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Transcript Of Supporting public administrations in EU Member States to

Supporting public administrations
in EU Member States to deliver reforms and prepare for the future
SUPPORTING PUBLIC ADMINISTRATIONS IN EU SMtrEuMctBurEaRl STATES TO DELIVER REFORMS AND PREPARE FOR THE FUTURE I 1 Reform Support

Directorate-General for Structural Reform Support Unit REFORM.B.2 Governance & Public Administration Email: [email protected]
This communication material is based on the Commission Staff Working Document SWD(2021)101 Supporting Public Administrations in EU Member States to Deliver Reforms and Prepare for the Future

Manuscript completed in April 2021
The European Commission is not liable for any consequence stemming from the reuse of this publication.
Luxembourg: Publications Office of the European Union, 2021
© European Union, 2021
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Cover: © iStock.com/scyther5 pages 1, 3, 7 © iStock.com/aurielaki; page 22, © iStock.com/miakievy.

Print ISBN 978-92-76-32474-4 PDF ISBN 978-92-76-32475-1

doi:10.2887/649256 doi:10.2887/931658

HT-02-21-378-EN-C HT-02-21-378-EN-N

FOREWORD

Elisa Ferreira Commissioner for Cohesion and Reforms

Europe is at a crossroads. Confronted with unprecedented challenges, and at the same time with unique opportunities. The recovery from Covid, the digital revolution, the green economy that works for people: our goal is to navigate these and other challenges sustainably, while preserving our core values. The quality of public administration will be crucial.
Public administrations translate EU law and programmes into concrete actions. They provide essential services and manage public spending. They are critical factors in long term economic, social and territorial cohesion. But the current administrative systems were designed in times of relative stability, when changes were slow. Nowadays, administrations must be more flexible and resilient. Recent crises, including Covid, and future events such as the digital revolution, demonstrate a clear need: public administrations must make organisational, technological and cultural transformations to move with the times.
So the reflection on the evolution of public administration in Europe, presented in the next page, is both timely and innovative. It is timely, as NextGenerationEU provides unprecedented resources to the Member States to undertake unprecedented investments and reforms. We must seize the opportunity to modernise our public administration. The reflection is also innovative, as it focuses in a holistic manner on challenges and opportunities ahead for our Member States, as well as the many ways the Commission can and will continue to support public administration.
High quality, consistent public administration can and should be available to all European citizens regardless of their place of residence, age or socio-economic background. Such public administrations create and maintain a fair and competitive social and economic environment. They are critical enablers for innovation and growth.
As Commissioner for Cohesion and Reforms, it is my firm intention to mobilise all the resources at our disposal to support Member States to improve their administration, in line with the United Nations’ Sustainable Development Goal for effective, accountable and inclusive institutions. Let us mobilise the Technical Support Instrument and the Cohesion Funds. Let us promote dialogue, with national administrations and all levels. Let us create public administrations ready for the challenges of digitalisation, the green transition and sustainable development – and fit to serve current and future generations of European citizens.

