DYNAMICS

EU COMMITS €40 MILLION TO CONTINUE ITS SUPPORT TO UKRAINE’S

DECENTRALISATION REFORM

THE MONTHLY NEWSLETTER OF THE U-LEAD WITH EUROPE PROGRAMMEISSUE # 14, AUGUST 2019

The EU is financing a second phase of the U-LEAD with Europe Programmeto help reinforce capacities in Ukraine.

Photo: U-LEAD Archives

TABLE OF CONTENTS

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Cover story:

66 hromadas’ first local elections

U-LEAD in the Spotlight

Feature: Accelerating amalgamation

The Interview:Andrii Pinchuk

Decentralisation Dynamics

Success Story: From thorns to ping pong balls

Facts & Figures

Voices of U-LEAD with Europe

Responsible forthe publication:

U-LEAD with EuropeProgrammeBastian Veigel,Kameran Khudur

Editors:Olena MolodtsovaRoland Hackenberg

Production and distribution:U-LEAD Monitoring,Visibility and KnowledgeManagement Team

It’s official. U-LEAD with Europe will carry on ad-vancing multi-level governance in Ukraine beyond 2020. At the 21st EU-Ukraine Summit on 8 July 2019 in Kyiv, Johannes Hahn, EU Commissioner for European Neighbourhood Policy and Enlargement Negotiations, signed a new support package with Ukrainian government counterparts, focusing on decentralisation reform. Commissioner Hahn and Vice Prime Minister Hennadii Zubko agreed on fi-nancing a second phase of the U-LEAD with Europe Programme. The agreement commits a total of €40 million in EU assistance to decentralisation reform implementation and supporting amalgamated hro-madas.

REINFORCING UKRAINE’S CAPACITY

The EU’s continued support to U-LEAD with Europe will help reinforce capacities at local, regional and national level. The programme will continue to sup-port public officials to adapt to their new responsi-bilities and strengthen citizens’ trust and involve-ment in policy making, especially at the local level.

The EU has supported decentralisation through U-LEAD with Europe since 2016 and contributed

to one of the most successful reforms carried out by the Ukrainian government. The decentralisation reform enabled voluntary amalgamation of munici-palities, the transfer of power closer to citizens in all local affairs including budget and improved delivery of services.

TANGIBLE IMPACT ON LIVES

The document was signed in the presence of Ukrainian President Volodymyr Zelenskyy, President of the European Council Donald Tusk and President of the European Commission Jean-Claude Juncker. Commissioner Johannes Hahn said: “Our new sup-port will help Ukraine implement key reforms that will have a tangible impact on people’s lives and that will improve relations with the EU. Ukraine has advanced in a number of important demanding re-forms over the years, and it is important that there will not be any roll-back, in particular on issues such as decentralisation.” Vice Prime Minister Hennadii Zubko thanked European partners for their system-atic support to decentralisation: “Today’s signing testifies to the EU’s appreciation of the reform.”

SIDA PROGRAMME DIRECTOR

KAMERAN KHUDUR

THANK YOU, UKRAINE! THANK YOU, U-LEAD

WITH EUROPE!

U-LEAD IN THE SPOTLIGHT

When I moved to Kyiv, the foundation of the Decentralization Re-form was just one and a half years old. By “foundation” I mean the Concept of the Decentralization Reform, adopted in April 2014 by the Government of Ukraine (GoU). By the end of 2016, the GoU had undertaken many measures to facilitate the implementation of this Reform. However, as the challenges were vast, the very first embryos and fruits of the Reform were not sufficient for those, who wanted to see an acceleration of the Reform, nor were they significant for those, who opposed the Reform. Today, almost three years later from the date of my arrival to Kyiv, the measures undertaken by the GoU and the support provided by the donor community have transformed some of the embryos into visible results, and some of the fruits have become the new normal.

