has shown good practices regarding citizen participation in public affairs at the local level, it has not yet signed 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). Denmark is therefore invited to sign and ratify the Additional Protocol to the Charter.

 

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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 principle of local self-government is guaranteed under the Danish Constitution. Article 82 establishes: “The right of the municipalities to manage their own affairs independently under the supervision of the State shall be laid down by statute”. It is a rather synthetic provision, which has to be considered within Danish constitutional tradition. Danish Constitution falls within the evolutionary category, and it has not been amended very often, still presenting many features of the first 1849 Constitution.

 

This article is often interpreted as being primarily a legal safeguard against the abolition of the municipalities by statute. Abolishing the municipalities would therefore require an amendment of the Constitution in accordance with the complicated amending procedure set out in Article 88 thereof. Secondly, Article 82 grants the local authorities the right to manage their own affairs and their budget independently, in compliance with the legislation. There is no description of the relevant aspects of self-government, for example local taxes have no constitutional basis.As it has been pointed out, “The length and detail of the constitutional provisions make it impossible to presume the extent of decentralization. Thus, the Constitution of the European country where local authorities have the broadest competences and powers, Denmark, devotes only one brief article to them”. A long tradition of extensive decen­tralisation and strong local democracy, means that in reality it is quite difficult to restrict local self-govern­ment.

 

As for the legislation, the local government falls under the parameters of the National Parliament with the Government to implement new laws. Using the principle of delegation, the Government and ministers can issue binding guidelines and circulars, always within the limits set by the Parliament.

 

For these reasons, the rapporteurs conclude that the requirements of Article 2 of the Charter are complied with in Denmark.

 

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.

Denmark is among the most decentralised countries in Europe, both when it comes to fiscal decentralisation and local autonomy. It scores at the top as for administrative and fiscal decentralization within the EU.

 

Local government expenditure, at 32.8 per cent of GDP or 66.1 per cent of total public expenditure, is the highest in the EU.

 

The local autonomy is recognized in the Constitution and in legislation and is a pillar of Danish democracy. Municipalities are responsible for providing local services and welfare services for their residents. This implies a certain degree of central regulation and supervision on local authorities by the central government. Many authors pointed to the increasing regulation of the administrative processes in the municipalities, referring, inter alia, to regulation on user involvement, requirements to produce plans of actions, visitation and requirements on applying specific methods, follow-up actions, free choice, and applying standards of quality. Within specific sector areas such as health and basic education, the national government has interfered more, and more emphasis is put on the results achieved within these areas. Municipalities and regions document their achievements through benchmarking and the publication of waiting lists or exam results. This process is supplemented by national legislation introducing free choice in various public service areas.

 

However, within the framework of national legislation and the yearly financial agreement between the government and the LGDK, the municipal councils have the autonomy to decide the allocation of resources across policy areas and have a large degree of discretion in setting the standard and quality of services. During the meetings, no issues were raised by the interlocutors on the impact on local self-government of those uniform standards. It was pointed out that they aren’t imposed by the government, but they are part of a vast negotiation involving all the stakeholders, including, in a key-role, the LGDK, thus they are largely shared and accepted as part of the “consensus culture” rooted in Danish tradition.

 

Therefore, rapporteurs conclude that Denmark complies with Article 3, paragraph 1 of the Charter.

 

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.

In Denmark, municipalities are governed by a council which is elected by the local citizens every 4 years in fair and free elections. A municipal council has a dual function; it is primarily the leading body of the society of citizens within the municipality and secondarily it is a regular public authority. The powers of a council depend upon whether it is acting in its primary or secondary function. When acting in its primary function a council has powers under the local authority mandate and the LLG. When acting in its secondary function its powers depend on what is authorised by the specific law. The most important powers of a council are those under the local authority mandate and its power to decide the local tax rate. The council normally forms committees to manage the committees’ areas of responsibility. The chairman of the council is the mayor and he or she is the chairman of the Finance committee and the top manager of the municipal administration and as such is formally responsible for the administration to the council.

 

Therefore, rapporteurs consider that Article 3, paragraph 2 is respected in Denmark.

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.