SUPPORTING PUBLIC ADMINISTRATIONS IN EU MEMBER STATES TO DELIVER REFORMS AND PREPARE FOR THE FUTURE I 1

CONTENTS

1. Introduction

3

2. Public administrations as a foundation for EU success

5

2.1. Good public administration enables economic prosperity

5

2.2. Good public administration enables

social progress and fairness

7

3. Making public administrations fit for the present and

future challenges

9

3.1. Fast technological change

9

3.2. Demographic changes and skills shortage

10

3.3. The increasing complexity of policy issues

11

3.4. Green transition and climate adaptation

13

3.5. Increasing needs to be covered with public finances

14

4. The Commission supports Member States in facing

the challenges of public administration

15

4.1. Helping to identify issues

15

4.2. Supporting the design and implementation of reforms

16

4.3. Providing capacity-building tools

17

4.4. Providing (peer-based) guidance

17

4.5. Facilitating the exchange of knowledge and experience

18

4.6. Providing financial resources

19

4.7. Promoting research on and innovation in public administration

20

5. External and internal policy coherence

on public administration

21

5.1. Providing support for public administration reforms

for accession to the EU

21

5.2. Promoting good governance within the institution

21

6. Conclusion

23

2 I DIRECTORATE-GENERAL FOR STRUCTURAL REFORM SUPPORT

SUPPORTING PUBLIC ADMINISTRATIONS IN EU MEMBER STATES TO DELIVER REFORMS AND PREPARE FOR THE FUTURE

1. INTRODUCTION

The EU’s institutions and Member States identify, design and implement policies to improve the lives of the 445 million people living in the European Union. This work ranges from overcoming the momentous COVID-19 health crisis to addressing the more longterm challenges of making Europe climateneutral (1), sustainable (2) and ready for the next digital decade (3). More needs to be done for greater social justice and fairness (4) and to prepare the EU economies for the future while respecting the specific local needs, reducing geographical disparities (including the growing rural divide) and the problem of ageing and declining populations in different parts of Europe (5). An unprecedented EU budget of EUR1.8 trillion (6) has been adopted to achieve the EU’s objectives: this includes the 2021-2027 long-term EU budget and the NextGenerationEU recovery package, with tools such as the Recovery and Resilience Facility (7), the Just Transition Fund, the Recovery Assistance for Cohesion and the Territories of Europe (REACT-EU) (8).
Among the many components of this urgent and important policy agenda, the quality and capability of public administrations of the Member States deserve special attention. Public administrations at national, regional and local level are the ones that deliver crisis response, provide services, implement reforms, manage investments and, more

generally, manage public spending to create expected social value. They translate EU law and programmes into concrete actions with long-term effects on economic, social and territorial cohesion, as well as on technological progress (9). They are responsible for the effective and efficient uptake of the EU Funds. They play a fundamental role in preserving the EU’s shared values (10). Quality public institutions are crucial for the EU to address the climate crisis and the economic and societal transitions outlined in the UN’s Sustainable Development Goals (SDGs). The quality of institutions and the coherent implementation of policies are part of the SDGs themselves (namely SDGs16 and 17) (11). Public administrations are the foundation on which the EU builds its success (12). This foundation needs to be solid if the EU is to be strong.

SUPPORTING PUBLIC ADMINISTRATIONS IN EU MEMBER STATES TO DELIVER REFORMS AND PREPARE FOR THE FUTURE I 3

The quality of public administration in the Member States, however, varies significantly. The Commission’s Annual Sustainable Growth Strategy for 2021 (13) highlights the need to further improve the effectiveness of public administrations. As an example, the economic costs associated with failure of national public administrations to implement the environmental acquis alone were estimated at around EUR 50 billion, including costs for infringement cases (14). While some Member States lead world indices for government effectiveness, others need to catch up considerably. The 2008 economic crisis widened this performance gap among Member States. Some of the main weaknesses are linked to the implementation of the necessary reforms and the management of related investments. In some areas, digital services are being rolled out unevenly. Equal access to public services (for example, for elderly people or people who live in remote areas) is still to be ensured. Citizen trust and engagement are

sometimes low. Even the best performing public administrations need to continue to adapt to the increasingly complex challenges of a rapidly changing world.
This staff working document is based on the premise that the current moment presents not only profound challenges but also unique opportunities for the administrations. They need to rethink, redesign and redeploy themselves to operate effectively and to prepare for the needs of the next generation in an increasingly complex, interrelated and uncertain environment. Section 2 of the document draws attention to the role of Member States’ public administrations as the engine that drives the EU. Section 3 highlights the challenges that lie ahead for public administrations and suggests possible improvements. Sections 4 and 5 present the Commission’s initiatives to help EU and neighbourhood countries build better public administrations.

