How will the year 2024 be remembered by the participants of the reform of local self-government and territorial organization of power? What legislative changes were adopted during the year, and which ones will have to wait? This material contains only the facts and events that, in our opinion, had the greatest impact on the activities and development of local self-government in Ukraine.

Laws and draft laws in 2024

The year 2024 began for decentralization with the entry into force in January of the Law of Ukraine “On the Procedure for Resolving Certain Issues of the Administrative and Territorial Structure of Ukraine” No. 3285, adopted in 2023. This law finally removed the Soviet regulation of administrative structure issues that had been in effect since 1981, established clear procedures for classifying settlements as cities, towns, and villages, naming and renaming settlements, simplified the procedure for establishing the boundaries of settlements, and so on. The Law did not provide for an automatic change in the status of settlements. The only thing that happened automatically was that all urban-type settlements (there were 881 of them in Ukraine) became villages, and cities no longer have the status of district, regional or republican significance.

In total, in 2024, the Verkhovna Rada of Ukraine adopted 10 important bills to continue decentralization, develop local self-government and ensure its resilience in the face of war. Seven of them became laws:

1. On February 22, Law No. 3590 on ensuring transparency of local self-government was adopted. On August 15, certain provisions of this law came into force. From now on, each local council is obliged to record, store and publish video recordings of plenary sessions of the council, as well as meetings of permanent commissions.
2. April 24 – European integration Law No. 3668 on international cooperation of local self-government. This law came into force on June 27, and allows communities and regions to work with European structural funds in a simplified and broader format and to attract their funds.
3. June 17 – Law No. 3870 on improving the legal regulation of the institute of starostas and its activities under martial law. The law came into force on August 10, and it significantly simplified the procedures for appointing starostas and creating starosta districts.
4. June 20 – Law No. 3841 “On Public Consultations”. On October 17, the President signed the law, but it will come into force only 12 months after the termination or lifting of martial law in Ukraine. The law ensures the right to participate in the management of public affairs, defines the rules for public consultations, their terms, forms and principles.
5. August 21 – Law No. 3914 on the list of recipients of humanitarian aid, which entered into force on December 18. Among other things, the law allows community utilities to receive and use humanitarian aid.
6. September 18 – Law No. 3979 on the restoration of medium-term budget planning at the local level. The law came into force on September 21.
7. On October 10, the Parliament adopted Law No. 4017 on amendments to certain legislative acts in connection with the adoption of the Law of Ukraine “On Administrative Procedure”. The document came into force on November 15. This means that from now on, the entire set of relations between executive authorities, local governments, their officials and other entities authorized to exercise administrative functions (administrative bodies), with individuals and legal entities is regulated in Ukraine.

Three more bills passed this year are awaiting the President’s signature:

1. The law that returns to local governments the right to order repairs or comprehensive restoration of social and industrial infrastructure, as well as residential buildings (draft law No. 10202) – adopted on February 23, and will be signed on February 27, 2024.
2. The Law on Democracy at the Local Government Level (draft law No. 7283), which stipulates that the procedure for initiating, conducting and applying local democracy mechanisms is regulated by local governments in community charters or individual decisions of local councils – adopted on May 9, to be signed on May 17, 2024.
3. The law on expanding the powers of local governments during martial law (draft law No. 9559-d), which allows local governments to provide financial and material support to the security and defense sector – adopted on June 18, to be signed on June 25, 2024.

This year, the parliament was also actively engaged in decommunization and de-Sovietization, adopting three important resolutions:

1. September 19 – Resolution No. 12043 on renaming settlements and districts. As part of this resolution, Ukraine decided to slightly “correct” its geographical coordinates by renaming 10 cities, 4 districts, 262 villages, and 56 settlements.
2. On October 9, two more “southern” perturbations took place: the city of Yuzhnoukrainsk in Mykolaiv region became Pivdenoukrainsk (Resolution No. 11236), and the city of Yuzhne in Odesa region became Pivdennyi (Resolution No. 12092). Now, if you go to the south, you won’t get lost!

It is also worth mentioning the draft laws that the Verkhovna Rada adopted as a basis, as they will receive special attention next year:

1. No. 9478 on improving the procedure for correlation between the ranks of civil servants and the ranks of local government officials, military ranks, diplomatic ranks and other special ranks, and on the inclusion of time spent in certain positions in military administrations in the civil service record.
2. No. 11412 on the development of cooperation between territorial communities, which expands opportunities for community cooperation and simplifies procedures for cooperation under martial law or a state of emergency.
3. No. 10284, which will allow additional payments to employees of local governments, regional and district administrations from funds raised through international cooperation projects.
4. No. 11345, which, in particular, defines the powers of local governments to establish security centers.

