The application of Article 81 of the Local Councils Act : a remedial intervention or an infringement of the local councils’ fiscal autonomy?

Abstract

Local councils are the only form of decentralized governance in Malta created by an Act of Parliament (Local Councils Act, Chapter 363, Laws of Malta) in 1993. The constitutional provisions in 2001 consolidated local government by means of Article 115A (Chapter XA) of the Constitution of Malta. Decentralization is considered as an effective system of local government in solving local problems and responding to local needs according to the principle of subsidiarity. However, there is an increasing call for good governance. Thus, although they enjoy a degree of autonomy from central government, the legal framework allows central government intervention in the event of omission of their responsibilities as stipulated in Article 81 of the Local Councils Act.

The primary objective of this research was to analyse whether central government intervention is an effective remedial intervention or an infringement of the financial autonomy of local councils. This paper further explored the effects of intervention on the two sub-objectives: the principles of subsidiarity and proportionality. By means of data triangulation, the author examined multiple data sources to have a broader understanding of the research question and tested the rationality across the divergence of information from different stakeholders. Triangulation of data sources deepened the author’s understanding of central government intervention by studying it from different perspectives, eliminating any influence or bias on the results.

Factors such as lack of delineation of roles and ambiguity in the interpretation of Article 81 have been identified as the main drivers, which culminate tensions and conflicts in decision-making between the two spheres of government. The lack of commitment of council staff and the necessary support and insufficient funds from central government seem to be attributing to inadequate performance at local government. Other elements including lack of administrative and financial capacity in monitoring local council’s performance are hindering the proper assessment of local authorities. These shortcomings may ultimately lead to central government intervention.

Since the lack of communication and co-ordination between the two tiers of government in decisions of intervention have been identified as contributing to the infringement of local councils’ autonomy there is a strong need of co-operation and collaboration between them. By implementing robust auditing systems, having a professional group of experts, an efficient administration and strong leadership qualities, can lead to significant improvements diminishing the use of intervention. A horizontal form of decentralization, promoting co-operation, allowing shared exercise of resources and providing incentives encourage good governance practices rather than holding vertical pressure such as intervention in local government.