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2. PUBLIC ADMINISTRATIONS AS A FOUNDATION FOR EU SUCCESS
National, regional and local public administrations in the Member States are the direct interface between the EU and the citizens. They are the main drivers of social trust in national and EU policies. Reducing the time spent to get a certificate, or upgrading the tools to obtain a document can significantly improve people’s lives and the success of existing and potential new businesses in the European Single Market.
Public administration comprises all organisations of the executive power at central, regional and local level involved in the design, regulation or enforcement of public policies. It is governed by special rules for recruitment, functioning and accountability.
The Commission looks at the following key aspects of public administration: • Policy planning, policy coordination
and policy development • Civil service and human resource
management • Accountability • Service delivery • Public financial management.

2.1. Good public administration enables economic prosperity
The quality of public administrations is a defining factor for the competitiveness of Member States, and therefore, of the EU as a whole (Chart 1). Differences in the quality of institutions across countries helps explain differences in income per capita. Countries with stronger institutions are able to specialise in high value added sectors that are more reliant on innovation (15), to raise more fiscal revenues, and to design and implement more effective reforms and investment projects (16). They are in a better position to provide social safety nets (17) and implement comprehensive, context-specific strategies for regional development.
Public administrations at central, regional and local level implement directly about 35% of the EU budget. They manage the public sector, which forms the biggest EU ‘industry’, spending 47% (18) of EU GDP and employing about 25% (19) of the EU workforce. Public investments account for around 3% of EU GDP (20). In some Member States, more than 50% of these investments are funded under EU cohesion policy (21). A large part of these public resources is spent through public procurement (14% of EU GDP (22).
As the use of public procurement favour smaller entities to enter and operate into the market, well-functioning public administrations can therefore help the 25 million active businesses in the EU, with 99.8% of them classified as SMEs (23), to thrive and provide stable employment for individuals. Public administrations play a key role (24) for the proper functioning of the Single Market and amplify the effect of its four freedoms (free movement of people, businesses, capital and services) by increasing business and consumers’

SUPPORTING PUBLIC ADMINISTRATIONS IN EU MEMBER STATES TO DELIVER REFORMS AND PREPARE FOR THE FUTURE I 5

Global competitiveness index 2015

Chart 1. Relationship between good governance and competiveness, based on World Bank 2019 data
6.0

5,5
5,0
4,5 RO
4,0

BG EL

PL IT
MTSI HU SK HR

DE FI

UK

NL

FRBE LU SE DK

AT IE CZ ES
EE PT LV LT

CY

3,5

50

55

60

65

70

75

80

85

90

95 100

Government effectiveness 2015

Source: World Bank, Worldwide Governance Indicators.

confidence, encouraging innovation and attracting (foreign) investments. Improved tax collection and revenue management can contribute to a higher social acceptance of taxation, reduced compliance costs for individuals and business (reduced red tape) and improved public administrations’ financial capacity to implement reforms and ensure the delivery of services.
Future growth will be built on the green transition. Public administrations can help to achieve the EU goal of becoming the first climate-neutral bloc in the world and be climate-resilient (25) by 2050. They can do so by facilitating the significant EU and national public investments, by supporting economies and societies to adapt to climate change, by addressing climate and environmental risks and by reducing their own environmental impact. Public administrations have a key role for the achievement of the 2030 sustainable agenda, which is at the heart of EU policies.

Securing the successful digital transformation of European economies and public administrations is vital for the future of the EU’s social and economic model and, more generally, for its competitiveness. During the COVID-19 pandemic, digital interaction has been the public administration’s main (and often the only) communication channel with citizens, enabling it to ensure business continuity. The experiences with COVID-19 have made it possible to identify the existing challenges and pathways for developing a value-based (26) digital transformation in Europe now and for the future (27).
The Tallinn Declaration and the European Interoperability Framework have paved the way to digital transformation and the implementation of a number of key principles, including the once-only principle (28) which allows individuals and businesses to provide information to administrations only once, thus reducing transaction times, costs and errors. The cross-border exchange of documents (birth certificates, diplomas, business certificates,