Two previously adopted draft laws, which we have been following for several years, were not considered in the second reading in 2024:

1. No. 4298 of 30.10.2020 on reforming the territorial organization of executive power in Ukraine. It was adopted as a basis on March 4, 2021. This is one of the main priorities of the Parliament for 2025 and a requirement of European partners. Its consideration is expected next spring.
2. No. 6319 of 18.11.2021 on improving the procedure for organizing, operating, and terminating a body of self-organization of the population. Adopted in the first reading on May 2, 2023. The document has not lost its relevance, so there is a possibility of its final adoption next year.

We would also like to mention a number of registered draft laws that also have a chance to be included in the parliament’s agenda next year:

• No. 12283 of 03.12.2024 on the extension of the validity of territory planning documents, which should postpone the need to create comprehensive plans for the spatial development of each community.
• No. 11481 of August 15, 2024 on the preservation of valuable historical buildings in settlements.
• No. 11054 of 01.03.2024 on ensuring decent remuneration conditions for local government officials.
• No. 10395 of 08.01.2024, which should allow the transfer of property of higher education institutions to the communal ownership of communities.

And finally, I would like to mention the long-suffering draft law No. 4380 of 11/16/2020 on administrative fees, which has not progressed beyond consideration in the parliamentary committee for 4 years, despite its relevance, necessity for communities, and the comprehensive support expressed at its numerous discussions. Perhaps it simply decided to take a break and rest in the archives until better times.

Government activities

In March 2024, the Cabinet of Ministers of Ukraine approved an action plan for reforming local government and territorial organization of power for 2024-2027. This plan was presented by the then Ministry of Community Development, Territories and Infrastructure in November 2023, and it largely repeats the previous plan for continuing decentralization. This is not surprising, as most of the planned activities had to be postponed due to the war, but the steps outlined earlier remain relevant.

On March 5, 2024, the Cabinet of Ministers of Ukraine adopted a resolution on the creation of three basic registers: administrative-territorial units (EDRATO), addresses (EDRA), and buildings and structures (RBS). These registers are filled in by communities, as they are the ones with reliable address information.

It was also decided to involve communities in filling in the unified geographic information system for regional development (GIS), the test version of which was presented on March 13. This system will allow modeling community development scenarios and data-driven planning, as well as assessing the effectiveness of the State Regional Development Fund’s spending and compiling an investment index for individual communities and regions.

The development of basic GIS functions was supposed to be completed in May and presented in June 2024, but these and other plans of the Ministry responsible for local governments had to be adjusted because in early May 2024, the Ministry was left without leadership.

On April 30, the Government adopted the Resolution “On Amendments to the Resolution of the Cabinet of Ministers of Ukraine of March 9, 2006, No. 268 ‘On Streamlining the Structure and Conditions of Remuneration of Employees of the Staff of Executive Authorities, Prosecutor’s Offices, Courts and Other Bodies’. By this resolution, the Government increased the salaries of local government officials.

On August 13, the Government approved amendments to the State Strategy for Regional Development for 2021-2027, making an important step towards bringing Ukraine’s regional policy closer to one of the main policies of the European Union, the cohesion policy.

On September 5, the Ministry received a new head – the Verkhovna Rada of Ukraine voted to appoint Oleksiy Kuleba as Vice Prime Minister for the Restoration of Ukraine – Minister of Development of Communities and Territories of Ukraine. Although the word “infrastructure” has disappeared from the name of the Ministry, its functions remain unchanged.

On October 4, Oleksiy Ryabykin was appointed Deputy Minister of Communities and Territories Development of Ukraine, who is in charge of local self-government and regional development.

It is important to mention several government decisions in sectors important to local self-government.

On January 23, the Cabinet of Ministers of Ukraine adopted the Procedure for Organizing the Activities and Ensuring the Functioning of Resilience Centers, spaces where specialists will provide psychosocial assistance to community residents.

On July 25, the Government approves the State Standard for specialized secondary education. The standard will be applied in academic lyceums (grades 10-12), vocational (vocational-technical), as well as professional higher and specialized education institutions (for obtaining a complete general secondary education). This standard provides for the possibility of forming an individual educational trajectory: studying in an academic or professional field.

In October, the Ministry of Education and Science of Ukraine held a public discussion of a draft law aimed at regulating the process of creating a network of specialized secondary education institutions. The draft law proposes to establish new requirements for the establishment and operation of academic lyceums; simplify the procedure for reorganizing, changing the type or liquidating a general secondary education institution; ensure the formation of a network of lyceums; and generally improve the legal framework by amending and clarifying important provisions of the Laws of Ukraine “On Education”, “On Complete General Secondary Education” and “On Professional Higher Education”.

