Annotation. The article researches the issue of decentralization of power in Ukraine. Key areas of regulation as regional and local development, forming of local communities, fiscal decentralization, and distribution of powers between the executive and local governments have been determined. The main concerns to achieve the aim are: lack of financial independence of communities, non-completeness of reforms in the areas of health, education, culture, the difficulty of implementing proprietary rights of community on municipal property. To eliminate defined issues in the article the measures have been proposed that will form self-sufficient local communities that will contribute to the development of economic potential.

Keywords: decentralization of power, regional and local development, self-sufficient local communities

The reform on the organization of local authorities and local government on the principles of decentralization is the most important area of systemic change of the Ukrainian society.

From 2015 to the first half of 2016, based on the developed principles and adopted policy documents [1, 2], a vast array of normative legal acts, concerning the regulation of regional and local development, the formation of capable local communities, fiscal decentralization, distribution of powers between the executive authorities and local authorities required for practical implementation of decentralization reforms, were formed. The existing legislative framework generally meets the best European standards. In particular:

• the basis of public policy and regional voluntary association of local communities [3];

• the authority in Architectural control [4];

• authority for state registration of legal entities and individuals, entrepreneurs and community groups [5], and the authorities of state registration of rights on immovable property and their encumbrances [6] were given to the executive bodies of local self-government of regional significance, providing the possibility of acquiring these powers to other executive councils’ bodies;

• the powers of local authorities in the provision of administrative services were extended [7];

• the Constitutional Commission under the President of Ukraine prepared the draft amendments to the Constitution as for power decentralization that had previously been adopted by the VerkhovnaRada of Ukraine [8].

Simultaneously with the formation of legal framework, the institutional support for the implementation of decentralization reforms is being improved. The procedure of reform united all branches of government: the President of Ukraine, the VerkhovnaRada of Ukraine, the Cabinet of Ministers of Ukraine, the Ministry of Regional Development, Construction and Housing and Communal Services of Ukraine. In all regions of Ukraine the Ministry of Regional Development in cooperation with the Association of Cities of Ukraine with the support of international partners, donors have formed regional offices of decentralization reforms and development.

In 2015 the practical implementation of the decentralization reform measures was commenced. Due to the introduction of the practice of new norms - planning of Budget and Tax Codes of Ukraine - the significant results in the area of fiscal decentralization have been achieved. In particular, the delegation of additional budget authority to local governments and securing stable revenue sources for their implementation, introduction of a new mechanism for budget management, the increase of the expenditure autonomy of local budgets, the introduction of new subsidies from the state budget to local budgets, the increase of the investment resources of local budgets have been implemented.

For example, in accordance with findings of 2015 the revenues of the general fund of local budgets of 99.8 billion USD were achieved, accounting for 116.0% of the annual appropriations approved by local councils. The surplus in revenues to the general fund of local budgets in 2015 compared to 2014 amounted 29.6 billion USD, or 42.1%. The proportion of expenditures for self-governing authority went up and a new mechanism for budget management was introduced.

During January-June 2016 the general fund of local budgets (without transfers) received 65.0 billion USD, accounting for 62.2% of annual revenues, approved by local councils. The growth in revenues to the general fund compared to January-June 2015 (in comparable terms, excluding uncontrollable territories) amounted to 21.2 billion USD, or 48.5%.

However, there are some issues threatening the success of decentralization reform that remain unresolved:

• there ought to be the financial dependence of regions, communities from the center. The share of local taxes in the structure of local budgets in 2015 increased and reached 22.5% (7.9% in 2014), which is a positive trend, but it is not enough for self-development;

• the reforms in the areas of health, education and culture have not been conducted. However, decentralization involves the creation of an effective system to provide high quality of social services regardless of place of residence;

• the basic principle for democracy ubiquity of local government is violated. Local communities and local councils mainly possess the land within settlements, but instead they are removed from resolving issues in land relations outside settlements.

In general, village, town and city councils fulfill their powers of land for approximately 12.4% of Ukraine. Land outside the settlements is mainly in private and public property, and some of the state executives have been managing it lately. As a result, the local governments are deprived of the opportunity to plan the development of the areas; the community - to defend its interests in decision-making on land use.

Problematic is the situation with property rights of communities to municipal property. In Ukraine there are no registers of communal property belonging to individual communities, most settlements have not defined their territory yet, and the mechanism of succession to the communal property has not been enjoyed. It creates opportunities for low use of public property, ineffective performance of local councils, illegal alienation of communal property.

The implementation of reforms requires improving the professional level of local government and local authorities. The success of decentralization depends largely on solving these issues.

In order to improve legislative support of reforming the territorial organization of authorities based on decentralization, in our opinion, the following steps ought to be done:

• create a constitutional basis for legislative regulation of the process of decentralization of power, continuing the work of the relevant amendments to the Constitution of Ukraine;

• adopt a basic law "On Administrative formation of Ukraine", which would regulate principles of state policy in this area, the construction of a new administrative and territorial structure, standardized criteria and requirements for the administrative units at different levels etc.