6 I DIRECTORATE-GENERAL FOR STRUCTURAL REFORM SUPPORT

etc.) through the Digital Single Gateway will lower substantially the administrative burden for citizens and will have a significant impact on minimising the carbon footprint (29). Similarly, the proposal for an EU Single Window Environment for Customs aims to make it easier for different authorities involved in goods clearance to exchange electronic information submitted by traders. Digitalising tax collection improves the performance of national tax administrations and reduces in particular the VAT collection gap. The Member States and the Commission have already carried out a considerable amount of work on the electronic systems necessary to make the Customs Union a modern, interconnected and paperless environment. The remaining electronic systems should be deployed across the EU before end 2025.
Digital tools such as electronic identification and the electronic signature (and other trust services included under the eIDAS Regulation and the upcoming Commission proposal (30)) enable individuals and businesses to safely access digital public services across Europe and reduce greenhouse emissions by reducing movements. Web accessibility (31) increases digital inclusion for persons with disabilities and the elderly and harmonises the internal market for web accessibility products and services, based on common accessibility requirements. Public administrations across Europe are increasingly using new and disruptive technologies, such as artificial intelligence and blockchain. Used in the right way, these new technologies can substantially improve the public sector’s efficiency and effectiveness while making public services easier to access and use (32).

2.2. Good public administration enables social progress and fairness
Public administrations shape the European social market economy and are enablers of the European Pillar of Social Rights.Their role is to ensure access to quality public services (such as early childhood education and care, social services, health and long-term care, but also water, energy, digital services). Whether income support schemes, such as unemployment benefits and minimum income benefits, reach the people in need depends on the effective administrative organisation and low administrative burden. Issues such as limited interoperability to ensure borderless public services and data flows, complicated administrative processes, lack of common standards and complex interactions between public administrations undermine effective social security coordination across the EU to the detriment of the free movement of people.
Public administrations implement active labour market policies that offer people more job opportunities and reduce the mismatch between jobs and skills. They promote lifelong learning and contribute to better career choices, including through the European skills data space (33), by providing information about labour market trends, workforce skill sets, available education and training offers. Public administrations facilitate EU labour mobility by ensuring equal treatment of citizens under national law, tackling social dumping and undeclared work by sharing social security data. Enforcement bodies such as labour and social inspectorates play a key role in ensuring respect of labour law and preventing social fraud. They have a key role in addressing the persisting disparities in skills and labour market demands across regions. Conversely, studies (34) show that low quality public administration translates into negative perceptions about life and

SUPPORTING PUBLIC ADMINISTRATIONS IN EU MEMBER STATES TO DELIVER REFORMS AND PREPARE FOR THE FUTURE I 7

career prospects. It encourages brain drain while making investments in human capital less effective (35). The quality of public administrations will be even more important for the proper functioning of the labour market in the future, given the increase in new forms of work and technological opportunities and challenges.
Public administrations can create avenues to bridge the social gap. Through programmes aimed at increasing social inclusion (36), digital literacy and the capacity to tackle inequalities, they can decisively help to achieve social cohesion (37). In the context of the digital transformation of public services, public administrations are responsible for ensuring all citizens quality, proximity and equal and easy access to public services. The COVID-19 pandemic has shown how differences in access to information technology and its use can disrupt access to services and deepen inequalities and social divisions. Tackling the digital divide is even more important, given the historic shift in using digital technologies in work, education, communication and public services, as well as the existing discrepancies in access to broadband internet and digital skills.

The impact of the COVID-19 crisis calls for the design of even stronger poverty‑proof policies and the promotion of social entrepreneurship. Reaching out to more vulnerable groups of the population often remains a challenge for public services, as addressing their needs requires personal targeted social services delivered by specialised actors. These services act as safety nets and enablers for the most disadvantaged. Collaboration between the public and civil society to create (co-creating) public services improves effectiveness of the interventions for the vulnerable and disadvantaged groups and often generates better outcomes (38). The design and delivery of services to that address complex, long-term situations often drives social innovation (39).

8 I DIRECTORATE-GENERAL FOR STRUCTURAL REFORM SUPPORT
AdministrationsServicesReformsAdministrationQuality