Internal territorial governance
IGN (2021): The COVID-19 pandemic in Spain. First wave: from the first cases to the end of June 2020
Monographs from the National Atlas of Spain. New content
Spain is a liberal democratic country with a very high level of political decentralisation. This decentralisation finds expression both in higher levels –Spain joined the European Union on 12 June 1985– and internally in lower levels –Spain is a composite state, made up of the national administration, the regions and the local authorities since 1992, when the process of political decentralisation was completed–. It is a model in which institutional mechanisms must be put in place in order to make effective the combination of self-government and shared government, which are the two pillars on which this agreement or foedus is based. These mechanisms shall smooth the way for two basic principles of good territorial governance, i.e. coordination and cooperation between the different levels of administration. However, the balance that may be drawn to date shows that significant progress has been made in the area of self-government, yet only little in the area of shared government. Although Spain is one of the most decentralised states in the European Union, there is a lack of internal territorial governance.
This decentralising process has modified the geography of political power over the last decades. The regions have exclusive powers on key areas, especially those related to the welfare state. The national administration is both the holder of other powers and responsible for implementing policies for providing social and territorial cohesion.
This composite state, called ‘autonomous state’ in the Spanish Constitution from 1978, has been subject to a profound and structural stress test on the occasion of the global pandemic that has made necessary to promote institutional coordination mechanisms, such as the Conference of Presidents (meetings between the national Prime Minister and the regional First Ministers) as well as the Sector Conferences (meetings between the national Ministers and the regional Councillors on the various political subjects). Both mechanisms already existed before the pandemic, but had remained close to dormant for decades. The Royal Decree on the state of alarm, the Order of the Ministry of Health on the health guidelines for the first wave of the pandemic and the coordination of the national administration with the regions so that the Downscaling Scheme could be adapted to the needs of the different territories all included the concept of ’co-governance’ or shared government.
The graphs on Evolution in the number of Conferences of Presidents and the Evolution in number of Health Sector Conferences show the scant relevance of these mechanisms prior to the pandemic, and highlight a relevant institutional and political deficit. These mechanisms did not have for decades the prominence that would have been necessary to provide good internal governance, as evidenced by the fact that more Conferences of Presidents were held in the few months that the first wave of the pandemic lasted than since this mechanism was founded back in October 2004. Moreover, the way these mechanisms are put into action is far from desirable, they have only had muted results, and the Spanish sharp political polarisation makes difficult to forge crucial agreements. Proof of this institutional deficit is that the Conference of Presidents ceased to convene short after the end of the first wave of the pandemic, in October 2020, whilst it should have continued to operate with the frequency required by the exceptional situation of the whole pandemic. By contrast, the Health Sector Conference, the Social Service Sector Conference as well as some other sector conferences have continued to operate regularly showing good results.
Governance initiatives at different levels throughout the first year of pandemic went above and beyond the amount of Conferences held and exceeded the powers of each level of administration. At times, contradictions, shortcomings, improvidence, disagreements and even bringing debates before the Courts of justice took place, following the trend of the rest of the European Union. The emergency situation explained much of this. Nevertheless, the four levels of administration (the European Union, the national administration, the regions and the local authorities) deployed on other occasions very important measures on different fields, such as health, education, social services, economy, finance and employment, with the shared aim of saving lives, launching economy by implementing recovery and reconstruction plans, providing ample liquidity to households and companies, and meeting the demands of the most vulnerable citizens.
Some lessons have been learned so far from how the pandemic was managed: a) it has tested the ‘autonomous state’, which has emerged stronger, using the instruments of internal governance as never before. A more polycentric, more horizontal, more decentralised Spain has taken root in the collective imagination, and all levels of administration have been seen to act as such; b) there are different ways of organising the public health service in each region, as highlighted by the map on Primary healthcare areas. However, this is compatible with sending aggregated information to the national administration; c) it has served to highlight the deficit in multilevel internal governance and the shortcomings in basic pillars of the welfare state. Nevertheless, serious issues caused by COVID-19 have been solved and collective learning has taken place; d) the importance of public services as a pillar of the welfare state and a basic responsibility of the regional authorities has been perceived by the population; e) it has opened a new stage of dialogue in drafting agreements and strategic alliances between different regions to address common issues and challenges that may entail relevant political symbolism as they are promoted bearing in mind the whole country; f) the agenda for the immediate future has been made clear, i.e. Spain shall improve the funding mechanisms for the welfare state so that territorial equity is provided and welfare standards may catch up with northern and central Europe, a regularity in celebrating the Conference of Presidents and the Sector Conferences shall be introduced, and founding a national Health Office would be praiseworthy.