According to the 23 regional prospective plans, approved by the GoU, 9 702 communities are expected to amalgamate and form 1 356 new communities. At the time of writing, 941 amalgamated communities have been formed, and the financial situation of the local self-government have substantially improved, not least be-cause of their enhanced rights and ability to raise fees, taxes and other funds. The improved financial situation combined with the extended room for maneuver allows the local self-governments to gradually improve the living condition of their citizens. This is the new normal, which also U-LEAD with Europe, financed by the taxpayers of the European Union and member states Denmark, Estonia, Germany, Poland and Sweden, is contributing to.

The Programme supports Ukraine to develop and establish a public administration that will be able to meet today´s needs and the challenges of tomorrow, and I am very proud to be part of the Swedish-Estonian-Ukrainian team, whose hard and dedi-cated work creates prerequisites for the public administration of Ukraine to deliver high quality services to the citizens and busi-ness in this country.

The support and solutions provided by us are expected to min-imize the risk of errors and corruption, when handling applica-tions submitted by the citizen to the authorities. This will save time and money for all involved parties, including the Ukrainian taxpayers, and this will certainly facilitate life for the officials to whom the citizens and other “consumers” of the public services turn to. The support and solutions provided by us will also con-tribute to bringing Ukraine closer to the EU, hopefully making it a member of this voluntary union of diverse, but united countries, in the nearest future.

As for me, I will be leaving Ukraine and U-LEAD with Europe, when my accreditation formally ends by 14 October 2019. Thank you all for your kind cooperation, support, contribution and patience.

Do pobachennia!

Kameran

KYIVTALKING ABOUT EDUCATIONOn 19 August, with the support of U-LEAD with Europe, Ukraine’s Ministry of Education and Science held its traditional educational forum, the All-Ukrainian August Conference, attended by 650 teachers, local government representatives, heads of amalgamated hromadas and members of international organisations.

The focus for the new academic year was on the New Ukrainian School. Prime Minister Volodymyr Groysman opened the meeting, saying: “We have invested UAH 7 billion in the New Ukrainian School. We must make sure there are no queues to kindergartens, no shortage of schools or lack of funding. It is important to continue what has been done.” Minister of Education and Science Liliia Hrynevych, World Bank Country Director for Belarus, Moldova and Ukraine Satu Kahkonen and the Head of the Delegation of the European Union to Ukraine Hugues Mingarelli praised the achievements of Ukraine’s education reforms.

TORONTO, CANADADECENTRALISATION DISCUSSED IN CANADAFor three days in early July at the third Ukraine Reform Conference in Toronto, Ontario, a who’s who of political representatives from Ukraine, the European Union and Canada convened to discuss the status of Ukrainian reforms. Following talks between Canadian PM Justin Trudeau and Ukrainian President Volodymyr Zelenskyy, the decentralisation reform took centre stage for a series of panels and talks. Representing the face of decentralisation on the ground, 27 heads of amalgamated hromadas and starostas attended the conference. Not only were they there to show today’s face of the reform, as VPM Hennadii Zubko said. On a study tour to two municipalities, they were also afforded a glimpse of a decentralised future (see feature).

ALL UKRAINEAT LEAST 5.4 MILLION RESIDENTS OF AMALGAMATED HROMADAS WILL RECEIVE ACCESS TO HIGH-QUALITY ADMINISTRATIVE SERVICESAs a result of the work with the first three rounds (out of four) 5.4 million hromadas residents will receive access to high-quality administrative services through the U-LEAD with Europe Programme’s Support to Improved Administrative Service Delivery. So far 339 well-functioning administrative service centres are receiving the Programme’s support for establishment or modernisation.

ALL UKRAINEANOTHER 150 HROMADAS CAN RECEIVE SUPPORT TO ASC FROM U-LEAD WITH EUROPEWithin Round 4 of the Programme’s support to ASC development 179 applications from hromadas in 24 oblasts of Ukraine were received and reviewed by the Programme’s selection committee. Out of those 150 were selected for further analysis of their capacity. If all requirements are met, individual Terms of Reference (ToR) for establishment or modernisation of ASCs will be developed. The ToRs of Round 4 will be submitted to Sida for implementation in December 2019.