In Denmark, the municipalities' competences are set out in a range of sectoral legislation. They include childcare; primary and lower secondary schooling; special education for adults; elderly care; health (prevention, all care and rehabilitation that is not provided by hos­pitals, treatment of substance abusers, dental care and social psychiatry); employment: active employment efforts; integration and language education; nature conservation, the environment and planning: including drawing up municipal plans, wastewater plans, waste disposal plans, and water supply plans; the local road network; participation in regional traffic undertakings; utilities and emergency services; the social sector: financing, provision and administration; serving citizens in the area of tax, and tax collection in cooperation with the State tax authorities; libraries, music schools, local sports facilities and other cultural activities; local business services and tourist promotion.

 

Therefore, it appears to the rapporteurs that overall Article 4, paragraph 1, is respected in Denmark.

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.

In Denmark, municipalities can perform certain tasks based on the so-called municipal authority rules (kommunalfuldmagtsreglerne), which is a general term for the unwritten rules (principles) of the local non-statutory duties. In practice, the municipal authority rules imply that tasks the municipality wants to perform must be of some benefit to the community, must not be tasks delegated to other levels of government, and must not provide support for individuals or individual companies without specific legal cover. Municipalities are basically not allowed to engage in trade or industry. Classic examples of tasks that municipalities may carry out according to the municipal authority rules are public transportation and initiatives in leisure, culture, and sport.[59]

 

Municipal acts require legal foundation in either written law or kommunalfuldmagten. If the sufficient legal foundation doesn’t exist, the municipalities can request, and obtain, a change in the law, as happened in the face of the emergency caused by the war in Ukraine. The delegation was told that the law was amended, at request of municipalities, to allow the display of the Ukrainian flag on municipal buildings.

 

As for restrictions to the full discretion, they stem from the general ceiling for expenditure which is negotiated each year for all the municipalities between LGDK and the government. LGDK organises a meeting with all the mayors of the municipalities and discusses how to ensure that the total expenses for all municipalities at large comply with the ceiling. Municipalities must find an agreement, as the sanctions impact not only on the municipalities which, eventually did not respect the ceiling, but on all the municipalities. However, the delegation was told that since 2009 there were no cases where the total expenditures would rise above the ceiling.

 

Therefore, rapporteurs consider that Article 4 paragraph 2 of the Charter is respected in Denmark.

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.

In Denmark, the 2007 reform was primarily based on the principle of subsidiarity, according to which the various tasks facing Danish local authorities must be assigned to the authority closest to the citizens, with due respect for the nature and budgetary and professional demands of the different tasks. Most social welfare functions were transferred to municipalities. They have become the citizens’ main access point to the public sector. Responsibilities of the municipalities include preventative health care, social services, collective transport and roads, and employment. The five new regions are primarily responsible for health care, preparation of regional development plans and solutions to certain operational tasks for the municipalities. The State generally undertakes those tasks where attribution to municipalities and regions would be inappropriate, e.g. the police, the defence, the legal system, further education and research.

 

Therefore, rapporteurs consider that Article 4.3 of the Charter is fully respected in Denmark.


 

 

 

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.

In Denmark, municipalities are responsible for most of the social services. Several interlocutors pointed out that the many responsibilities transferred to municipalities in the specialised social area are raising new challenges, especially considering the demographic tendencies and the ageing population. The challenges do not stem from the interference of State legislation, but by the expenditure pressure in the health services and by the not always good coordination between municipalities and regions.

 

Actually, the border between the regional health services and the municipal health services, such as the domiciliary cares, sometimes risks producing a grey zone. It has been pointed out that the exact functional and financial interface between regions and municipalities in some cases are challenging and disputed. One example is retraining and rehabilitation of patients after hospital admission. The regions are responsible for financing treatment, whereas the municipalities are responsible for financing rehabilitation. A successful shift towards increased use of outpatient/ambulant treatment at the hospitals and decreasing length of hospitalisation means that patients are staying in their homes in the period of rehabilitation. Consequently, municipalities and regions might discuss the financial interface between treatment and rehabilitation or municipal care, and thus who is responsible for financing a specific activity in the patient’s home.

 

Several interlocutors pointed out that regions have reduced the length of hospitalisation, especially among the oldest citizens and to an even greater degree among them who receive elder care at home.  The LGDK pointed out that nursing homes are turning into small hospitals where the weakest elderly spends their last days.

