The ongoing decentralisation reform is one of Ukraine’s key policy endeavors that has the potential to lay the foundations for a more democratic, prosperous Ukraine with strong municipalities that are able to provide their citizens with quality public services and to promote local economic development, while widening possibilities for citizen participation.

Since the adoption of the Concept on Reform of Local Self-Government and Territorial Organisation of Power in April 2014, many steps have already been undertaken that provided the basis for first tangible results of the reform. The donor community appreciates progress achieved on many fronts, including the optimisation of the administrative and territorial structure and the increasing fiscal autonomy of local self-governments, giving them opportunities for much needed investments in local infrastructure and for enhancing public service delivery.

The donor community supporting the decentralisation and local governance reform in Ukraine would like to emphasise its fruitful cooperation with the Government of Ukraine, in particular the Ministry of Regional Development, Construction, Housing and Communal Services, during recent years for the benefit of the reform.

With the establishment of a Donor Board on Decentralisation and the development of a Common Results Framework integrating technical assistance and governmental strategies and action plans, this cooperation has recently moved to a new level of partnership.

The international community has been generously providing technical assistance to the reform and intends to continue doing so. The further success of the decentralisation reform, its irreversibility, and the sustainability of the new local self-government system will largely depend on further strengthening the legal and regulatory framework, which should consider the following points:

• We believe that it is of utmost importance to ensure a smooth continuation of the amalgamation process and therefore express our hopes that favorable legislative conditions for the emergence of further amalgamated hromadas can be created, in line with established international practice and taking into account the legitimate interests of villages, settlements and towns that have so far not amalgamated into a larger community.
• In particular we would very much hope that a reasonable solution regarding the establishment of an efficient rayon level structure can be found in the near future. The status of rayons, the territory of which is fully or mostly covered by amalgamated hromadas, requires clarification.
• The implementation of the reform at the local level is not possible without efficient, professional and accountable local self-government service enjoying greater autonomy and attracting talented professionals. Thus, the reform of the civil service in local self-government bodies, fully aligned with the European Charter of Local Self-Government principles, is crucial to sustain the reform agenda.
• Believing that hromadas which enjoy larger powers and resources will be the cornerstone of a prosperous and democratic Ukraine, we would favor enhanced land management and spatial planning competencies for local self-governments. If the jurisdiction of hromadas is indeed extended beyond the boundaries of settlements, this will significantly contribute to local economic development.
• Fiscal decentralisation is a fundamental pillar of the overall decentralisation reform and shall therefore be sustained or increased as appropriate to guarantee subsidiarity to the maximum practical extent. Ensuring that local governments receive adequate funding for functions they have been assigned is critical for continued success of the reform. We believe that stable and predictable revenue sources for local budgets, including equitable and transparent state transfers and increased own-source revenue, are essential to further advance regional and local development.

The reform eventually also needs to be put on a solid constitutional basis.

We welcome the opportunity to discuss the way of resolving outstanding legal and regulatory issues pertaining to decentralisation, local self-governance and administrative-territorial reform of Ukraine with representatives of the Ukrainian Parliament (and other important stakeholders) today. We appeal to the different political factions and indeed all members of the Verkhovna Rada to ensure legislative settlement of the issues that currently hinder further progress of the decentralisation and local governance reform in Ukraine, which is central for Ukraine’s security, prosperity, democratic development and European integration.

This statement is supported by the governments of Canada, Denmark, Germany, Poland, Sweden, Switzerland, the United Kingdom and the USA as well as by the Council of Europe, the European Union, the OECD and the United Nations Development Programme.