61 Rethinking local government: Essays on municipal reform - VATT

Local Government in Denmark and the 2007municipal reformHowever, from the perspective of the municipal reform thesecentralizing changes in the tax area were remarkable. As in manyother areas there had been speculations before the reform that thesmall municipalities had problems solving their tasks in a fullyqualified way. In the tax area these speculations had more empiricalbacking than in the other areas, where the reform advocates neverreally succeeded in documenting problems in the small municipalities.Nevertheless, the tax area was the only area where amalgamationswere not the solution to the problems in the small municipalities. Asa rare exception, the central <strong>government</strong> instead chose to transfer thetask out of the municipal system.Apart from the tax area, the functional part of the 2007 municipalreform resulted in a considerable transferral of tasks to the newmunicipalities. Most came from the old counties, most importantlyspecialized social services and health care.Within the area of specialized social services, which includesinstitutions for the physically and mentally handicapped, the 2007reform presented a new solution to a problem that has been presentever since the municipal reform in 1970, namely the tension betweengeneral and special social services. Until 2007 the special services,which are targeted at narrow client groups, were placed with thecounties, while the municipalities took care of general social servicestargeted at broad groups of clients. However, the special and generalservices cannot be run independently of each other, and this problemhas given rise to many coordination problems between the countiesand the municipalities over time. It has also given rise to speculationsof strategic behavior due to complicated co-financing systems. The2007 reform places the responsibility for both special and generalsocial services with the new municipalities. From then on, they areresponsible for referring all handicapped persons to institutionalizedservices. However, the idea was that the new regions should maintainresponsibility for running the most specialized institutions, whichneed a larger population base than even the new large municipalitieshave. Coordination between the regions and the municipalities wouldtake place in a new system of negotiated agreements at the regional56