“There is a lack of a common legal definition for ‘Publicly owned enterprises for every country”, according to Ms. Dupont, Policy Officer at the General Secretary of the Centre of Employers and Enterprises providing Public services (CEEP).
Ms. Pazanne Dupont, Policy officer at the General Secretary of the Centre of Employers and Enterprises providing Public services (CEEP), was one of the key-note speakers at the CCIC meeting in Genoa. Ms. Dupont presented CEEP’s expert review on Local Public Enterprises (LPE) in the European Union. She started by saying that there is a lack of a common legal definition for every country. The definition which is used by CEEP is:
A corporate entity with a general interest vocation and where at least 50% of the capital is held by one or several local governments, or less than 50% if these local governments retain in practice real control over the company’s activities.
The main activity areas where these enterprises currently thrive are: economic development; tourism; urban development and public infrastructure; water and energy production and supply networks; environmental protection; transport; and telecommunications.
There is a global growing trend on LPEs in general, although there are many different developments from country to country. The evolution of LPEs in a country is mainly based on the opening of capital. Overall, there are more LPEs in EU countries now, due to the benefits these can bring to the local community, like for example combining public and private funds, upgrading services, keeping control, etc. In countries like Germany, Denmark and the UK, the number of LPEs remains stable, and a decrease has been registered in countries such as Estonia, Latvia, Portugal and Lithuania. Shareholders other than local governments can be private, State, or other public or semi-public shareholders. In general there has not been established a specific local government level of participation by law, although there are some countries that have fixed ceilings or where there exists some threshold.
Depending on the historical background of a country, the development of LPEs is more or less recent. In countries that have been decentralised for many years, LPEs have been used extensively since the outset (Austria, Denmark, Finland, Germany, Sweden). Most other EU countries, which are decentralising now more and more (Czech Republic, Estonia, France, Italy, Latvia, Poland, Slovakia, Spain), see that the responsibilities of local governments are also increasing, creating a highly favourable context for local public companies.
An LPE is a means of adapting to the competition rules coming from EU and national level, while maintaining control over the provision of public services. This makes LPEs a tool for public policy while combining competitiveness and public interest.
There exist different forms of partnerships within LPEs: It can be a cooperation between local governments having shares in the same LPE, which has an effect of economy of scale, easing the inflow of public funds and ensuring better financing of major infrastructure. Another possibility of partnership is turning to private funding, which is currently a driving force, because it reduces the financial commitments of the authority. A third form of partnership is acquiring technical skills from working private partners, taking advantage of the professional skills and expertise of private shareholders in new activities and sectors. This opens fields of activity for the authority and enables it to work on quality and efficient services. This option is mostly applied in technical sectors.
LPEs usually focus on economic activities of general interest in the territorial area of the local authority that is shareholder. These enterprises promote local development through a balanced approach: effective economic performance aimed at serving local communities. LPEs are a driving force for innovation in territories, being able to adapt to economic and social changes, and they combine experience and practices at national and European level to improve the provision of essential services to citizens and businesses (and the related legal framework). LPEs are both supporters and actors of innovation. This is possible thanks to the strong (and regulated) links between the LPE and its local government shareholder.
Sometimes Local Public Enterprises are challenged by national or European law, because the specificities and challenges of LPEs are not understood properly by many EU institutions and other organisations. The role of CEEP is to improve the legal environment of the LPEs.
You can read more on CEEP’s activities at https://www.ceep.eu.