 

The delegation was informed that in each region an agreement negotiated between the region and the municipalities regulates the division of competences on health and, accordingly, the financial aspects. There are 5 of those agreements, one for each region. There are also framework agreements on social services, tourism, development. In its written information to the rapporteurs, the LGDK pointed out that the cooperation is organised in each region in a setup called Kommunekontaktråd (KKR) where representatives from the municipalities within each region meet regularly. The purpose of KKR is to coordinate the contact between municipalities and regions. However, some interlocutors pointed out that this collaboration is not always working very well, and some disputes are arising.

 

Therefore, the rapporteurs consider that Article 4, paragraph 4, is partially respected in Denmark.

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.

 

Both during the visit and the consultation procedure, no issues have been raised by the interlocutors on the delegation of competences, which appears to satisfy the requirements of this article in practice.

 

Therefore, the rapporteurs consider Article 4, paragraph 5, respected in Denmark.

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.

 

In Denmark, consultation with LGDK and Danish Regions is the pillar of the local self-government system.

 

As pointed out by LGDK and Danish Regions in their written answers to the rapporteurs, institutionally, all new national legislation will be subjected to a public hearing process prior to adoption and often the opinions of LGDK and Danish Regions are taken into consideration. The two associations also participate in the hearing processes regarding new EU legislation as well as the implementation of EU directives. In addition, to the hearing processes, policies regarding employment are typically subject to tripartite agreements between the government, employers’ unions, and trade unions where LGDK represents municipalities and Danish Regions the regions in their functions as employers.

 

Aside from national legislation, LGDK and Danish Regions also negotiate agreements with the government where there is no legislative regulation. The main example of this is annual agreements regarding local and regional finances (Økonomiaftalen) which are negotiated separately by each of the associations and the Minister of Finance. Although, the annual financial agreements are not ensured legislatively, these negotiations have been ongoing for many years.

 

The delegation was told that in the last year the cooperation was strengthened, during the Covid pandemic, especially between regions and municipalities. It was also a little more formalised, with the establishment of a “contact council “between the two representative associations of decentralised authorities.

 

The dialogue between the three level of government is continuous, in normal times and in times of emergency, for example during the Covid pandemic and the Ukrainian refugee’s crisis (Denmark was ready to receive 100,000 refugees, although the actual figure was lower).

 

Therefore, the rapporteurs consider Article 4, paragraph 6, is complied with in Denmark.

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 Denmark, protection of boundaries is guaranteed both by statute and in practice. Law n. 382 of 3 May 2006 on changes in local and regional boundaries and the dissolution and establishment of binding partnerships lays down the rules applicable to changes in local and regional boundaries. It stipulates that such changes must be approved by the councils of the municipalities concerned.

 

The amalgamation of the previously existing 271 municipalities, which led to the current 98 municipalities, was basically voluntary, although there were a number of constraints. As stated in the 2013 Congress report, municipalities which opposed mergers had the option to conclude co-operation contracts with other municipalities.

 

The rapporteurs consider that the requirements of Article 5 are satisfied in Denmark.

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.

In Denmark, the municipalities are free to define their administrative structures, the status of their staff and the arrangements for their training and remuneration. The Law on Local Self-Government contains no rules on municipal administrative structures or staff training. Nor is there any rule limiting the possibility of a local council delegating its responsibilities to municipal staff.

 

The administration of the municipalities typically follows one of two models. About one third of the municipalities use the sector-based departmental model, while the other two thirds use either an executive board model or some mixed forms. The departmental model has been the traditional model for organising the administration in the municipalities but is subject to considerable local variation. In this model, the administration is divided into a number of departments/sections representing the major welfare services, each managed by a director with responsibility for the preparation of policy decisions as well as for subsequent execution. In the executive board model, a number of directors form a top management team that is collectively in charge of the administration. This team prepares policy decisions and services the committee. The model is supposed to increase coordination and collaboration across the departments and committees and strengthen the overall management of the municipality.

 

Therefore, rapporteurs consider that the requirements of Article 6, paragraph 1 are satisfied in Denmark.

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.

In Denmark, municipalities have the power to select and manage their own human resources, within the limits of the general employment law and the municipality’s finances. According to the LLG. Article 67, “Provisions on wages and salaries of and other employment conditions for municipal staff must be approved by the Remuneration Commission”.

 

Policies regarding employment are typically subject to tripartite agreements between the government, employers’ unions, and trade unions where LGDK represents municipalities in their functions as employers.

