Netherlands - Monitoring report

Date of the monitoring visit: from 25 to 27 January 2021
Report adopted on: 17 December 2021

This is the third report on the state of local and regional democracy in the Netherlands.  It underlines that the Dutch authorities seek on the whole to implement the principles set out in the Charter and are ready to consider the pertinence of ratifying some of the provisions not accepted at the time of ratification of the Charter. The report underlines the efforts made at municipal level, in particular in the context of the “Dualisation” reform and the modification of the Municipalities Act. It also refers to the good relationship between central and local authorities and to the authorities’ desire to ensure citizen participation in the political decision-making process. However, the report does express some concern about the fact that the principle of local self-government is not recognised in the Constitution or the relevant legislation. Moreover, the competences of municipalities and provinces are not clearly delimited and are restricted because of the medebewind co-governance mechanism. The mechanisms for consultation of municipal authorities by central government are also inadequate. Lastly, the report highlights the lack of financial resources of local authorities, which are dependent on state transfers and whose income has been limited by the local taxation reform.


It is recommended that the Dutch authorities apply Article 2 of the Charter and define the principle of local and regional self-government in the Constitution or in domestic law. They are urged to clarify and reinforce the “autonomous” and “proper” competences of municipalities and provinces, while also improving the mechanism for consultation between central government and local authorities. The Dutch authorities are also asked to amend the law on municipal and provincial finances and to improve local taxation so that local authorities have greater autonomy. Lastly, the authorities are encouraged to reconsider the relevance of the declaration of non-acceptance of certain provisions of the Charter made when the Charter was ratified by the Netherlands.

Article ratified Ratified with reservation Non ratified
Compliance Partial compliance Non compliance To be determined
Unfold all
Fold all
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.

There is no express or direct recognition of the principle of local self-government in the legal framework of the Netherlands, neither in the Constitution nor in legislation. This has been noted already, with regret, in the Congress Recommendation 352(2014). The situation has not changed since then.

The lack of a clear constitutional or legislative foundation bears risks for local powers to be limited by simple amendments of ordinary legislation. Without having to consider and respect a constitutional principle, the actual scope, degree and extension of local self-government in the Netherlands is entirely attributed to the discretion of the legislator. Also, decentralised authorities do not have a legal basis for challenging central government decisions regarding their autonomy (however, even if there were a constitutional foundation of local self-government, municipalities would still have no procedure for such challenges, as there is no Constitutional court in the Netherlands).

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.

In the Netherlands, municipalities have considerable powers and competences and fulfil a remarkable array of tasks and functions. Since 2015, the competences and tasks have been further enlarged by the decentralisation process. Municipalities are largely autonomous in their powers and have great discretion in carrying out their tasks. There is a general culture of decentralisation and pragmatism which favours autonomous management of local affairs and may even fill, to some extent, the gap of missing legal safeguards.

  • , municipalities are very much dependent on financial transfers from the central government which, in many cases, also means policy-related involvement (see below, article 8). Furthermore, many tasks are performed through a co-governance system (medebewind). According to some interlocutors, the degree of self-government is thus relatively limited and increasingly challenged. There is preoccupation that the degree of discretion and autonomy of local authorities appears increasingly restricted due to a lack of financial resources and a financial dependency towards the national government.

The scope of local self-government in the Netherlands can currently be defined as “substantial”, consistent with the Dutch culture and traditions. However, recent developments (decentralisation) and the weakness of legal foundations open wide areas to political discretion and interference, which may endanger the municipalities’ “own responsibility” for many of the public affairs they are currently entrusted with. Therefore, the requirements of Article 3 para.1 of the Charter appear satisfied by the present situation in the Netherlands, with regard to the “substantial share of public affairs”, but attention needs to be paid to local autonomy in the management of these affairs.

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.

As the representative body at municipal level and the highest authority in the municipality, the directly elected Municipal Council (Gemeenteraad or Raad) has formal authority over local democracy (Art.129 Const.); it is chaired by the Mayor who shall guarantee procedural correctness. The implementation of policy is managed by the municipality’s executive: the Board of the Mayor and the Aldermen (College van Burgemeester en Wethouders) and the Mayor (Burgemeester); the Mayor chairs the Board of the Aldermen (Art. 34 Municipalities Act). The Aldermen are elected Councillors who cease in their function in the very moment they are elected to become part of the executive (articles 35 and 36b Municipalities Act; appointments from outside the council are also possible). This is the result of the “dualisation reform” of 2002, which stressed the separation of functions and responsibilities between Board and Council. The Council can ask an Alderman to resign and even express a non-confidence vote with regard to Aldermen (art. 49 Municipalities Act). Regarding Council and Aldermen, the requirements of democratic election and responsibility, respectively, laid down in article 3.2 of the Charter are therefore fulfilled (except for non-elected mayors and the Kings Commissioners)

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.

