Dutch Municipalities role in Economic Development and Public Private Partnerships

Herman SnelderManaging Director MDF

ContentContent• Municipalities influence on Economic

Development• Dilemma’s in municipal role• Public Private Partnerships at

municipal level

Municipal influence on economic development

Municipalities influence economic development through:

• Planning (policy, area development)• Local task system (revenues)• Knowledge and use of EU, National and

Provincial provisions• Implementation assignments to local

business.• Manner of service delivery• Infrastructure provision and maintenance• Public Private Partnerships

Planning: Municipal policy paperFour year policy sets conditions on what to enhance and what to avoid within the municipality

Municipal choice is dependent on local agenda and therefore local elections.

• e.g. Zutphen, opposition against municipal housing policy caused an electoral shift during elections. New Local Government has changed housing policy.

Planning: Area development plan• The municipal area development

plan complies to the provincial area development plan.

• The zoning in the plan has to be complied with. Asking exemption from the plan is a hard and time-consuming task

• It indicates a.o. industrial, artisan en shopping areas.

Local tax system• Municipalities revenues are based on

the municipal fund and local taxsystems

• Municipalities are entitled to collect taxes, like property tax, commuter tax, tourist tax and parking fees.

• The height of local taxes can be decided upon by the municipalities.

National, EU and Provincial influenceMunicipality:

• Conveyer of subsidies and loan facilities, e.g. favourable tax conditions for starting enterprises, subsidies for CO2 neutral enterprises etc.

• Participation in supra-municipal programmes and projects

• Maintaining European and National rules and regulations on environment (e.g CO2 emission), working conditions, competition, Less rules more service programme etc.

• Complying to Provincial area development plan

Assigning implementation• Municipalities are an important

provider of business assignment to local companies, e.g. roads, buildings, maintenance of parks, swimming pools etc.

• Raises and cuts (crises) in municipal budgets influence the local economy.

Service delivery• The manner in which municipal

services are delivered to businesses is crucial

• Government is known for its array of rules and regulations business must abide.

• ‘More service less rules’: e.g. developing municipal business contact centres.

Infrastructure provision & maintenance

• Businesses accessibility to customers is key. Municipalities are responsible for municipal roads and infrastructure and as such can enhance and hinder the accessibility to businesses.

Dilemma's of Municipalities• Municipalities have to seek a balance

between economic, social, cultural, political and environmental issues. Based on this choices have to be made that both enhance and hinder economic development.

• Industrial area development (outside the area development is hindered)

• Protection of special areas, e.g. historic centres, rural and natural areas.

• Housing area development (municipal land sold to one housing developer, others hindered)

Summary• The role of municipalities in

economic development in the Netherlands is predominantly indirect.

• Municipalities provide the framework for economic development (industrial areas, favourable tax system etc.)

Public Private PartnershipsPPP practice in the Netherlands sporadic, successful practices can be found e.g. the four Leading Technology Institutes (OECD, 2004)Thinking is that practice will increase due to Economic Crisis for efficiency and effectiveness reasons.Practice occurs mainly in low risk projects from government perspective.Government hesitant to use PPP in big infrastructural projects, cause government is risk bearer.

Public Private PartnershipsPublic Private Partnerships at municipal level are occurring in

• Housing area development• Employability (UWV-Entrepreneurs)• Public service buildings like

secondary schools, swimming pools (long-term commitment guaranteed for investor)