 

The 98 Danish municipalities have assigned LGDK the right to negotiate binding agreements on salaries as well as terms and conditions of employment for employees in the municipalities. LGDK cooperates closely with the municipalities so that their wishes and needs regarding wage and employment terms can be taken into account during negotiations. In addition, LGDK provides the municipalities with services such as information, guidance, courses, and consultancy regarding salary and personnel issues.

 

Municipal employees constitute 14,9% of all full-time employees in Denmark and 57,4% of all public employees. Often the municipality is the largest single employer in a local community. As employers, the municipalities have more than 100 different groups of staff – from sports centre managers to home-care helpers. Overall, the 98 municipalities have about 518,000 employees.

 

Regional employees constitute 4,6% of all full-time employees in Denmark and 17,6% of all public employees. In most regions, the region is the largest single employer. Overall, the 5 regions have about 135,000 employees.

 

During the meetings with local authorities, the delegation was often told that the lack of human resources due to the full employment, especially for the care of elderly people and the health professions, is becoming a real challenge for municipalities and regions, risking undermining the level of social services to citizens.

 

In conclusion, the rapporteurs consider that Article 6, paragraph 2 of the Charter is respected in Denmark.

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 Denmark, local representatives are elected for four years and cannot be recalled. The councils are expected to serve the entire period of four years. Should a need for replacement of a member occur, this would take place within the same electoral list by appointment of the personal substitute.

 

Danish legislation provides for the free exercise of the functions of local elected representatives.

 

The Danish mayor cannot be fired by a majority in the council against him. Only in case she/he commits and is sentenced for a criminal offense, intentionally or through gross negligence neglects a duty incumbent on him or her, or if in the opinion of 90 percent of the members of the Local Council has shown himself or herself unworthy of the esteem and trust required by the office, can she/he be fired (Arts.66a, 66b, 66c LLG). The provisions mentioned have never been used. They ensure that a Council’s decision on firing a mayor as mentioned can always be tried by the independent Electoral Commission Board (Valgnævnet). A councillor who grossly neglects the duties incumbent on him or her by virtue of his or her office is sentenced to a fine. Simple negligence of duties is not punished (Art. 61 LLG). The National Social Appeals Board (Ankestyrelsen) may commence an action for damages against a councillor who is liable for a loss suffered by the local authority (Art. 50c LLG).

 

During the monitoring visit, the delegation was informed of the growing tendency for hate speech and attacks on local elected representatives. LGDK has set up a hotline for local elected representatives, which they can contact if they experience unpleasant behaviour. The hotline will work to secure the safety of local elected representatives. If they contact the hotline, Local Government Denmark will advise them about their options.

 

The rapporteurs consider that Article 7, paragraph 1 of the Charter is respected in Denmark.

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.

In Denmark, in most municipalities, the only elected representatives considered as exercising their functions full-time are the mayors, while other municipal councillors generally devote about fifteen hours per week to their functions.

 

According to Art. 16 LLG, “(1) Councillors are a paid a fixed allowance. The Minister of the Interior and Housing shall lay down detailed rules for the allowance. (2) The local council may decide to pay committee allowances to the councillors who are members of the finance committee and of standing committees. The Minister of the Interior and Housing shall lay down detailed rules for any committee allowance and may also lay down rules allowing a local council to pay allowances to members of other committees set up by the local council”. The law provides that “(4) A councillor having one or more children below the age of 10 living at home is paid a supplementary allowance”. In addition, a councillor has the right to receive compensation for loss of earnings. According to Art. 16c of the LLG, “An employer may not dismiss an employee because he or she is included on a list of candidates standing for local election or has been elected for a local council”.

 

As for the mayors, Art. 34 LLG establishes that “(1) The Minister of the Interior and Housing shall lay down rules for the payment of allowances, loss of office payments and pension contributions to the chair of a local council”.