• prepare and adopt a new version of the Law of Ukraine "On local government in Ukraine", which would have unified the proper functioning of local government.

In order to improve the system of quality administrative and social services the next measures should be implemented:

• form the legal framework for decentralization of powers of all branches of authorities in sectors providing administrative and social services;

• develop a conceptual framework and model for reforming all areas of social services, particularly education system, health care and other industries with the main provisions of the Concept of reforming the local self-government and territorial organization of power in Ukraine;

• develop and implement national standards (norms) as administrative, social and other services to the population in the relevant areas;

• reform the system of administrative services as "transparent" offices.

In order to strengthen the material and financial basis of local government, in our opinion, it is essential to:

• take into account the international and domestic experience to continue the development and implementation of effective mechanisms and tools of local budgets that have to relate to assigned with the local government responsibilities in order to promote economic development at the local level;

• improve procedures for development, approval and implementation of decisions on financing local development projects, tighten control over the selection of projects to take measures to ensure the stability of funding;

• change the current legislation in matters of admission to the local budgets of income tax companies that operate in the community;

• take measurers as for the empowerment of local governments in order to control the use of land;

• improve the functioning of the single automated system of the Cadastre state land on Ukraine i.e. cadastral maps. Make an inventory of the communities’ land according to the local cadastre;

• create an inventory and open registers of communal property over the local communities, strengthen the responsibility of officials of local government for the use of public property.

In order to strengthen the human resourcing and operation of government authority and local authorities it is necessary to consider:

• development and adoption of a new Law of Ukraine "On service in local government," which determines the principles and bases of service in local government;

• establishment of conducting the transparent competitions for the selection of personnel for vacant positions in the local executive bodies and local authorities, to develop new qualifications for staff;

• adoption of the Law of Ukraine "On administrative procedures" that will regulate relations of local authorities, local governments and their officials and other entities that perform power management functions as for adoption of administrative regulations and their implementation at the legislative level;

• establishment of training programs for officials’ skill improvement at local governments, local councils officials of local authorities with the involvement of public institutions, local government associations and others.

The implementation of the proposed measures will form self-sufficient local communities that will contribute to the development of economic potential. At the same time, the improvement of the standard of living in the regions of Ukraine will be the basis for the unity of our country.

 References

1. The official website of the Association of Regional Development Agencies of Ukraine [Electronic resource]. – Access mode: http://www.narda.org.ua
2. On approval of provisions on regional development agency, the Cabinet of Ministers of Ukraine of 11.02.2016 № 258

[Electronic resource]. – Access mode: http://www.kmu.gov.ua/control/uk/cardnpd?docid=248941325

1. On a voluntary association of local communities: Law of Ukraine of 05.02.2015 № 157-III [Electronic resource]. – Access mode: http://zakon0.rada.gov.ua/laws/show/157-19
2. On amendments to some legislative acts of Ukraine concerning the decentralization of powers in the field of architectural and construction control and improvement of urban law: the Law of Ukraine of 09.04.2015 № 320-VIII [Electronic resource]. – Access mode: http://zakon2.rada.gov.ua/laws/show/320-19
3. On Amendments to the Law of Ukraine "On State Registration of Legal Entities and Individual Entrepreneurs" and other legislative acts of Ukraine to decentralize powers to the state registration of legal entities, individual entrepreneurs and community groups: the Law of Ukraine of 26.11. 2015 № 835-V [Electronic resource]. – Access mode:  http://zakon3.rada.gov.ua/laws/show/835-19
4. On amending the Law of Ukraine "On State Registration of Rights to Real Estate and Their Encumbrances" and some other legislative acts of Ukraine on decentralization of powers of state registration of rights to immovable property and their burdens: The law of Ukraine of 26.11.2015 № 834-VIII [Electronic resource]. – Access mode: http://zakon2. da.gov.ua/laws/show/834-19/page
5. On amendments to some legislative acts of Ukraine regarding the empowerment of local governments and optimization of administrative services: Law of Ukraine of 10.12.2015 № 888-VIII [Electronic resource].– Access mode: http://zakon2. da.gov.ua/laws/show/888-19/page
6. On the prior approval of the bill on amendments to the Constitution of Ukraine concerning the decentralization of power, ruling Supreme Council of Ukraine of 31.08.2015 № 656-VIII [Electronic resource].– Access mode: http://zakon4.rada.gov.ua/laws/show/656-19
7. On approval of Methods of forming competent local communities: Cabinet of Ministers of Ukraine 08.04.2015 № 214 [Electronic resource]. – Access mode: http://zakon.rada.gov.ua/laws/show/214-2015-%D0%BF
8. The decentralization of power.Combining the community [Electronic resource]. – Access mode: http://decentralization.gov.ua/region