Municipalities have a general competence called "open household", which is constitutionally protected (Art. 124, Constitution). According to the Municipality Act municipalities can, within their boundaries, adopt their own bye-laws, levy taxes and develop their own policies on any policy area, as long as it does not conflict with "higher law". Municipalities fulfil a wide range of tasks and functions among which, not least, important tasks for implementing climate policies.

However, as has already been stated in the 2014 Monitoring Report (paragraph 66), “there is no comprehensive or codified set of competences for municipalities in the legal system of the Netherlands. The Municipalities Act does not contain such enumeration. The actual competences of municipalities in the different sectors of governmental action are identified by the applicable laws and regulations in each of those sectors. Therefore, there is no “hard core” of essential or “inherent” competences for municipalities whatsoever. Accordingly, the competences granted to local authorities in the different sectors of governmental activity may be widened or reduced by the State legislature. This assessment is still valid, although, in practice, there is a clear distribution of competences and powers. Where it is not, in practice, the specific problem is addressed and solved in a cooperative manner, according to interlocutors in the spirit of the “one government” philosophy.

The lack of clarity regarding competences has already been addressed by the previous Congress Recommendation 352(2014). According to the VNG, confirmed by other interlocutors during the meetings, there has been no progress regarding the clarification of the areas of competence of municipal and provincial authorities, including those set out in the different sectors of government activity, in line with the spirit of Article 4.1 of the Charter. Thus, the Rapporteurs conclude that the requirements of Article 4.1 of the Charter are only partially satisfied and that a clearer legal entrenchment of the competences in the legislation would be desirable in order to provide better clarity and protection for local authorities.

Article 4.2
Scope of local self government - Article ratified

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

According to the Constitution and the Municipalities Act the municipal councils make their own regulations concerning their own local affairs (Art. 127 Const. and 147 and 149 Municipalities Act). These regulations are called General Local Regulations (abbreviated: APV). They contain numerous provisions, especially those on public order and safety. The Association of Dutch Municipalities (VNG) has elaborated a model APV that individual municipalities can use with all the amendments they consider necessary in their respective local situations. While the APV is based on the autonomous competency of a municipality, each municipality can also issue local regulations on specific topics legally based on their delegated competencies or medebewind. These specific regulations concern all areas of local competences and therefore vary greatly.

Due to the nature of legislation, municipalities have a lot of room for manoeuvre, but responsibility for inflow from other domains (medical and education) into the youth care system has not been accompanied by own funding sources or a sound financial safety net. This means that the preconditions for municipalities to be able to fulfil their increased responsibilities have not grown in parallel. Interim unfirm measures as a result of court rulings and national interventions have even reduced the room for manoeuvre for municipalities.

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.

  • order to substantiate the distribution of competences between the central government and the decentralised authorities and the principles on which it is based, the Royal Commission ‘Parliamentary system’ has recommended to clarify the main aspects of decentralisation. One of these is the principle of subsidiarity which is defined in the Municipalities Act (Art. 117.2, and in the Provinces Act): “2. Proposals for measures that treat certain matters as part of central government or provincial policy may be made only if the matter in question cannot be dealt with efficiently and effectively by the municipal authorities.” The decision rests with the Minister (Art. 117.1: “1. Our Minister promotes decentralisation for the benefit of the municipalities”).

The principle of subsidiarity is also applied in practice. Decentralisation in the social domain can be seen in close connection to the implementation of the principle. In fact, the most important objectives in this process were quality and social involvement. Therefore, in 2015, tasks on youth care were decentralized and assigned to the municipalities, together with tasks in the field of care (Social Support Act). In addition, tasks related to work and social security were merged (Participation Act). With their knowledge of the specific local situation, municipalities are certainly best equipped to organise the right care in the right place. But for doing so, they need a structurally adequate budget and the right competences. In order to fulfil those tasks, the general grant which municipalities receive from the Municipalities Fund has been increased by one-third (according to the information provided by the Ministry of Interior). However, although decentralisation as such was generally not put in question, many interlocutors complained about the administrative burden and about the lack of sufficient funding for the additional responsibility. In particular, elements from other domains (health and education), which are part of the youth care system, have not been compensated by additional own sources of income or transfers

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.

The rapporteurs conclude that the requirements of Article 4.4 of the Charter are generally satisfied, as the powers of local government are normally full and exclusive and limitations as well as the obligation to perform certain tasks is provided in legislation. Over time, co-governance has evolved into decentralisation, which is increasingly used and, in theory, should permit wider autonomy in carrying out tasks. The practice is, however, often different, and risks to limit local autonomy.

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.