 

According to the information provided by LGDK to the rapporteurs, the financial compensation for local elected representatives in Denmark, is determined by the Ministry of the Interior and Housing and is regulated annually[70]. Members of a local council in municipalities with 80,000 inhabitants or less are paid a fixed fee annually of around 100,500 DKK (approximately 13,500 €). In municipalities with more than 80,000 inhabitants (14 municipalities in total), the annually fixed fee rises around 121,000 DKK (approximately 14,000 €). In the municipality of Copenhagen, around 141,000 DKK (approximately 19,000 €), is paid out annually to the local elected representatives. In addition, a supplement of around 15,500 DKK (approximately 2,100 €) is paid to members who have one or more children under the age of 10 living at home. Municipal councils can also choose to compensate local elected representatives further if they are members of standing committee. Mayors are paid an annual fee, which depends on the municipality’s population. Therefore, the size of the remuneration varies from around 793,000 DKK (approximately 106,500 €) this year to the Mayor of Ærø (Denmark’s smallest municipality) and to around 1.4 million DKK (approximately 187,000 €) to the Mayor of Copenhagen.

 

During the meetings with local representatives, the delegation was told that, despite the sufficient level of remuneration for elected representatives, it is not easy to involve young people, with children and families, in local politics and often the representative positions are covered by retirees or public employees.

 

The rapporteurs consider Article 7, paragraph 2 respected in Denmark.

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.

In Denmark, the incompatibilities are determined by several legal provisions, including Art. 4 of the Law on Municipal and Regional Elections. No issues have been raised during the monitoring visit.

 

Therefore, the rapporteurs consider Article 7, paragraph 3 is complied with in Denmark.

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.

In line with the requirements of the Charter, in Denmark the rules governing the supervision over local authorities and the powers of the central and regional authorities concerned are determined by the Constitution (Art. 82) and by the law (in Part VI of the LLG: see above).

 

Therefore, the rapporteurs believe that Article 8, paragraph 1 of the Charter is fully respected in Denmark.

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.

In Denmark, (see above) the supervision over the acts of local authorities is carried out by the State and it is limited to a control of legality. No issues have been raised during the monitoring visit.  

 

Therefore, the rapporteurs believe that Article 8, paragraph 2, of the Charter is respected in Denmark.

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.

In Denmark, no issues have been raised during the monitoring visit. Nor the financial supervision, which has been reinforced (see above), did raise any special concern by local authorities.

 

In addition, the delegation was told that there have been very few court cases regarding the municipalities’ exercise of their powers, especially as far as the kommunalfuldmagt is concerned. This is a result of the extensive supervision and the wide availability of recourse to supervisory authorities in special areas. It is also a result of an administrative tradition whereby authorities generally comply with state­ments from supervision authorities and the Parliamentary Ombudsman.

 

Therefore, the rapporteurs consider that Article 8, paragraph 3 of the Charter is respected in Denmark.

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.

In Denmark, a central principle for the transfer of competencies and funding is the “expanded total balance” principle (Det udvidede totalbalanceprincip – DUT). The principle dictates that if the government transfers an additional competence to the local or regional level, the government is obliged to ensure sufficient additional funding.

 

At present all interlocutors agreed that the resources are sufficient, although questions arise on the sustainability of the current system of welfare, in the face of the aging of the population. During the meetings it was pointed out that in the specialised social area there are certain challenges. The same comment was submitted by LGDK and Danish Regions in their written answers to the rapporteurs during the consultation procedure. With the municipal reform, the municipalities took over full authority, supply, and financing responsibility in the social area. Most social services are municipal, but in addition there are a number of self-owned and regional services and institutions. Today, the regions are suppliers of the services that the municipalities demand. The intention was to create coherence with the rest of the municipal welfare and a higher degree of proximity. Since the municipalities took over the area, expenses have risen quite sharply. The municipalities have had difficulties managing the area, which is related to the fact that the area is characterised by very expensive services / solutions – for which the citizens in many cases have legal claims. At the same time as the municipalities have prioritised more and more resources for the area, they have in recent years been subjected to fierce criticism from user organizations and national politicians. The criticism is that the municipalities downgrade the area, that the quality of the effort is not good enough and that the municipalities in the allocation of services focus too much on finances and too little on providing the service the citizen needs.

 

LGDK pointed out that, despite the fact that various governments very explicitly advocate that the quality of the area should be raised, the government have not, over the last 5-7 years, been willing to allocate significantly more funds to the area. The municipalities are thus placed in a cross-pressure, where on the one hand they are met with persistent demands for quality improvement in the area, but at the same time are left to find the funds in other municipal welfare areas if the demand is to be met. Municipalities have handled the increasing expenses regarding health services by shifting priorities from care at home (personal care and practical assistance) to nursing services. Annual financial budget pools (“værdighedsmilliard” etc.), which have become part of the block grant, are used to cover the expenditure growth in the health sector rather than providing a service lift in the eldercare.

