The Finnish Parliament is due to adopt the government's proposal for the so-called Framework Act. This law outlines the government's approach in relation to the merging of municipalities in order to ensure, in future, effective and efficient public service provision. Questions over the location of responsibility and the allocation of costs between Central Government and the municipalities, historically speaking talismanic issues in Finnish politics, are also dealt with.
It is something of a tradition in Finland that coalition-governments are made up of three parties - two larger and one smaller. Currently, one of the larger governing parties is the Centre Party, which prioritises the regional model (see below). The Social Democratic Party is the other large governing party. The Social Democrats have however opted for the 'basic municipalities' model. The small 'third' party, the Swedish People's Party, with its main support base in rural areas, lies somewhere in between the other two.
The actual proposal for the Framework Act can thus be seen as something of a watered-down compromise. Actually, the proposal does not include any major changes, nor does it oblige the municipalities to implement any legislative changes in the structure of their welfare service provision, though it is intended to encourage such development on a voluntary bases.
The new law does, however, require that plans be made by sixteen regional centres and their neighbours covering issues of land use, housing policy, transport and service provision. All municipalities are to formulate plans on how they intend to put in place a more effective structure for local level government by 1st of September 2007. The restructuring of local government will be achieved, it is assumed, by the merging of municipalities into larger entities.
The reform proposal has also been characterised as a mix of voluntary, semi-voluntary and forced collaboration, reflecting the political sensitivities and compromises that lie behind it.
The metropolitan region and its needs is another issue in the debate on the future of Finland's municipalities. The Framework Act proposes that Espoo, Helsinki, Kauniainen and Vantaa (which together make up the Greater Helsinki area) should improve cooperation and coordination in the areas of land use, housing policy and transport.
The municipalities are a major source of employment, and thus constitute an important interest group within their labour market. Currently the Finnish municipalities employ 422 000 persons, amounting to approximately 20 percent of total employment. Though their share of total employment has been decreasing, it remains important.
The aim of regional development policy in Finland has always been associated with notions of equality in the provision of welfare services. The present debate on the restructuring of the municipal and service structure ("PARAS"-project) has reflected a change in this traditional view, with a new consensus forming around the notion that the public sector cannot be the sole provider of welfare. If nothing else, this fact alone will ensure that the new law has a significant impact when it is put into practise.
By Kaisa Lähteenmäki-Smith, previous Nordregio, and Petri Kahila