Public spending by the regional administrations
The regional administrations had to cope under very challenging conditions with the social emergency caused by the pandemic. First, because levels of poverty and social exclusion stood amongst the highest in the European Union. Second, because public spending on social protection and health services stood 4.5 points below the EU average before the pandemic and had not yet caught up the levels observed before the double recession registered back in 2008-2013, when severe cuts were introduced. For example, Amnesty International pointed out that spending on public health fell from 70.7 billion euros in 2009 to 62.8 in 2018 (i.e. -11.21%), whilst the population over 65 years of age clearly increased in this period. Third, because the Spanish model of public services shows sharp differences between regions, as may be observed on the map on the Evolution of total public spending by the regional administrations, and are a consequence of a funding model of the regional administrations that happens to be unable to provide similar services in the different territories. It is therefore urgent to agree on a new funding mechanism for the regional administrations that may tackle social and economic problems that are likely to worsen over the coming years.
The pandemic severely strained the health system, the education system and the social services. However, a great effort was made by all administrations, especially by the departments dealing with social, health and educational issues. The national administration made a significant contribution by implementing furlough schemes to provide basic security for employees affected by lockdowns and company shutdowns. A 16 billion euro COVID-19 fund was also endorsed so that regions could finance the extraordinary expenses caused by the pandemic. This was a non-refundable fund, earmarked for health (9 billion), education (2 billion) and revenue shortfalls (5 billion). Despite the territorial differences, regions increased their budgets in 2021 and prioritised the three main social areas for which they are responsible, i.e. health, education and social services. All this was possible because the new fiscal rules with which the European Union tackled the pandemic were very different from the austerity imposed during the Great Recession from 2008-2013.
EVOLUTION OF PUBLIC SPENDING BY THE REGIONAL ADMINISTRATIONS
EVOLUTION OF PUBLIC SPENDING ON HEALTH BY THE REGIONAL ADMINISTRATIONS
EVOLUTION OF PUBLIC SPENDING ON SOCIAL PROTECTION BY THE REGIONAL ADMINISTRATIONS
National Minimum Subsistence Income, Regional Minimum Income and Active Insertion Income
Spain was one of the EU states with the highest levels of inequality, poverty and social exclusion before the pandemic. Different reports pointed out this structural issue: indicators barely registered changes for decades, worsened after the Great Recession from 2008-2013 that led to reducing social spending, and deteriorated even more during the first year of pandemic. Over 9.5 million people were living in relative poverty in 2019, half of them in severe poverty. Spain is the fourth state in the European Union with the highest rate of severe poverty. The economic production model favours low wages as well as a labour market with a high level of temporary and precarious work. Furthermore, public policies related to housing, family support and care for vulnerable groups are weak. All these factors explain this situation, which nevertheless shows significant differences between regions.
Long-term unemployment was not significantly reduced in 2019 compared to 2013 (see the chapter 15 on the Labour market). Levels of social exclusion marked a clear difference in welfare standards between the southern states of the European Union and those in Northern Europe (Greece, Italy and Spain stood in these indicators at the bottom of EU-15). Over 16% of the population in 11 out of 17 regions lived in moderate and severe exclusion, according to Oxfam. In addition, Spain was the state with the highest rate of early school leavers in the European Union (21.4%) at the end of 2019, according to the National Statistics Institute. The capacity to transfer income to the most vulnerable population groups was amongst the lowest in developed countries in 2018 (Matthew effect), according to the Organisation for Economic Co-operation and Development (OECD).
The social effects of the COVID-19 pandemic were immediately visible. It soon became clear that the various inclusion policies of the regional administrations were not enough to address the exceptional situation of households during the pandemic. The European Union had pointed out several times that the impact of the Regional Minimum Income policies in Spain barely exceeded 20% of potential beneficiaries and strongly differed from one region to another. In this context, there were two social protection initiatives promoted by the national administration in addition to the aforementioned 16 billion euro COVID-19 fund.
The first had to do with implementing a furlough policy. The approval of Royal Decree Law 8/2020, of 17 March, on extraordinary urgent measures to address the economic and social impact of COVID-19, as well as Royal Decree Law 18/2020, of 12 May, on social measures to protect employment, were aimed at minimising harm to the economy and to the labour market. These initiatives were very positive as a result of social dialogue and coordination with the regional administrations, and reduced uncertainty for companies and households in an emergency situation. Over 3.5 million employees were furloughed in April 2020, and almost 750,000 were still protected by this mechanism toward the end of the year.
The other main initiative of the national government was Royal Decree Law 20/2020, of 29 May, adopted by consensus at the National Parliament, which set a national Minimum Subsistence Income trying to promote social integration. In this case, a lack of coordination between administrations hindered the deployment of this policy. According to government estimates, this benefit could reach 850,000 households and over 2.3 million citizens; in particular, households with children. In fact, it was estimated that 30% of the 2.3 million potential beneficiaries were children. A higher incidence amongst single-parent households was also expected, which would account for 16% of beneficiaries, 90% of which would be led by a woman. From the perspective of the national government, this policy should have meant the eradication of extreme poverty, which would affect some 600,000 households and 1.6 million people. This policy would be compatible with wage income, included employment incentives, and set a wide variety of household types with incomes ranging from 5,538 to 12,184 euros per year.