 

The rapporteurs consider that, notwithstanding the growing challenges, which have to be addressed in the next years, Article 9, paragraph 2 is respected in Denmark.

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.

The delegation was informed that the municipalities and regions opportunities to borrow money are limited, because their capital investment primarily must be financed by their operating profit and municipal economy is designed in a way, where all municipalities have opportunities to ensure operating profit, which limits their need to take a loan. If municipalities after all need to take a loan, KommuneKredit is a much cheaper alternative to the capital market. KommuneKredit is an association, which consists of all municipalities and regions as members. The purpose of KommuneKredit is to provide loans to municipalities, regions, municipal partnerships and other companies and institutions that perform public tasks and thus can achieve 100 per cent guaranty from a municipality or a region. Loans for construction projects are given on equal terms, regardless of where in the country the borrowing comes from. The reason why all municipalities and regions can borrow on the same terms is that the municipalities and regions are collectively liable for the debt.  KommuneKredit does not profit on lending money.

 

Therefore, the rapporteurs consider that Article 9, paragraph 8 is complied with in Denmark.

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.

Although most of the State or regional grants are unconditional (non-earmarked), grants for specific projects do exist in Denmark. However, local authorities are completely free to exercise policy discretion within the purpose of those grants. No issues have been raised on this topic during the monitoring visit.

 

For these reasons, the rapporteurs consider that Article 9, paragraph 7 is complied with in Denmark.

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.

The consultation is a pillar of local government in Denmark, as said above. Aside from national legislation, LGDK and Danish Regions also negotiate agreements with the government where there is no legislative regulation. The main example of this are the annual agreements regarding local and regional finances (Økonomiaftalen) which are negotiated separately by each of the associations and the Minister of Finance. Although, the annual financial agreements are not ensured legislatively, these negotiations have been ongoing for many years and can be considered as part of the customary regulation.

 

The rapporteurs consider that Article 9, paragraph 6 is respected in Denmark.

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.

Regarding the finances of local governments, the Danish Parliament adopted a new financial equalisation mechanism for the redistribution of finances among municipalities in 2020. The aim of the new system is to ensure greater financial equality across all municipalities.

 

The equalisation system is complex and includes a set of special subsidies and equalisation schemes. The main elements are a national equalisation scheme covering all municipalities and an additional capital equalization scheme for the municipalities in the capital area. Based on a number of indicators for demographic and economic expenditure needs, 61 per cent of the inter-municipal differences in expenditure needs relative to local tax bases are equalised in the national equalisation scheme, and an additional 27 per cent in the capital equalisation scheme. The level of equalisation in the national scheme was increased as part of the 2007 reform, and the new tasks were transferred to the municipalities. Combined with the subsequent redistribution of conditional grants and less flexibility in the economic agreements to adjust taxes, this has turned general grants and equalisation into an important and viable part of municipal revenues.

 

The rapporteurs consider that Article 9, paragraph 5, is respected in Denmark.

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.

In Denmark, according to figures from the government, taxation accounts for 64 per cent of municipal revenues in 2020. Of this, 86 per cent is income tax; most of the remainder is land and property tax, followed by corporation tax. Block grants including equalisation amounted to 17 per cent of municipal revenues, and earmarked grants and reimbursements 6 per cent.

 

However, tax stop has been a core element of national tax policies since 2001, and unchanged tax levels for municipalities and regions at large have correspondingly been an integral part of the yearly agreements. The municipalities are allowed to raise and lower their taxes. But if municipalities at large raise their taxes beyond an agreed level, sanctions will be applied. However, if other municipalities similarly lower the taxes, no sanctions will be carried out. The system thus loses flexibility, as municipalities that have the economic possibilities and the political ambitions to lower taxes may refrain from doing so as they fear they will not have the possibility to raise taxes again without sanctions. However, the government and LGDK have agreed upon different incentives to support flexibility in the local taxes. During the consultation process, the government pointed out that the recent budgets show some movement in the taxes and indicate some flexibility.

 

The rapporteurs consider that Article 9, paragraph 3, is respected in Denmark.

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.