It appears that a wider shift from co-administration to intergovernmental co-operation has taken place over the last years. In the past, municipalities merely implemented the policy of the central government as established in more or less detailed administrative agreements. The increasing complexity of tasks and mutual dependencies, in particular regarding major social tasks, was taken into account by the IntergovernmentalProgramme (IGP). The IGP was signed in 2018 by the central government and the organisations representing municipalities, provinces and water boards. The programmatic approach shall permit equal programmatic cooperation between governments based upon equality and a clear division of roles according to the functions of each level. It is based on the following political principles: (a) acting collectively on the basis of social challenges rather than on the national government’s coalition agreement; (b) a single integrated joint programmatic approach instead of sectoral agreements; (c) a transparent cooperation process; (d) focus on implementation of social tasks in an equal partnership.

Considering the current situation, discretion of municipalities in carrying out decentralized and delegated tasks seems generally respected, although the political character of decentralisation and the lack of legal safeguards adds to the preoccupations for a reduction of local autonomy. The rapporteurs conclude however that the requirements of article 4.5 of the Charter are generally satisfied.

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.


The Ministry of the Interior and Kingdom Relations consults their representative organisations on legislative drafts concerning local and regional authorities, including legislative proposals initiated by other ministries. Legislative proposals are submitted to the VNG and the IPO before they reach the chambers of Parliament, which gives them the opportunity to express an opinion and to suggest changes. The Ministry stresses the importance of these consultation mechanisms in the early phase. In its advisory opinion on the legislative draft, the Council of State assesses if local authorities have been adequately consulted and if their response has been considered in the proposal. Consequently, the opinion of the consulted associations is taken into account in the final legislative proposal to be discussed in Parliament. The Ministry follows the same consultation procedure with regard to other proposed regulations (general measures of administration, ministerial regulations) that affect the local or regional government or require regulation or administration by local and regional authorities.

The Rapporteurs are quite impressed by the range of different consultation activities and inter-administrative agreements as well as by the monitoring of these activities through the Council of State. Despite some of these activities not being regulated in legislation, the requirements of Article 4.6 appear overall satisfied.

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.


As a rule, municipal boundaries can only be changed by an Act of Parliament, upon initiative of the local bodies concerned (Article 123 para.2 Const.). The Municipalities Act does not include provisions on the matter. A specific piece of legislation, the “Wet algemene regels herindeling” (Wet Arhi, General rules on reclassification)[32] provides that municipal boundaries can change whenever a new municipality is established or suppressed, when two or more municipalities merge, or whenever a territorial modification concerns at least 10% of the local population. It also contains the rules on the election of new representative bodies and for the situation of local authorities’ staff of the municipalities concerned.

Today, the municipal average size is large, especially compared to the OECD or EU average (respectively 9.700 and 5.900 inhabitants in 2017) as well as the median size (26 500 inhabitants). Only 2% of municipalities have less than 5.000 inhabitants (vs 44% on average in the OECD).[33] Over the years, a continuous process of municipal mergers has led to a gradual but significant drop in the number of municipalities, from 913 in 1970, to 443 in 2007, 380 in January 2018 and 355 in January 2019, after several mergers of municipalities in the North and West of the Netherlands at the end of 2018. By contrast with the past, when it was argued that large municipalities always needed more space, for example for housing, and therefore merged with smaller surrounding municipalities, nowadays the reasons for this trend are the transfer of certain tasks and powers to the municipalities in the context of the decentralisation process and the necessary efficiency and governance structures of larger municipalities to cope with that process. However, no scientific studies have been indicated as evidence for this.

In March 2019, a new “Policy Framework for Municipal Revision” was adopted to structure the process of municipal mergers. It states that mergers should preferably occur bottom up and contains guidelines against which the cabinet assesses and tests proposals for municipal and provincial reorganization. Thus, primarily municipalities should themselves decide whether to merge. Only in special cases, the province may initiate the process, e.g. if necessary due to regional developments or if the administrative power of one municipality is so much weakened that it is unable to perform its tasks. A case-by-case consideration based on local and regional circumstances, developments and context is required in which the following elements shall be assessed: (a) the support base; (b) the administrative power; (c) the internal cohesion and proximity to governance; (d) the regional cohesion. As any municipal re-organisation is a radical change for residents, but also for companies, institutions and the administrative environment of municipalities, the reclassification advice regarding the intended merger must include the opinion of these stakeholders. Usually, the municipality organises information meetings and participation evenings for stakeholders, after which the municipality or province draws up a reclassification design. Anyone can submit an opinion regarding this reclassification design (within 8 weeks). However, a referendum is neither prescribed nor held in practice.

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.

Municipalities enjoy a fair degree of autonomy in the field of internal organisation, guaranteed by
Articles 124.1 and 128 of the Constitution. Within the limits of State legislation, the council and the executive board may decide to establish different committees (art. 82-94 Municipalities Act): council committees for preparing plenary decisions (art. 82), executive committees for managing delegated powers (art. 83) as well as “other” committees (art. 84).