KYIVNEW MANUAL ON HOW TO ENGAGE CITIZENS IN DIALOGUE WITH THE LOCAL SELF-GOVERNMENTS THROUGH ASCsThe manual “Informing and engaging citizens. Recommendations for all stages of establishment and operating ASCs” was presented in Kyiv on 25 July 2019. This manual is part of the Support Package, developed by the U-LEAD with Europe Programme’s Support to Improved Administrative Service Delivery. More than 50 representatives of hromadas from all over Ukraine took part in the event. The participants were greeted by Taras Lylyk on behalf of the Ministry of Regional Development, Construction, Housing and Communal Services of Ukraine (MinRegion) and Nataliia Starostenko on behalf of the EU Delegation to Ukraine.After a panel discussion for presentation of the manual an inter-active exercise followed. The representatives of hromadas that were present had the opportunity to receive help to develop individual plans for informing and engaging their residents. Representatives of leading communication agencies, communication experts of other projects supported by the European Union and specialists from public organisations offered their help pro bono in a workshop format.

CANADA AND UKRAINE LOOKING AT THE PAST TO SEE THE FUTURE

VIKTOR TYMOSHCHUKCHIEF EXPERT AT U-LEAD WITH EU-ROPE’S SUPPORT TO IMPROVED ADMIN-ISTRATIVE SERVICE DELIVERY

“In Canada’s Prince Edward County, the experience of preserving and integrating its historical her-

itage is important for accelerating the decen-tralisation processes in Ukraine,” explained Tamara Kirian, starosta of Pyrohy village in Poltava Oblast’s Hlobynska AH, after her visit to Canada early July. She was one of 24 may-ors and three starostas from amalgamated hromadas to embark on a study tour to the third Ukraine Reform Conference in Toronto. The visit marked a unique opportunity both for participants and supporters, with U-LEAD

with Europe cooperating closely with the Feder-ation of Canadian Municipalities (FCM) through

its project Partnership for Local Economic De-velopment and Democratic Governance (PLEDDG),

with USAID’s programme for Decentralization Offer-ing Better Results and Efficiency (DOBRE) and the Swiss-

Ukrainian decentralization support project DESPRO, funded by the Swiss Confederation. DOBRE supported the visit for seven of the 24 mayors of hromadas. And, as Kirian’s comment implies, for her and the others it was more than just a field trip. It was a person-al epiphany, amounting to a journey to the future of the Ukrainian hromada.

STUDYING GOOD PRACTICES

After attending the conference itself, she and her colleagues were given the opportunity to see Canada’s decentralisation in action over the course of two days of visits to councils, initia-tives, commissions and municipalities in the province of On-tario. Twenty years into its own amalgamation, Canada offers ample chances for honest and open discussions, field trips, site visits and case studies on lessons learned for the visitors from Ukraine. The elected heads of Ukrainian amalgamated hromadas could see for themselves good practices for effec-

tive post-amalgamation governance, citizens’ engagement, local economic development and service provision.

A QUESTION OF IDENTITY

One of the municipalities selected was Prince Edward County in the south of the province. The current council structure of this municipality was formed in 1997 after a merger of the original county and ten former towns, villages and townships. County May-or Steve Ferguson welcomed participants to a series of talks by various members of the coun-ty council. Starting with the question of identi-ty in the reality of amalgamation, the day covered a broad spectrum of issues and perspectives. From amalgamating museums to the face of local economic development to keeping the momentum going to surviving Can-ada’s winters and how amalgamation affects wastewater ser-vices, the Ukrainian delegates were encouraged to participate and learn from local representatives about all walks of life, be it local economic development, infrastructure management, tour-ism, waste management, history or culture.

