GOLD Report I - UCLG

153zing and monitoring tasks. The impact ofNPM was thus rather limited, though it didlater lead to a diversification of “suppliers.”In countries like France and Spain, with along tradition of devolving the operation oflocal public services to the private sector,the NPM principles did not seem of muchrelevance, although new tools to facilitaterecourse to the private sector have morerecently been created. But the focus onperformance as the driving force has gaineda lot of ground, both through stateinterventions (for example, reforms inFrance of local accounts models) andthrough initiatives taken by the local authoritiesthemselves.European Community law has a decisiveinfluence on how the management of publicservices evolves and develops. This isbecause all services that can be classifiedas services of general economic interest–as defined under article 86.2 of the Treatyon the European Community– are subjectto the rules on competition, unless theserules impede the realization of their missionin conditions compatible with the viability ofthe enterprise. According to the Court ofJustice, if a local authority decides to devolvethe operation of a public service to a privatecompany, that local authority must usea competitive [tendering] procedure. Thisapplies even if the authority itself has createda local enterprise specifically to deliverthe service in question, unless it can establishthat it exercises the same control overthis enterprise as it does over any of itsadministrative services (known as the “inhouse”exception). For the Court, it sufficesthat the company has external shareholders,even if only minority ones, to invalidatethis latter condition. The result is thatintegration through the market, as interpretedby the Court of Justice, means thatthe freedom of local authorities to choosehow to manage the public services they areresponsible for is restricted. This applieseven though this freedom has long beenconsidered an important part of local selfgovernmentin many countries, includingFrance, Germany and Spain. Of course,other countries have sought to restrict thefreedom of local authorities in this respect,in the name of opening up the market (Italyand the United Kingdom, in particular). Inthe same way, the new regulation1370/2007 (23rd October 2007) concerningpublic rail and road transport puts anend to the exception that preserves urbanand regional public transport from opencompetition. However, competent localauthorities still have the possibility to providepublic transport services directly orthrough a separate entity over which theyexercise a similar control as for their ownservices and to which they may assign theservice directly. The urban transportsystems of numerous large European citieswill necessarily be reviewed when the newregulation comes into force (3 December2009). The free choice of local authoritiesregarding the operational system will thereforebe limited. By contrast, most Servicesof General Interest (SGI) should not beaffected by the application of the so-called"Services" directive of 12 December 2006.IV. Local democracyThe main trends we can identify can bepresented by distinguishing among localpolitical systems, supervisory structures,the impact of decentralization on nationalpolicies, and the role of the associations oflocal councilors and mayors, and of localgovernments.IV.1. The local political systemThe election of municipal councils, ormore generally of community-level localgovernments, by direct, free and secretuniversal vote is today a reality in all thecountries of the Council of Europe. A lookback over even recent history is enoughto show what important gains have beenmade. As far as intermediate-level localgovernments are concerned, the situationis a little more complex: In some cases,indirect elections seem to be a betteroption for linking intermediate-level tasksThe election ofmunicipal councilsor localgovernments, bydirect, free andsecret universalvote is todaya reality in all thecountries of theCouncil of Europe