The auditing is another sphere where municipalities can adopt autonomous organisational decisions. The Municipalities Act imposes on municipalities the duty to have a specific organ to discharge that duty, but municipalities are free to choose any of the following options: (a) to set a local “audit office” (b) to establish an “audit office function”; (c) if the first option is adopted, to decide whether the municipality should have its own, specific audit office, or whether several municipalities should set up a joint audit office.


As regards Article 6 para.2 of the Charter, Dutch municipalities have the power and the autonomy to recruit high-quality staff on the basis of merit and competence. There is no centralised system for recruitment, in the sense of a nationwide, French-type territorial public service. The Municipalities Act lays down specific provisions dealing with the municipal secretary (Articles 100-106) and the municipal clerk (Articles 107-107e). The municipal executive is to regulate the replacement of the municipal secretary, but the council is to appoint the municipal clerk, and suspend and dismiss that officer.


Consequently, the current Dutch system meets the requirements enshrined in Article. 6 of the Charter.

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

Recruitment is decentralised. Municipalities have the power and the autonomy to autonomously recruit high quality staff on the basis of merit and competence. The Municipalities Act contains specific provisions for the municipal secretary appointed by the executive (Articles 100-106) and the municipal clerk appointed by the council (Articles 107-107e). The system meets the requirements of Article 6.2 of the Charter.

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.

The Netherlands has a long tradition of local democracy and the status of local appointed and elected representatives as well as the conditions of performance of their duties at the local level is generally assessed as positive. This is confirmed by the latest biennial report on the current state of Dutch democracy and public governance, published by the Ministry of the Interior. In general, the findings are positive with regard to support and remuneration for local elected representatives. In addition, there are several possibilities for facilitating and supporting the exercise of local representatives’ activities, such as the clerk or the registry (art. 107 Municipalities Act), budget for extra support (depending on a municipality’s policy), etc. The municipal council is assisted by a secretariat (“griffie”) for its support and according to its specific needs. More investment in these structures would be a possible way to guarantee logistical support as well as expertise in assisting councillors in their work. However, the use of these possibilities is decided by the single municipality and not always fully exhausted.

In particular for Councillors as lay persons with a part-time function it is increasingly difficult to cope with the vast and complex policies and issues to be decided at local level. By consequence, in the course of the ambitious decentralisation process, most councils limited themselves to a purely reactive role, not seizing the opportunity of the new policy field (social welfare tasks) to rethink their institution’s central position within the local community. This makes the role of the opposition even more ungrateful, as the latter is limited to the work in the council, by contrast with the majority, which acts mainly through the Board of Aldermen. Also, many tasks are outsourced to semi-independent organizations (‘uitvoeringsorganisaties’), for instance within the context of joint agreements between more municipalities, e.g. to provide youth care or get people to work. There is very little control that municipal council subsequently have over the choices made by these bodies.

  •  additional concern, which has emerged from the meetings with the Dutch interlocutors, is the increasing number of incidents with aggression, intimidation, threats and violence, which seem to become a serious issue, at least in some municipalities. The worrying trend is confirmed by a recent survey: 25% of local officials has experience with aggressive behaviour and violence, 2% even with physical violence.[36]
  •  to the rapporteurs’ assessment, elected office holders can freely exercise their functions, in conformity with Article 7.1 of the Charter. However, in some cases the security environment gives rise to concern and should be carefully monitored in order to protect office holders from personal aggression.


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

Municipal Councillors are not full-time politicians and usually have another day job. They do not receive redundancy pay but financial compensation in the form of a monthly fee. Every representative receives the same remuneration; the amount depends on the number of the municipality’s inhabitants according to national regulation (Rechtspositiebesluit decentrale politieke ambtsdragrers), from which municipalities do not have the right to deviate.

The salary of aldermen also depends on the number of inhabitants of the municipality. Financial compensation for alderman and mayors is generally considered as adequate.

Dutch mayoralty is a full-time activity and mayors receive a remuneration in proportion to the number of inhabitants of their municipality (according to the same national regulation as for councillors from which municipalities and provinces must not deviate)

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.

As provided by Art. 129.5 of the Constitution, all functions and activities incompatible with the holding of local elective office are determined by the Municipalities Act: for councillors (art. 13), for aldermen (art. 36b), for mayors (art. 68) and for members of the municipal audit office (art. 81f).

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.

The supervision over municipalities by the provinces and central government is constitutionally anchored (Article 132) and regulated in the Revitalisation of General Supervision Act, which entered into force in 2012.

Article 8.2
Administrative supervision of local authorities' activities - Non 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 accordance with the Constitution, the central government can at any given time demand compliance with national laws. If the government considers a local or regional decree to be in violation of a national law or damaging to the public interest, it may, under Article 268 of the Municipalities Act and 10:34 of the General Law on Administration, cancel such decree. It is also possible for a mayor to request for the cancellation of such decree (based on article 273 Municipalities Act). Nevertheless, this form of intervention from the national authority at local and regional levels has become increasingly infrequent over the past decades.