SEEING A FUTURE IN THE PAST

The result? For Tamara, looking to the past and the present sparked a new sense of inspiration for the work in her own vil-lage. Modern development in Prince Edward County is infused with preserving and enhancing its cultural heritage, and the council has its own manager who takes care of historical sites. “As I saw,” she concludes, “the study of the past helps identi-fy our hromada’s uniqueness, its competitive advantages, end Soviet stereotypes and forms a high level of responsibility for decision-making.”

FIVE STRATEGIC AREAS OF ADMINISTRATIVE SERVICE REFORM

MUST BE EQUALLY BALANCED

Today, the key challenge is to continue the implementation of decentralization and administrative service reform. We have elected a new President, a new Parliament; there will be changes in the government as well, which could mean that many re-forms could be discontinued, rethought or altogether declined. Administrative ser-vice reform has been quite successful, and it should continue in designated areas. There are five of them, and they all must be addressed simultaneously. The first area is deregulation and reduction of the number of administrative services. “The less the better” is the principle that should work here. It is important to simplify the service delivery procedures to make sure that everything is easier for consumers, as well as for service providers. This is also the key condition for the second area, digitalization/electronization. Today, this is an ultramodern trend, but you have to understand that it is not a panacea. The third area is the transfer of powers to local bodies of self-government, so that communities become responsible for quality of services and able to integrate them, in particular, into administrative service centers (ASCs). Creation of integrated offices, i.e. ASCs is the quintessence of decentral-ization in terms of services and a separate area of successful reform. The fifth area is regulation of administrative service fees. Control over excessive fees must be tightened, and on the other hand, reasonable fees must be charged for some other hitherto free services to ensure at least partial recovery of service costs. These five strategic areas of reform must be equally balanced, so that there will be no tilting on a certain side.

Yes, 440 of the existing ASCs are Centers under district state administrations, and according to specialists, only 5-10% of them are conformant in terms of infra-structure and scope of services. However, they find it hard to stay competitive even in terms of the scope of services, because they lack many powers which bodies of local self-government enjoy, such as, for example, that very registration of residence place.

There are enough challenges. Let’s start with the most important thing: the exis-tence of political will in the head [of community] to establish a conformant ASC. There are proactive heads who address this problem and solve it, and there are those who do not think that this problem is worth attention. You can tell the differ-ence right away, judging by how comfortably it is for citizens to handle their affairs with public authorities. We had situations when an application for participation in the Program was submitted by a community, yet the community head still wouldn’t get properly involved in it. This is one of the biggest challenges, for that’s where unresolved problems, both infrastructural (when there are no facilities to provide services to the public) and institutional, begin.The second problem is the situation when even existing powers of local self-gov-ernment are not integrated in a newly-established ASC, such as, for example, civil registration, or services of the so-called “local notariat”, or land matters which for years have already been handled by local councils.

Another problem typical for the majority of our hromadas and ASCs is personnel shortages. We lack skilled staff, people with the necessary education who can work in the administrative service sector when they have to work with various registers and with legislation. These are subjective factors: the factor of first person, the fac-tor of “experienced” employees and integration of services, and generally speaking, personnel shortage; these are, in fact, the most important factors for the establish-ment of a successful ASC.

Viktor, your experience in the administrative service sector is already exceeding 20 years, and you are one of the best specialists in Ukraine who saw the inception of key initiatives in this area. What challenges do you have to face today?

There are approximately 800 ASCs in Ukraine today, but only a third of them are conformant, i.e. providing the most popular services in comfortable conditions. Why aren’t the rest of them? Is the only reason the fact that they were opened before 2014-2015?

You and your team are working on establishing some 600 confor-mant ASCs. What are the biggest challenges befalling the commu-nities participating in the Program? What unites them?