In general, the high school reform was one of the most discussed topics in 2024, as the piloting of the reform will begin in communities on September 1, 2025, and all 10th graders will start studying at a specialized school in 2027. That is why a number of public discussions involving community representatives were held in the regions in 2024 with the support of the Swiss-Ukrainian DECIDE.

Local budgets

Final data on the implementation of local budgets for 2024 are not yet available, but expert data for 9 months indicate that local budgets, although they demonstrated resilience, faced challenges that require a strategic response to ensure financial balance.

The withdrawal of the “military” personal income tax reduced the share of local revenues in the consolidated budget from 22.6%, as in 2017, to 15.8%. Revenues from other taxes, although they remained steadily growing, could not compensate for these losses. In addition, revenue disparities by region increased, which, according to experts, indicates the need for further adjustment of mechanisms for horizontal equalization of tax capacity.

As for the State Budget for 2025, as always, there were difficult discussions this year around resources for local self-government. In the rest, on November 19, 2024, the Verkhovna Rada of Ukraine adopted, and on November 28, the President signed, the Law “On the State Budget of Ukraine for 2025”. The document includes a number of important norms aimed at supporting local governments: 64% of personal income tax in 2025 will remain local (except for the “military” one); front-line communities will not transfer the reverse; an additional subsidy will be preserved for the affected territories; the State Regional Development Fund will be restored, albeit in a small amount – UAH 1 billion.

In general, as experts note, the State Budget of Ukraine for 2025 provides for an increase in financial resources for local budgets.

Thus, in 2025, the resource of local budgets will increase, compared to 2024, by 15% – from UAH 285.1 billion to UAH 327.7 billion.

The main increase will be provided by personal income tax revenues, which will increase from UAH 235.4 billion to UAH 280.9 billion, as well as an additional subsidy for local budgets, which will increase to UAH 36.5 billion, in particular to support the deoccupied territories.

The basic subsidy will increase to UAH 25.5 billion, and the introduction of a reverse subsidy will allow for a more efficient allocation of resources.

Communication of the reform

Since the beginning of 2024, the initiative “Decentralization in Connection” has been launched – a series of communication events for subjects of local self-government reform and territorial organization of power, designed to conduct a joint dialogue and find solutions to the complex issues facing communities. “Decentralization in Connection” is a joint initiative of the USAID Program (DOBRE), the Ukrainian Crisis Media Center, the All-Ukrainian Association of United Territorial Communities and the portal “Decentralization”. During the year, 10 discussions of the most relevant topics for communities took place.

Also this year, sociologists once again measured the level of support for the reform among the population of Ukraine – on November 18, the results of the eighth wave of the all-Ukrainian sociological study “Multi-level governance in Ukraine in the context of a large-scale Russian invasion” were presented in Kyiv, which was conducted by the Kyiv International Institute of Sociology at the request of the Council of Europe within the framework of the Program “Strengthening good democratic governance and resilience in Ukraine” in cooperation with the Committee of the Verkhovna Rada of Ukraine on the organization of state power, local self-government, regional development and urban planning.

The results of the study show that the reform of local self-government and territorial organization of power (decentralization) has a consistently high level of support among the population of Ukraine. In 2024, 77% of respondents (in 2022 – 76.5%) believe that the reform should be continued and more powers and resources should be transferred to territorial communities. At the same time, the majority of respondents are convinced of the need to hold elected officials accountable for violations of the law and rules of ethical conduct. More important figures and the entire study are HERE.

What to expect next year

In 2025, in addition to the draft laws that are already under consideration in the Verkhovna Rada and that were discussed above, government officials and people’s deputies named the following priorities for the next year:

• updating the Concept of Reforming Local Self-Government and Territorial Organization of Power, taking into account the challenges of war and the tasks of European integration;
• introducing supervision over the legality of decisions of local self-government bodies;
• delimiting the powers of state authorities and local self-government bodies;
• creating a clear architecture of planning documentation based on the State Strategy for Regional Development;
• regulating the status of employees of military administrations of settlements;
• developing a mechanism for restoring local self-government for deoccupied communities;
• changing the mechanism for calculating personal income tax (an expert study of this issue is available at the link);
• providing state support to communities that want to work with international cooperation programs – ensuring their access to cheap money;
• preserving the capacity of local councils in the event of the mobilization of deputies or their absence in the country;
• creating a methodology for community capacity;
• expanding the powers of communities to administer local taxes and fees;
• creating the basis for future correction of the administrative-territorial structure.

We will continue to monitor how the above-mentioned decisions will be implemented, projects and plans will be implemented, and whether the actions of the authorities will meet the expectations of communities.

Source: https://decentralization.ua/