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.

If a decision of a given municipal or provincial authority is not in line with the law or with the general interest, the Minister of Interior and Kingdom Relations has the competence to suspend or quash that decision. However, there is a pre-established procedure to be followed (Articles 268-281 of the Municipalities Act). Before considering the use of the above competences, the Minister tries to solve the problem by consulting the authority that has taken the decision. By obtaining information about the background of the decision and, if necessary, suggesting alterations to or withdrawal of that decision, the Minister strives for a cooperative solution. As a result, in practice, the Minister has not quashed municipal or provincial decisions since the last report in 2014.

The Provincial Executive supervises the financial position of municipalities in each province. The Minister of the Interior and Kingdom Relations is responsible for the financial supervision of the provinces. If municipalities or provinces fail to comply with the Decision budget and Accountability Act (BBV), the supervisory body must accord the expenditures, programmes, budget and new policies.

The rapporteurs consider the proportionality principle in the intervention by supervisory authorities respected; thus, there is compliance with Art. 8.3 of the Charter.

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.

According to article 132.6 of the Constitution “the taxes which may be levied by the administrative organs of provinces and municipalities and their financial relationships with the central government shall be regulated by Act of Parliament”. This is implemented by the Municipalities Act, which includes extensive provisions on municipal finances (Articles 108 and 186-258) as well as by the Financial Relations Act (Financiële Verhoudingswet), which regulates intergovernmental financial relations. Article 108.3 of the first 2 of the latter states that whenever new tasks are decentralized to municipalities or provinces, the financial consequences must be made clear, as well as the way in which these consequences can be covered. This is fully in line with Article 9.2 of the Charter which prescribes that “Local authorities' financial resources shall be commensurate with the responsibilities provided for by the constitution and the law.”

Whether local resources are commensurate or not, is therefore not a legal question, but rather one for which an assessment of the practice is necessary. In fact, despite the statement by the Minister of Interior and Kingdom Relations that municipal tasks are funded “attune to the competences of municipalities and to their set of tools”, it appears that the financial situation of the municipalities in the Netherlands is quite worrying. According to information provided by the VNG, there are more than a hundred municipalities that did not or hardly managed to present a balanced budget for 2020. Thus, the issue of commensurate resources is controversial.

The gap between the responsibilities of municipalities and the available budget for fulfilling these is widened by the upscaling rebate introduced by the central government with the intention to scale up (merge) municipalities thus achieving benefits. While the upscaling was never carried out, the rebate has been introduced in the national budget, rising to € 975 million in 2025. Although the policy has not been implemented, interlocutors stressed that municipalities have to pay for it, despite not receiving any benefits!

According to this assessment of the rapporteurs, currently, the financial resources of local government are hardly commensurate with the (additional) tasks they must perform since the decentralisation; a particular concern regards rural municipalities and those with a lot of poor people. This leads to the conclusion that despite the legal regulation which provides for the allocation of commensurate resources there is, in practice, only partial compliance with Article 9.2 of the Charter.

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.

Fiscal rules and borrowing capacity: Municipalities and Provinces are allowed to borrow on the credit markets and to issue bonds without any formal authorization by the central government. No ceiling for local government borrowing is formally in place and, as a general rule, local authorities can borrow until they are able to serve their debt-servicing expenditures. Nevertheless, in order to comply with the medium-term budgetary framework that imposes a “golden rule” (in respect of EU obligations), borrowing is used only to finance investments.

After having dropped from 2000 to 2007, deficit and debt at sub-national levels began rising, reaching a peak in 2012. Since 2012 the debt level has again been steadily decreasing. In 2016, the debt of the Dutch sub-national government sector amounted to 11,2 % of GDP. This is well below the OECD average (24.5% of GDP and 20.7% of public debt in 2016). In 2018, the consolidated gross debt of the local government sector amounted to 7.3% of the Dutch GDP. Outstanding debt is made up primarily of financial debt (70%); bonds as a percentage of total financial debt remain very limited (2.8% in 2016), loans making up the bulk of the financial debt stock (97.2%). The Municipal Bank of the Netherlands (BNG) is a funding agency established by the Dutch Association of Municipalities in 1914 in order to help municipalities access credit markets. Around 90% of its assets are loans to municipalities and other public bodies. Half of the bank's share capital is held by the State of the Netherlands and the other half by municipal authorities, provincial authorities and water boards. The Waterschapsbank is another Dutch bank specialised in loans to local governments.

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.