Questions prepared by: U-LEAD with Europe’s Support to Improved Administrative Service Delivery Communications Team

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THE U-LEAD WITH EUROPE INTERVIEW

SUCCESS STORY

TREMBITA SYSTEM HELPS TO CONTROL THE VALIDITY OF MEDICINE

LICENCES IN RETAIL SALES

DECENTRALISATIONDYNAMICS

The first two government institutions - the State Service of Ukraine on Medicines and Drugs Control, and the National Health Service of Ukraine are exchanging information via the data exchange solution Trembita system to control the validity of medicine licences in retail sales. „Trembita has made our work more efficient. Trembita will improve the quality of the services provided by the State Service of Ukraine on Medicines and Drugs Control, it will also ensure the transparency of our work and become a powerful tool for prevention of corrupt manifestations,“ said Roman Isaenko, Head of State Service of Ukraine on Medicines and Drugs Control.By autumn, the Ministry of Internal Affairs will be ready to share and use electronic data about passports, and about wanted persons. This data will be available also for the State Fiscal Service, where officials can check the status of persons while providing administrative services. The improved status control of people will help to reduce identity frauds.According to the team leader of the EGOV4UKRAINE project, Mari Pedak, the first beneficiaries of the Trembita system are the government agencies who have the political will and passion to make their services more efficient and transparent. „State Service of Ukraine on Medicines and Drugs Control and National Health Service of Ukraine are an excellent example of how to use Trembita to make their daily work more efficient,” said Pedak.The secure data exchange via Trembita does not happen with one click. First of all government institutions must conduct a business analysis and determine which information should be exchanged between institutions. Secondly, legal obstacles that my prevent the exchange of electronic data must be identified and eliminated. Thirdly, an agreement on information exchange must be signed between parties. Only when these three steps are made, the development of the technical matters. A team of up to 20 people are involved in making the data exchange possible. The team includes officials from the State Agency for e-Governance of Ukraine and the State Enterprise «State Centre of Information Resources of Ukraine», IT experts and officials from national authorities, IT experts from EGOV4UKRAINE project and IT experts from projects realised by other donors.„The Trembita System is an enabler for better administrative services, but first there needs to be political will and regulations. The secure data exchange needs 20 % effort from IT experts and 80 % effort from officials to change the regulations and renew ad-ministrative services,“ said Mari Pedak. This year, the project aims to provide assistance for connecting 55 government institutions to the Trembita system for making data run, not people. To date, the following 16 government institutions have expressed their interest in connecting their registries and databases to Trembita and create services for officials and citizens: 1. Ministry of Finance of Ukraine2. State Service of Ukraine on Medicines and Drugs Control3. Department of registration of Kharkiv City Council4. Pension Fund of Ukraine 5. National Health Service of Ukraine6. State Space Agency of Ukraine7. Ministry of Internal Affairs of Ukraine8. State Financial Monitoring Service of Ukraine9. State Fiscal Service of Ukraine10. Ministry of Social Policy of Ukraine11. State Agency of Fisheries of Ukraine12. State Service of Ukraine for Food Safety and Consumer Protection13. State Migration Service of Ukraine14. Ministry of Justice of Ukraine15. State Emergency Service of Ukraine16. Ministry of Foreign Affairs of UkrainePreliminary agreements (Memorandum of Cooperation) to initiate the work to enable data exchange via the Trembita System are signed with the State Fiscal Service, the Ministry of Internal Affairs, the Ministry of Foreign Affairs and the MinRegion. The agreements are waiting to be signed with the Ministry of Justice, the Ministry of Finance and the Ministry of Education.The Trembita System is developed and implemented by the e-Governance Acade-my, Cybernetica Ltd, and SoftXpansion Ltd with the support of the EGOV4UKRAINE project by U-LEAD with Europe Programme. The Trembita System is based on an updated version of the Estonian data exchange platform X-road.

MORE THAN 100 AHS MAY HOLD THEIR FIRST LOCAL ELECTIONS THIS YEAR. DECISION IS UP TO CEC – VYACHESLAV NEHODABy December 2019, the first local elections should take place in the amalgamated hromadas that were formed this year. This will allow the AHs to transfer to direct interbudgetary relations from January 2020, said Mr. Vyacheslav Nehoda, First Deputy Minister of Regional Development, Construction, Housing and Communal Services (Min-Region) in the interview. According to him, 60 amalgamated hrom-adas are awaiting the decision of the Central Election Commission (CEC) to appoint the first local elections on their territory. Relevant appeals from oblast state administrations continue to be sent to the CEC every week. Vyacheslav Nehoda expressed his hope that the CEC will soon consider the election request and make its decision.

