“There is a roof, but the keys were not given...”. Unfinished decentralization…

Today, on the Independence Day of Ukraine, this comparison is felt especially acutely.

Years of full-scale war have proven an undeniable fact: Ukraine's real independence begins not with solemn speeches or attributes of statehood, not even with high offices, but with the yard of one's own home and the ability of people to unite around a common goal. It was self-government that became the shield that allowed the regions to preserve manageability, logistics, and mutual assistance. But leaving this shield in a half-position any longer is impossible.

The Gromada Group network continues to systematically study the real state, achievements, and pain points of decentralization, involving leaders of territorial communities from all over the country in an honest conversation.

In the new episode of the Voice of the Community program (a joint project of the Kharkiv Press Club and Gromada Group), in a conversation with journalist Oleksandr Shvets, Avangard settlement head Serhiy Khrustovskyi frankly emphasized: the reform survived thanks to local people, but it has not yet been brought to a logical conclusion. And this incompleteness today creates the largest hidden cracks in the foundation of our future.

The main problem of the current stage of reform lies in the gap between what communities were entrusted to do and what was provided to ensure this execution.

Local self-government received on its shoulders the care of schools, hospitals, social payments, local roads, and support for thousands of displaced persons. However, financial tools still remain under constant pressure from the central authority.

“We were handed a huge volume of powers and responsibility. We in Avangard took everything: built from scratch and launched an Administrative Services Center (ASC), which today is one of the best in the region, created our own departments of architecture, urban planning, and social protection. But the resource base is limited. Every year we see attempts to cut the personal income tax (PIT) share for communities, and withdrawal mechanisms change. We do not want to go with an outstretched hand to the capital, we want clear and immutable rules of the game,” notes Serhiy Khrustovskyi.

The imbalance of budget legislation turns local planning into constant firefighting. Instead of investing in long-term development, many communities have to count every penny to cover basic expenses.

The Avangard settlement head considers the situation with local taxes to be the greatest systemic absurdity of the unfinished reform. Tax revenues are the basis of the vital activity of each territory, yet local self-government bodies are deprived of the right to independently administer them.

“This is some strange thing: taxes go to the community budget, but their administration is handled by the State Tax Service. It primarily worries about the central budget. Nobody will care about our revenues like we do! The state loads us with social obligations, but does not give the right even to send a tax notice to a negligent taxpayer or go to court with them. We need to transfer the administration of local taxes to communities — and we will show a colossal result across the whole country,” Khrustovskyi is convinced.

Using Avangard as an example, the head proves: even without direct levers, but only thanks to its own tax monitoring department, the community manages to attract over 20–40 million hryvnias in additional revenues every year.

If this tool is provided to all capable communities at the legislative level, the country will receive a powerful economic push.

District councils are an outdated rudiment, prefectures are a requirement of the time

Another fundamental barrier is the lack of a clear division of powers between authorities and the delay of administrative-territorial restructuring at the district and regional levels.

Serhiy Khrustovskyi shares the position of the architects of decentralization reform regarding the need for the final liquidation of outdated management levels.

“District councils as of today are an absolutely unnecessary structure that only devours budget funds. They have neither powers nor real functions, but continue to exist. Instead of bulky district administrations with bloated staffs of 150–200 people, compact prefectures following the French model should be created — 10–20 specialists each. At their head should stand a prefect with the function of legal oversight, who will monitor the legality of decisions, but will not interfere in the economic life of the community,” emphasizes the settlement head.

Instead, communities today are forced to waste colossal resources on duplicating correspondence and bureaucratic pressure from numerous control bodies.

Heading the community for almost 16 years and having gone from the head of a small village to one of the wealthiest municipalities in the region, Serhiy Khrustovskyi is convinced: the success of decentralization also depends on the quality of personnel renewal.

He frankly supports the initiative regarding legislative limits on the tenure of one person in the position of community head.

“One term for a leader is not enough: in the first years you are only learning, forming a team, making projects. In the second term you start to actually build these projects and implement them. And the third is finalization, consolidation of results. Maximum — three terms. Further on, the efficiency of a manager decreases, the person burns out. It is necessary to give space to new people and new ideas so that the community does not stagnate,” believes the head of Avangard.

In order for decentralization to finally transform from a prolonged experiment into the main guarantee of our state resilience, the country needs to take several decisive steps:

• Secure financial autonomy: legalize stable revenue sources for communities and transfer to them the rights to administer local taxes.

• Liquidate district councils and carry out reorganization of District State Administrations (RDA): form compact institutes of prefects with functions exclusively of legal monitoring.

• Eliminate inefficiency: after the end of the war, review the capability and carry out consolidation of subsidized communities.

• Establish legislative timeframes: introduce clear term limits for community heads for the sake of healthy personnel rotation.

   

Local self-government is a living organism in which people daily put into practice their right to be masters on their own land.

Finishing the decentralization reform means giving communities full power. Because only from the deep roots of strong and capable communities grows a truly invincible, unified, and Independent State.

That is why Gromada Group will continue to provide a platform for community leaders for professional analysis of management decisions and advocacy of the interests of local self-government.