  •  two Municipalities and Provinces Funds have become the main source of revenue for municipalities and provinces (73,2% in 2016). Municipalities (and Provinces) are assigned a certain degree of flexibility in spending the resources of the general grants, but these grants must be used to perform the assigned delegated responsibilities. While municipalities enjoy considerable autonomy for their policy in the decentralised area of youth and can determine themselves how they perform their new tasks, it appears that this autonomy is not accompanied by proportional financial autonomy. It therefore appears that the decentralisation process has led to a greater financial grip of the central government on the municipalities.[55]

Earmarked grants also account for a large share of sub-national government revenues and are tied to the performance of specific activities by local authorities These earmarked funds (decentralisation and specific grants) are meant to cover the expenses of obligatory delegated tasks in areas such as primary education and social services.

The rapporteurs conclude that there is formal compliance with Article 9.7 of the Charter. However, the decentralisation reforms have further increased the dependency on resources provided by central government and, correspondingly, its influence.

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.

Consultation has been examined regarding compliance with Art. 4.6 of the Charter (see above, 3.3.6). The Municipalities Act, the Provinces Act and the Intergovernmental Relations Code all stipulate that municipal and provincial government have to be “informed and consulted in good time” about new legislation and policies that concern the respective government. The Code on Intergovernmental Relations specifies the relationship between the different levels of administration and contains a checklist on how to involve VNG and the IPO in policy making and the formulation of laws. This consultation also includes the financial impact of new policies or decisions vis-à-vis local authorities.

Article 9.5
Financial resources of local authorities - Non 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.

N.B. In their instrument of acceptance (1991), the Netherlands made a declaration that “it shall not consider itself bound by the provisions of Article 9.5 of the Charter”. It appears that the Netherlands decided to not commit itself to article 9.5 as it conflicts with the special status foreseen in Art 12 Financial Relationship Act (see paragraph 168). However, the delegation has received information also on other aspects of article 9.5.

The rapporteurs conclude that there is only partial compliance with Article 9.5 of the Charter, as the current system does not eradicate existing inequalities, which should lead to a re-consideration.

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.

Sub-national governments' own revenues represent only a small share of local revenues. Municipalities collect taxes, as set by the Municipalities Act (articles 216-258), but local taxation is modest and primarily linked to the property of real estate and totaxes on dog ownership and tourists. Administrative fees and charges can only be used to cover the costs of the service they are linked to and the municipality is not allowed to make a profit on these services. In fact, revenue from local taxes is lower in the Netherlands than in many other European countries. As a result of the decentralisation process, the share of own income fell even further, from 33% in 2000 to 27.2% in 2019, because the transfers from the national government increased faster than the own income. With the decentralisation of the social domain in 2015, “other revenues” of local government increased by 6 billion Euro as the additional tasks transferred to municipalities were mainly financed through transfers from the central government. Thus, local authorities are mainly financed by central government based on set formulas, i.e. without tax sharing.

Regarding the improvement of local taxation an official report has been published in 2020 (a co-production of the Ministry of Interior, the Ministry of Finance and the VNG). It presents policy options for reforming the municipal tax area. One of the options is to significantly expand the municipal taxing capacity while diminishing the Municipalities Fund by the same amount in order to strengthen the financial autonomy of the municipalities.

The rapporteurs conclude that the own income of municipalities is regulated in only partial compliance with Article 9.3 of the Charter. In fact, it must be noted with a certain concern that the decentralisation reforms have further reduced the already small local tax area. Thus, it appears necessary to launch a debate on how to enlarge this area in the near future.

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 share of local and provincial government in public expenditure in the Netherlands is below the OECD average (16.2% of GDP and 40.4% of public spending in 2016). However, the share of Dutch SNGs in public staff spending is significant, close to the OECD average (62.9%) and above the OECD average for unitary countries (43%), reflecting important administrations, especially at the municipal level (there are on average 185.000 civil servants working in municipal governments compared to 13.000 officials working in provincial government). Within the expenditure on subnational governments, provinces accounted for 7%, and municipalities and inter-municipal bodies for 67% (the remaining part is shared by public water boards and other local government bodies).

Provinces and municipalities are mainly funded by – general – grants from the central government. More than 73% of their revenue comes from transfers, whereas their own tax revenue represents only 10.1% (2016), with municipalities accounting for 58% and the provinces for 16%. The remaining 26% is the share of public water boards as they collect their own taxes and levies (wastewater-treatment levy, water systems levy and a pollution levy).

The ability of municipalities and provinces to raise own resources is very limited. Revenue autonomy (own revenue relative to total resources available) at the local level (provinces and municipalities) is lower than the EU average (28% versus 53% in 2018), which entails a dependency on central government transfers that is above the EU average (72% versus 48%). Local own revenues represented 9% of total government revenues in 2018, a value that was lower than the EU average (13%). The share of local taxes in total income is much higher for provinces (20%).

On the expenditure side, a large amount of the budget is spent on social welfare and unemployment benefits (15% of total expenditure), specialized (health-)care services (15%), and reintegration and promotion of job participation (4%).[43] The central government is involved in how some parts of the budget are spent; this even applies to revenue from local taxation. Other parts of the budget can be spent freely (here, the problem is rather the limited degree of discretion due to the lack of financial resources).

