Sound financial management is one of the 12 Principles of good democratic governance. It promotes the municipality's financial autonomy, the ongoing provision of public services, and the local government's accountability to its constituents. This topic is particularly significant in Finland, especially in the context of the recent comprehensive reform that has transferred the responsibilities for the provision of health, social and rescue services to the newly established well-being counties.
Thirteen Finnish municipalities and the central authorities have committed to implement the Local Finance Benchmarking Tool (LFB); a practical analytical tool developed by the Council of Europe’s Centre of Expertise. The tool is designed to help local authorities better identify their local finance framework, improve their practices and regulations, and promote exchange among authorities.
In the upcoming months, under the guidance of the Council of Europe and Finnish experts, the participants will self-assess their system of local finance through a structured list of statements based on two relevant recommendations of the Council of Europe’s Committee of Ministers, respectively on financial and budgetary management at local and regional levels, and on the financial resources of local and regional authorities.
The information collected and analysed during the implementation of the LFB tools will feed into the policy advice on fiscal decentralisation and fiscal autonomy of local authorities, and the fiscal impact of the reform that will follow to support the government in this process.
The kick-off workshop was organised in cooperation with the Regional Council of Central Finland in Jyväskylä, in the framework and the CoE-EU joint project “Delivering good governance and balanced local economy in Finland”, co-funded by the European Union via the Technical Support Instrument 2022 and implemented by the Council of Europe’s Centre of Expertise for Good Governance, in cooperation with the European Commission.