This paragraph is respected in Denmark. The financial resources are adequate, an important part comes from local taxes and the municipalities may decide their allocation. Expenditure limits are part of the annual agreement between government and LGDK and supported by a system of sanctions in order to control local expenditure and level of taxation. The limits apply to the municipalities at large, which means, that there are some flexibility, as one municipality can increase their expenses if another is holding back. The latest agreements have increased the total expenditures for municipalities at large. But in years of zero-growth, municipalities wishing to increase service expenditures cannot do so if other municipalities are not reducing their expenditures equally. In this collective action dilemma, municipalities are reluctant to lower taxes or reduce expenditures as they are not sure they will be able to increase it again at a later stage if needs are increasing and/or political preferences for higher service levels gain ground. Thus, the flexibility of the system to adjust taxes and service levels to local needs and preferences is at some point under pressure.

 

Notwithstanding the growing challenges, the rapporteurs consider that Article 9, paragraph 1 is respected in Denmark.

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.

In Denmark, the revenues of municipalities may come from different sources (own taxes and fees, transfers, other sources). Municipalities may adapt their own income to the different circumstances: for instance, if the local tax intake goes down for general economic reasons, the local authority may decide to increase local fees and charges paid by local service users (especially in urban areas) as a way to offset the decline.The fact that many aspects of the local incomes are negotiated on a yearly basis as part of the financial agreement between the government and LGDK makes the system even more flexible and apt to face emergencies and unexpected expenses, as it happened during the Covid pandemic, although the yearly definition of the income may generate an inconvenient, making the long-term planning difficult.

 

During the meetings, local authorities’ representatives pointed out that the sanction regime allows no transferals of unused budgets from one year’s ceiling to another year’s ceiling. Consequently, unused budgets end up in the municipal purse.

 

The rapporteurs consider that Article 9, paragraph 4 is respected in Denmark.

 

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.

In Denmark, municipalities can cooperate with each other in ways that limit a council’s authority, if the supervisory authority approves (Art. 60 LLG). This rule covers cases where authority is transferred, and a council’s authority is thereby limited (inter-municipal cooperation). The rule does not cover the delegation of authority, because delegation of authority can always be revoked. Cooperation between municipalities based on delegation can be established without statutory authority. Inter-municipal cooperation (Kommunale fællesskaber) can take many structural forms, but it will often be organised in a private law form of organisation (not as a limited company). The deciding factor is not the form of organisation, but whether the inter-municipal cooperation is based on a transfer of authority or delegation. Once the inter-municipal cooperation is approved, an administrative body is established.

 

Therefore, the rapporteurs believe that Article 10, paragraph 1 of the Charter is fully respected in Denmark.

 

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.

In Denmark, all 98 municipalities are members of Local Government Denmark (LGDK), which is an interest group and association of Danish municipalities, which pays a key-role in the functioning of the “cooperative system of local self-government”. LGDK describe its purpose as follows: «The mission of LGDK is to safeguard common interests of the municipalities, assist the individual municipality with consultancy services and in addition ensure that the local authorities are provided with up-to-date and relevant information». LGDK is a very powerful organisation, exercising significant influence on the political decision-making process on questions concerning local government, at a point that it is sometimes referred to as the fourth power of State. It is also worth mentioning that at the regional level, the “Danish Regions” (Danske Regioner) is an association that has as a mission to “unite the interests of the Danish regions and set political agendas for a healthier and more sustainable Denmark”.

 

Municipalities and regions may also belong to international associations, as part to their general right to associate.

 

The rapporteurs consider that Article 10, paragraph 2 of the Charter is fully respected in Denmark.

 

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.

Denmark has a long tradition of cross-border cooperation. It has ratified the European Outline Convention on Transfrontier Co-operation between Territorial Communities or Authorities (ETS No. 106), which entered into force in Denmark on 22 of December 1981;  the Additional Protocol to the European Outline Convention on Transfrontier Co-operation between Territorial Communities or Authorities (ETS No. 159);  Protocol No. 2 to the European Outline Convention on Transfrontier Co-operation between Territorial Communities or Authorities concerning interterritorial co-operation (ETS No. 169); Protocol No. 3 to the European Outline Convention on Transfrontier Co-operation between Territorial Communities or Authorities concerning Euro-regional Co-operation Groupings (ETS No. 206).