The rapporteurs conclude that overall, the entitlement to resources appears as adequate, although below OECD and EU average. A weak point is the high dependency on central government grants (‘Municipal Funds’), although these are mostly general in nature. It appears that municipalities may decide mostly independently on how to spend their budget. The requirements of Article 9.1 of the Charter are therefore generally satisfied.

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.

Local governments' finances are strongly dependent on central government transfers (73,2% in 2016): the Municipal Fund (Gemeentefonds) which includes an integration grant, a decentralisation grant (including a new Fund for social affairs to accompany the decentralisation in the social sector, which in the meantime became part of the general grant) as well as specific grants from departments meant to cover the expenses of obligatory delegated tasks. General transfers to municipalities and provinces are managed by the centrally governed fund and consist of a lump-sum payment. It has a strong equalising function, and the formula takes into account spending needs and tax capacity of municipalities, with the aim to enable all municipalities to finance equivalent service levels at equivalent tax rates (60 different criteria are used for its allocation, such as population, earning capacity, real estate values, demographic variables, etc.). Municipalities also receive transfers from provinces (e.g. investment grants for roads and public transport).

  •  additional problem is that the total amount of general transfers is indexed to total central government expenditures, creating a pro-cyclical correlation between local and central spending. This creates uncertainty and difficulties in medium-term planning for municipalities which do not know for sure on how much money to count on from their most important resource. In theory, according to the Minister of the Interior and Kingdom Affairs, this should be known for a four years-period, but there is an annual assessment which has meant – due to the link to the national budget – that for three years in a row there have been reductions in the available budget. Giving municipalities certainty regarding their most important financial resource is fundamental for their financial planning and even more important as the share of own income in the total income of local government fell from 33% in 2000 to 27.2% in 2019, due to the decentralization process in 2015.

The rapporteurs conclude that there is only partial compliance with Article 9.4 of the Charter regarding the diversification of municipalities’ resources. Not only are approximately three quarters of the local income determined by central government transfers, but these resources are also bound by a correlation with total spending at central level that makes them difficult to predict and thus complicates medium-term planning. A reflection on more diversified resources which are more predictable seems necessary (for example, on a share in national taxes).

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 the Netherlands, there is a long and vivid tradition of cooperation among municipalities in all policy areas, ranging from mandatory to voluntary forms of cooperation. According to the Joint Regulations Act (Wet gemeenschappelijke regelingen, Wgr), two or more municipalities can establish joint regulations in order to serve one or more certain interests that those municipalities share. A joint regulation often establishes a public body, but this is not mandatory. Municipal cooperation by means of a joint regulation is also possible across provincial borders and provinces and water boards can take part in the regulation, too. The main areas of municipal cooperation are in the social domain (e.g. youth care, societal support and public aid), safety (the safety regions, as prescribed by law) and the spatial domain (the environmental services, also prescribed by law).

However, the current framework for various forms of intermunicipal cooperation provided by the Joint Regulations Act (Wgr), is often experienced as complex and restrictive. Formally, the democratic legitimacy is guaranteed as the council authorizes the establishment, alteration and abrogation of each joint regulation in which the municipality participates. In addition, the council of each participating municipality is represented in the General Administrative board of the joint regulation. The representatives are accountable to their own municipal council with regard to the policy of the joint regulation.

But more in general, this “regionalisation” (i.e. intermunicipal cooperation within a certain regional area) has a major impact on the councils, boards of aldermen and the municipalities as a whole. Many subjects previously decided on by municipal councillors themselves can now only be influenced indirectly which raises issues with democratic control, legitimacy and accountability of decision-making in the regional area. According to the VNG, a fundamental debate is needed about the usefulness and necessity of inter-municipal cooperation, in addition to the search for legal solutions within the framework of current legislation: VNG has presented comments on a bill for improving the Wgr.[58] An amendment to the Joint Regulations Act to improve the legitimacy of joint arrangements and strengthen the position of the municipal council, has been proposed to parliament and has passed the Second Chamber. However, a wider perspective is needed: during the debate on the amendment, the Second Chamber has asked for a fundamental debate on the development of local and regional government in The Netherlands. There seems to be consensus on the necessity of change; however, any new policy will be made by the new government.

The rapporteurs note with satisfaction that intermunicipal cooperation is well and frequently used in various forms. They conclude that there is full compliance with Art. 10.3 of the Charter. However, the ample use of cooperation, and also “regional deals” suggest a reflection about democratic control, legitimacy and accountability of decision-making, which need to be considered in a future reform of the legal foundations of this cooperation.

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 order to facilitate dialogues between the different levels of government, Provinces and Municipalities have united their representation in two associations: Provinces have organised themselves in the Interprovinciaal Overleg (IPO) and municipalities in the Vereniging van Nederlandse Gemeenten (VNG) which represent each layer in direct dialogues with the government; there is also an association representing the waterboards (UvW).

