61 Rethinking local government: Essays on municipal reform - VATT

Antti Moisiocooperation. Another surprise was that the new municipalitiesended up being much larger than expected, since after the reformthe average municipal population size was above 50,000. The wholereform process from the appointment of the expert committee untilthe start-up of the new municipalities took four and a half years.According to Blom-Hansen, the 2007 reform was thoroughlyplanned, with special attention paid to pre-merger spending and debt.Several limits to municipal decision-making were set, with a promiseto lift the restrictions from 2007. The <strong>government</strong> kept its promiseand abandoned the restrictions, but the rapid increase in municipalspending and deviations from the nationally agreed general spendingand taxation targets forced central <strong>government</strong> to restore theregulations already in 2008. At present, central <strong>government</strong> imposesrules on municipalities including sanctions such as grant cuts tomunicipalities that fail to follow their expenditure growth and tax ratelimitations. Both individual and collective sanction elements are used.As a result, the municipalities no longer deviate from the nationallyagreed targets and even some expenditure cuts have been seen inthe municipalities since 2009. This has not come about without cost,however. Blom-Hansen argues that the present situation constitutes aremarkable break with the Danish tradition of <strong>local</strong> autonomy. It willbe seen whether the regulation has come to stay or whether the ruleswill be gradually lifted.The 2007 reform stripped the regions of many of their previous tasks.Also, the number of regions was reduced from 14 to five. The maintask of the regions before the reform, health care, was maintainedas a regional task. Some health care functions were neverthelesstransferred to the municipalities, and the municipalities were alsomade financially co-responsible for hospital services. In addition,specialised social services and employment services were transferredto the municipalities. As a result, the municipalities have becomestronger players in the public sector. It has also been argued thatdemocratic decision-making has strengthened as a result of the newdivision of tasks. However, according to Blom-Hansen, the latest7