AMALGAMATED HROMADAS HAVE ALREADY ALLOCATED ALMOST 99% OF THE INFRASTRUCTURE SUBVENTIONS FOR THEIR PROJECTSThe MinRegion’s Commission for allocation of Infrastructure Sub-ventions has approved 2 713 projects in amalgamated hromadas to be implemented in 2019, with a total value of UAH 2 076 billion. UAH 23.5 million (1.1%) remain unallocated. Most oblasts have fully or almost by 100 % allocated the Infrastructural subventions that were reserved as their share. The largest shares of unallocated means are for Donetsk and Kyiv Oblasts (8.3% and 6.1% respectively). Other oblasts that have not allocated all the subventions are Odesa, Sumy and Kherson Oblasts (approximately 3 % remain unallocated).

The amalgamated hromadas have fully or almost by 100 % allocated their share of the subvention among their projects. UAH 1.16 billion (55.6%) of this year’s subvention has already been transferred to AH budgets.

EXPERTS ANALYSED THE PERFORMANCE OF LOCAL BUDGETS OVER THE FIRST HALF OF 2019

During January-June 2019, revenues to the general fund of local budgets of Ukraine (excluding interbudgetary transfers) amounted to UAH 128.9 billion, which is 49.8 % of the approved annual plan, taking all changes to budgets into account. Compared to the same period in 2018, the revenue growth is UAH 21.1 billion or +19.5 %.

It should be noted that the growth rates of revenues in the report-ing period of the current year has slightly decreased compared to the previous year – as a result of the first half of 2018, the revenue growth rate was 23.3%, compared to 2017. More detailed informa-tion here.

EGOV4UKRAINE PROMOTES TREMBITA AND VULYK AMONG MUNICIPALITY LEADERS OF UKRAINE

The Ukrainian government has made impressive achieve-ments in the implementation of the educational reform over the past year. Decentralisation has been able to completely overhaul the governance mechanism in small municipali-ties and we have been supporting the decentralisation re-form through the U-LEAD Programme.

Hugues MingarelliHead of the Delegation of the European Union to

Ukraine, Kyiv

Thanks to the opportunity to participate in the Programme, a modern and comfortable administrative service centre has appeared in our hromada. We are extremely pleased that our residents now will be able to take an active part in the hromada’s development and receive quality administra-tive services. We are grateful to our international partners and the Programme’s experts for their contribution to the development of our region.

Natalia KatryukHead of the Mamayivska AH

For this Manual, we have focused on the whole expe-rience gained during the establishment of 26 ASCs in the Inception Phase, and also invited experienced com-municators to wrap up the experience and in a compre-hensive format present efficient tools and instructions for hromadas that are want to engage and communicate with their residents in the opening of an ASC, a new in-stitution or infrastructure facilities. These practical in-structions are now ready for use.

Tamara BereshCoordinator of institutional support of the

U-LEAD with Europe Programme’s Support to Improved Administrative Service Delivery

U-LEAD VOICES

This publication has been produced with the assistance of the European Union and its member states Denmark, Estonia, Germany, Poland and Sweden. The contents of this publication are the sole responsibility of its authors and can in no way be taken to reflect the views of the European Union and its

member states Denmark, Estonia, Germany, Poland and Sweden.

© U-LEAD with Europe, 2019

Websites: u-lead.org.ua, decentralisation.gov.ua https://tsnap.ulead.org.ua/

Facebook: facebook.com/ULEADwithEuropeAddress: House of Decentralisation,

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Kyiv 01001, Ukraine Phone: (+380 44) 581 27 99

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