 

Denmark signed bilateral or multilateral treaties on transfrontier cooperation with Germany, Sweden, Norway and other Nordic countries, which refer to the cooperation between transfrontier local entities. It should be pointed out that in partnership with the Swedish city of Malmö, the Greater Copenhagen, was established, as a collaborative organisation for regional development and spatial planning in the largest Nordic metropolitan region.

 

The rapporteurs consider that Article 10, paragraph 3 of the Charter is fully respected in Denmark.

 

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 Denmark, the municipalities have no special right of appeal to the Supreme Court or any other court, but they must fulfil the normal requirements for having a right of action. Denmark has no special constitutional or administrative court, and all cases regarding the Constitution and the public administration are tried in the regular court system.

 

The Constitution protects municipalities against the legislative power but, as we said under Article 2, the degree of local self-government required to meet the constitutional standards is not high. However, if the legislature were to adopt legislation repealing local self-government, parties with a legal interest would be able to bring proceedings against the legislature. In such a case the municipalities would have a right of action. The court would then have to decide whether the legislation is constitutional.

 

Although the Constitution does not contain an explicit provision about the courts’ power to adjudicate the constitutionality of acts, their competence in such matters refer back to Supreme Court practices from around 1920. As a consequence of a deferential judicial tradition, common to all the Nordic countries, Supreme Court’s judicial review of specific legislation has traditionally been quite cautious, since in order for a law to be overturned by the Supreme Court, its variance with the Constitution has to be of significant certainty. Only once in the history of the Constitution has the Supreme Court deemed a law unconstitutional
(U 1999.841 H). In that particular case (known as the Tvind Case), the Folketinget had passed a bill that denied a number of schools the possibility of receiving government funding. The Supreme Court ruled that this was in violation of Article 3 of the Constitution about the separation of power.

 

During the meeting with the Supreme Court, the delegation was told that, although no cases on the infringement of local self-government have been raised, judicial protection is guaranteed not only in extreme cases, for example if the legislature were to abolish local self-government, but also as a consequence of the presumption of non-compliance with the Charter, which could be alleged by a municipality.

 

Considering the availability of judicial remedies and the fact that no issues were raised by the interlocutors during the monitoring visit, the rapporteurs consider that Article 11 is respected by Denmark.

 

Article 12.1
Undertakings - Non ratified

Each Party undertakes to consider itself bound by at least twenty paragraphs of Part I of the Charter, at least ten of which shall be selected from among the following paragraphs:

 

– Article 2,

– Article 3, paragraphs 1 and 2,

– Article 4, paragraphs 1, 2 and 4,

– Article 5,

– Article 7, paragraph 1,

– Article 8, paragraph 2,

– Article 9, paragraphs 1, 2 and 3,

– Article 10, paragraph 1,

– Article 11.

Article 12.2
Undertakings - Non ratified

Each Contracting State, when depositing its instrument of ratification, acceptance or approval, shall notify to the Secretary General of the Council of Europe of the paragraphs selected in accordance with the provisions of paragraph 1 of this article.

Article 12.3
Undertakings - Non ratified

Any Party may, at any later time, notify the Secretary General that it considers itself bound by any paragraphs of this Charter which it has not already accepted under the terms of paragraph 1 of this article. Such undertakings subsequently given shall be deemed to be an integral part of the ratification, acceptance or approval of the Party so notifying, and shall have the same effect as from the first day of the month following the expiration of a period of three months after the date of the receipt of the notification by the Secretary General.

Article 13
Authorities to which the Charter applies - Non ratified

The principles of local self-government contained in the present Charter apply to all the categories of local authorities existing within the territory of the Party. However, each Party may, when depositing its instrument of ratification, acceptance or approval, specify the categories of local or regional authorities to which it intends to confine the scope of the Charter or which it intends to exclude from its scope. It may also include further categories of local or regional authorities within the scope of the Charter by subsequent notification to the Secretary General of the Council of Europe.

ACCESSION

to the Council of Europe 5 May 1949

RATIFICATION

of the European Charter of Local Self-Government 3 February 1988

CONSTITUTION | NATIONAL LEGISLATION

The principle of local self-government is guaranteed under the Danish Constitution, Article 82 of which reads as follows: “The right of the municipalities to manage their own affairs independently under the supervision of the State shall be laid down by statute”.



30Ratified provision(s)
0Provision(s) with reservation(s)
4 Non ratified articles
29Compliant Provision(s)
1Partially Compliant Provision(s)
0Non-compliant Article