Basic levels of service - LEPs and service objectives

Definition

LEPs (Italian acronym for Basic Levels of Services) are the basic levels of performance and service that must be guaranteed uniformly throughout the country because they concern citizens' civil and social rights. For example, the presence of a Civil registry in each of the nearly 8,000 Italian municipalities is a basic level of service since it is linked to fundamental citizenship rights and services. It would not be acceptable if a municipality did not provide it.

The definition of LEP is, in some cases, implicit in existing rules. As in the example cited, the state law has entrusted or delegated specific tasks to local authorities requiring them to guarantee the service for decades. In general, however, the reform of Title V of 2001 introduced the concept of LEP in the Constitution (Article 117, paragraph 2, letter m), indicating it among the exclusive powers of the state:

The State has exclusive legislative powers in the following matters: (…) determination of the basic level of benefits relating to civil and social entitlements to be guaranteed throughout the national territory;

The Italian Constitution Art. 117 Paragraph 2, Letter m

However, LEPs have not yet been defined, although provided by the Constitution.

Excluding those already implicit in existing regulations, LEPs are still to define in many sectors, from social services to local transport, leaving the constitutional provision unfulfilled on a decisive point. As we will see, defining the Basic Levels of service necessarily increases the burden on the State coffers.

As established by the delegated law on fiscal federalism (42/2009), there is, in fact, a direct relationship between the definition of LEPs and the determination of standard costs and expenditure needs of municipalities and other local authorities.

Defining LEPs means establishing which services must be provided throughout the country to guarantee citizens' social and civil rights.

In practical terms, the definition of the basic levels of Service entails that the state must provide municipalities, provinces, metropolitan cities, and regions with the resources to

guarantee them, supporting, for example, the local governments with low fiscal capacity. Otherwise, only the municipalities with greater resources could guarantee the services established by LEPs, contradicting the constitutional provision.

All citizens have equal social dignity and are equal before the law, without distinction of sex, race, language, religion, political opinion, personal and social conditions.

It is the duty of the Republic to remove those obstacles of an economic ors ocial nature which constrain the freedom and equality of citizens, thereby impeding the full development of the human person and the effective participation of all workers in the political, economic and social organisation of the Country.

The Italian Constitution, Article 3

DATA

The definition of LEPs represents a crucial challenge for our country and citizens because it must meet 2 fundamental needs:

• define, for each subject (health, education, social care, transport), an adequate standard of service to be guarantee throughout the national territory;
• guarantee, where necessary, to municipalities, provinces, metropolitan cities, and regions the resources to provide the services based on LEPs.

LEPs meet 2 needs: define an adequate standard of service and guarantee the resources to achieve it.

From a methodological point of view, translating citizens' civil and social rights into measurable indicators and service levels is quite challenging.

The process involves a series of complicated steps:

1. mapping the services provided on the territory by each local authority.
2. defining the services in which the determination of LEPs is necessary;
3. assessing the expenditure and the services in the sectors for which LEPs have been defined;
4. determining the costs and the standard expenditure needs to establish whether the local authority has the resources to provide the service. If not, the following step is calculating the additional resources.

The critical issue is that after defining adequate service standards (for example, the number of places offered by nursery schools per 100 resident children), the state must also verify that the resources available to institutions are sufficient, and if not, allocate additional resources. Introducing LEPs is fundamental to ensure an adequate level of services, but this has a cost. It is the case of services with widespread heterogeneity on the national territory, such as nursery schools and socio-educational services for early childhood.

In 2019, 89% of municipalities in Emilia Romagna provided early childhood services. In the same year, in Calabria, they amounted to 22,8%.

As the map shows, the provision of services is highly heterogeneous. According to Istat data, in 2019, some municipalities provided over 50 places in nursery schools per 100 children. Others, instead, did not offer the service at all, or it was much more limited.

 

The service objectives represent the first step towards LEPs.

The above illustrated case explains how identifying the LEPs to guarantee throughout the national territory implies the reduction of territorial gaps through the allocation of additional resources by the state.

The first standardization in 2019 and the definition of the service objectives (Italian acronym - Os) in 2021 aimed to bridge these gaps. Thanks to these methodological innovations approved by the Technical Committee for Standard Expenditure Needs, all municipalities now receive minimum financial support for nursery schools and social services (2021 Budget Law 2021, Article 1 paragraphs 791 and 792) while, in the past, some municipalities did not receive any for providing essential services like, for example, early childhood services.

The service objectives are not LEPs but represent a minimum level that all municipalities should ensure in providing a service. The Municipal Solidarity Fund was increased to help achieve it in social services and nursery schools.

From 2026, the Municipal Solidarity Fund will be increased by € 300 million annually to strengthen nursery schools. Between 2021 and 2025, the increase will average almost 200 million per year.

 

Analysis

To date, the definition of LEPs remains one of the most important aspects of implementing fiscal federalism, as highlighted in parliament discussing the implementation of the law on fiscal federalism.

The failure to exercise the power of legislative delegation and legislative decrees affected some critical sectors: the definition of LEPs for municipal public assets and services to implement the related equalization; the definition of standard expenditure needs and LEPs for the regions. (...)

The service objectives can speed up the implementation of federalism and foster convergence in the provision of services.

From this point of view, the choice to implement the service objectives can be a step towards adopting LEPs.

As seen above in social services and nursery schools, this method achieves a series of objectives. First of all, it speeds up the transition towards fiscal federalism, which, as already discussed, needs an equalization mechanism to overcome the disparities which characterize our country. Second, service objectives help convergence between authorities. Only by aligning the standards throughout the national territory it is possible to identify the basic service levels. The path towards convergence (today with the Service Objectives, tomorrow with LEPs) obviously needs resources. The increase of the Municipal Solidarity Fund under the 2021 budget law – linked to the service objectives - introduces a mechanism that can become structural with LEPs.