The first balance on how the national Minimum Subsistence Income was implemented is shown on the different maps and graphs referring to the amount of Beneficiaries of the Minimum Subsistence Income and the applications processed from the start of the programme until March 2021. Two main conclusions may be drawn: beneficiaries are concentrated in the areas where poverty levels were highest and where the economic sectors were most affected by the pandemic; and the amount of beneficiaries barely reached a third of the 850,000 households expected (around 700,000 people out of 2.3 million to be reached).
In March 2021 (the date up to which the information on the graphs and maps is extended), the national administration made its own assessment: just over 870,000 applications had been processed out of the 1,150,000 received. 600,000 of these had been rejected, 210,000 had been approved and 62,000 were in the process of being corrected. In other words, approved applications accounted for only 25% of those processed. This Department also provided information on the profile of beneficiaries and identified two particularly vulnerable groups, i.e. women and minors. Households were made up of an average of 2.77 people and the average benefit for each household was 460 euros. Over 70% of beneficiaries were women, 43% of the people living in households benefiting from the national Minimum Subsistence Income were minors, and almost 70% of the households included at least one minor.
After assessing this measure as positive, all interim reports highlight major shortcomings and gaps, i.e. it is insufficient, it is not conditioned (by contrast, Regional Minimum Income policies are conditioned to beneficiaries taking part in labour or social inclusion measures), paperwork is too rigid (some potential beneficiaries were excluded due to some incompatibilities, for not meeting all requirements, for being ‘outside the system’ or for not knowing how to fill in forms) and there is a deficit in multilevel internal governance. This policy brings Spain closer to the social protection levels in northern European states, yet it is still far from being fully laid out. This explains why thousands of households with no income or in extremely difficult situations have continued to be assisted by charity and their members have queued up the so-called “hunger queues”. The latest reform to this policy, introduced by Royal Decree Law 3/2021, of 2 February, included the following text in the memorandum: “The period of implementation of this policy since it entered into force has made evident the need to improve some aspects of the regulation to enable covering the largest possible amount of people and to include situations that the current regulation does not take into account or does not operate in such a way as to allow some people to be correctly covered”. Maybe these changes together with some other adjustments might enable increasing the amount of beneficiaries gradually up to the 850,000 households initially envisaged. More attention should also be paid to ensuring that the regulation favours and reinforces social and labour insertion.
The most severe critics shall be made on the multilevel internal governance. The imbalances and the lack of coordination and cooperation between the three levels of administration involved (national government, regional administrations and local authorities) may lead to describing the management of this policy as a relative failure.
How the national regulation of this Minimum Subsistence Income fits in with the Regional Minimum Income policies raised dysfunctions from the outset. Firstly, because the national regulation sets a difference between the Basque Country (Euskadi/País Vasco) and Navarre (Navarra) and the rest of regions due to the different tax collection system of these two regions as well as to the attribution of powers by an agreement on the National Social Security Institute. This was seen by the other regions as an unequal treatment. Secondly, although the regulation also envisaged the possibility of promoting an agreement with the rest of regions and/or local authorities, the fact is that the national Minimum Subsistence Income began developing in parallel to the Regional Minimum Income policies of all regions except for these two (which were set decades ago). This postponed sine die the agreements between administrations. The national government argued that it had better information than the regions to implement these policies (e.g. data on personal income and Social Security), but did not consider the lack of employees of the national administration to deal with deploying this mechanism. Thirdly, it led to confusion amongst regional authorities, beneficiaries and potential beneficiaries. Finally, it filled social service departments in local councils that were already understaffed. This last aspect, which has perhaps received less attention than it should, is essential and explains to a large extent the failure in implementing a policy to all citizens that are subject to benefit from it. This is also stated by social services from municipal level as well as by regional Ombudsmen.
Overall, the lack of coordination and cooperation between the different levels of administration on shared powers led to the relative failure of a very good initiative. This situation may improve once the planned agreements between the national administration and the regions are concluded and the social services of the regional governments are provided with resources.
Finally, the maps and graphs referring to the Active Insertion Income show another interesting aspect. This is a non-contributory aid of 451 euros per month for people who have exhausted their unemployment benefit, may not access another subsidy and have difficulties in finding a job. This mechanism is targeted at particularly vulnerable groups of people, i.e. long-term unemployed over 45 years of age, women victims of gender-based violence, migrants returning to Spain over the age of 45 and unemployed with a disability equal to or greater than 33%. It shows the state of affairs of what could be considered the very last safety net, which affects over 5% of the total amount of unemployed entitled to benefits. The pandemic has shown that there is still a significant segment of the population outside this last safety net in Spain. This fact poses a challenge to the public authorities and to society in general.
Co-authorship of the text in Spanish: Juan Romero González. See the list of members engaged
Adaptation of the text and translation into English for this international version: Andrés Arístegui Cortijo (Translator in chief)
You can download the complete publication The COVID-19 pandemic in Spain. First wave: from the first cases to the end of June 2020 in Libros Digitales del ANE site.