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Self-Government Experiment of Kainuu Region 2005-2012

The Kainuu Region realised a self-government experiment during years 2005-2012. Yet the administrative experiment ended on December 31st 2012 after unsuccessful negotiations concerning the continuation, the administrative experiment succeeded well on reorganising services in the Kainuu region, and the results are utilised as planning the future regional state administration reform in Kainuu.

Self-Government Experiment of Kainuu Region 2005-2012 in a Nutshell

Regional Democracy

Democratically elected Regional Council (first time on the Finnish mainland) – direct election was held in Kainuu on October 24th 2004

Increased Responsibility to the Region for its Own Development – Delegation of Decision Making

The Regional Council was granted powers that had traditionally been the domain of the Governmental administration.
The regional administration decided on the allocation of resources allotted in the national budget (including EU –funding).
Regional planning and development and industrial policies fell under regional authority.

Provision of Certain Basic Services on Regional Level

Responsibility for health care and most of the social and educational services were transferred from the municipalities to the region.
Responsibility for the financing remained with the municipalities.

History of the regional self-government experiment in Kainuu 

A number of reasons led to the initiation of the self-government experiment: declining population and associated increase in the older age groups, declining entrepreneurial activity and employment, and weakening municipal economy. In addition, existing administrative and budgeting practices were not considered to provide sufficient support to the initiation of major, effective industry and business development projects in the region. Kainuu was considered as a suitable testing ground for new types of administrative and financing structures.

Preparations were started in 2002. A monitoring group consisting of 92 members representing the municipal and regional authorities and social partners oversaw the work. The executive team had 13 members representing municipal and regional managers.  Altogether the work groups had 670 officials, elected officials and partners from Kainuu. In social welfare and health care services, the preparation work took place in 12 work groups, and there were 9 additional administrators of the experiment in different sectors.

Supported by the above-mentioned arguments, the Act on the regional self-government experiment in Kainuu was passed in the Finnish Parliament in February 2003, and it took force on 1st of June 2003. The experiment started on 1st of January 2005, lasting until the end of year 2012. 

What was the experiment about?

As of January 1st 2005, the Kainuu region was responsible for health care and social services (with the exception of children's day care), as well as vocational and upper secondary education and professional adult education. Regional industrial policy, regional planning and development still fell under regional authority. Regional administration also applied expediency consideration to pass decisions on the use of significant national development funds and EU structural funds, allotting these to their designated purposes. In the national budget for 2005, all national funding for the development of Kainuu was for the first time grouped in a single subsection.

The number of municipalities participating in the experiment was initially nine but the number was reduced to eight when a small municipality Vuolijoki merged with Kajaani (the centre of Kainuu region) in 2007.

The aims of the administrative experiment were to ensure basic services and their quality for all inhabitants in Kainuu, to increase the efficiency on the service sector, to improve regional development activities, and to gain experience on the new regional level.

The Act increased the powers of the Regional Council considerably. The intermediate tier of local administration was given the responsibility to organize all health care, social services (excluding nursery) and secondary education. This was a vast change in the distribution of responsibilities given that typically only specialized health care is organized at the intermediate level. In addition, the new Regional Council was given some responsibilities that are typically in the domain of the state administration, such as the control over the cross-sectoral Kainuu development funding allocated by the Ministry of Employment and the Economy. The highest decision making power was given to a central council consisting of 59 councillors who were elected by the inhabitants of the region.

During the experiment all participating municipalities acted as any other municipality in Finland. They levied taxes and gained government grants as before. However, to finance the new administration and public services provided by the experiment, participating municipalities had a pre-determined share of payments according to which they paid part of their revenues to the Joint Authority of Kainuu Region. Previously municipalities produced the majority of public services by themselves. Only specialized health care was organized by the health district and also these payments were based on usage.

Kainuu Region after the experiment

The administrative experiment succeeded well on reorganising services in the Kainuu region.  Both the educational and health care and social services reported positive results as a result of joint administration. Yet the administrative experiment ended on December 31st 2012 after unsuccessful negotiations concerning the continuation. According to a survey related to the final report of the monitoring committee (Ministry of Finance 5/2013), the main reasons for termination was the consensus principle concerning the continuation stipulated by the legislation, the negotiation and cooperation culture in the Kainuu region as well as the disagreements concerning the financial aspects.

The organisation of Joint Authority of Kainuu region was dismantled but several of the models tested during the administrative experiment are still in use in Kainuu and the development activities continue.  The centralised system of arranging services and the cost-consciousness are main results of the experiment that still benefit the Kainuu region. These results may be exploited also on the national level when striving for vast integration of social and welfare services.