The two associations, VNG and the IPO, respectively, are inclusive, provide assistance and represent the municipalities and the provinces in negotiations. In fact, intergovernmental negotiation is deeply rooted in the Dutch tradition and culture. A wide range of issues is subject to political agreement between central government and provinces and municipalities, in particular at the beginning of a new legislature with the new government. After this, twice a year, the Prime Minister and the presidents of the VNG and the IPO meet to keep track of the common agenda in the so called “three-tier conference". Therefore, VNG and IPO are recognized as interlocutors and representatives of the respective levels of territorial government. However, negotiations with central government do not always go smoothly as a decentralisation of tasks usually leads to spending cuts, meaning that the provincial and local authorities have less financial resources at their disposal compared to the government expenditure for the same functions in the previous years.

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.

The geographical situation of the Netherlands, the historical tradition and the general co-operative culture of the country provide excellent foundations for trans-frontier co-operation. The Netherlands has ratified the European Outline Convention on Transfrontier Co-operation between Territorial Communities or Authorities, and its protocols enabling its local authorities to cooperate with their counterparts in other States.

 Trans-frontier cooperation with neighbouring countries has intensified in recent years between municipalities, provinces and the central government and their counterparts on the other side of the border. An important instrument in this is the agreement on concrete cooperation agendas (‘grenslandagenda’) with Lower Saxony and North Rhine-Westphalia (Germany) as well as Flanders (Belgium). Recurring themes on these cooperation agendas are, in particular, the labour market, education, mobility, security, care and energy.

The Dutch cabinet supports this cooperation by stimulating cross-border initiatives (e.g. by means of so-called Regional Deals), creating the right preconditions and removing border obstacles for creating cross-border governance structures, and using instruments from the EU and Benelux.

Article 11
Legal protection of local selfgovernment - Non 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.

N.B. In their instrument of acceptance (1991), the Netherlands made a declaration that “it shall not consider itself bound by the provisions of Article 11 of the Charter”.

Legal protection in courts, with local autonomy and its principles as basis for a challenge, is practically not an option for municipalities (and provinces) in the Netherlands. Due to the absence of the recognition of the principle of local self-government in the Constitution or in legislation, there is no general constitutional or legal foundation for decentralised authorities to challenge central government decisions claiming that their right to local autonomy has been violated. The Netherlands also lack a Constitutional Court where such a claim might be made (as comparative experience shows). Concrete policy decisions that directly concern a municipality can however been brought to an independent administrative court (but there is no court of appeal). Recently, there has been a court ruling about a decentralisation payment concerning a long-lasting dispute between the municipality of Veenendaal and, amongst others, the Ministry of the Interior and Kingdom Relations.

Despite the general respect for and tradition of local self-government, this lack of legal entrenchment and, by consequence, judicial control entails risks. Local competences of municipalities can be curtailed by adjusting legislation, without there being a legal basis for local and provincial authorities to challenge central government decisions regarding their autonomy. Important decisions are taken in political negotiations and agreements.

The rapporteurs conclude on non-compliance with Article 11, quoting the assessment of the previous report, which is still valid: “126. (…) the Netherlands are not bound by Article 11 of the Charter as it was not ratified. Consequently, this conclusion will not be part of the Congress Recommendation. This being said, the rapporteurs are of the opinion that the current situation of the Dutch legal system would not meet the requirements of Article 11 of the Charter if it would have been ratified.”

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.


to the Council of Europe


of the European Charter of Local Self-Government


The Kingdom of the Netherlands (hereafter “the Netherlands”) signed the European Charter of Local Self-Government (ETS No. 122, hereinafter "the Charter") on 7 January 1988 and ratified it
on 20 March 1991. The Charter entered into force with respect to the Netherlands on 1 July 1991. At the time of ratification, the Netherlands made several “declarations” pertaining to different articles of the Charter, on the ground of Article 12, paragraph 2 of the Charter: namely, the central government declared that it considered only Article 9 of the Charter to have a bearing on the financial resources of local authorities. This means that municipalities and provinces cannot claim additional financial support from the State for employment conditions of their staff under Article 6 para. 2 of the Charter. In addition to the declarations, the Netherlands does not consider itself bound by the provisions of Article 7, paragraph 2; Article 8, paragraph 2; Article 9, paragraph 5; and Article 11 of the Charter. Moreover, and in accordance with Article 13 of the Charter, the Netherlands declared that it intended to confine the scope of the Charter to provinces and municipalities and that the Charter would apply to the Netherlands in Europe (on the ground of Article 16 of the Charter).


25Ratified provision(s)
0Provision(s) with reservation(s)
8 Non ratified articles
23Compliant Provision(s)
5Partially Compliant Articles
2Non-compliant Provision(s)