Focus: A Publicly owned company as an instrument for economic development in Sabadell (Spain)

A Publicly Owned Company aiming to foster, promote and facilitate all kind of actions which will generate employment and develop economic activity. In the city of Sabadell (Spain) it works!

Promoció Econòmica de Sabadell is a Local Company which is 100% owned by the Sabadell City Council. Its aim is to foster, promote and facilitate all kind of actions which will generate employment and/or develop economic activity in the city of Sabadell.
The Sabadell City Council has been developing these kinds of economic development activities since 1984, but it was not until 2004 that the municipal department became a limited society and officially took the brand name of “Vapor Llonch” (the name of the old mill which is nowadays the headquarters of Economic Development services). This Limited Society is run by a Manager and an Administrative Council where all the city parties are represented.
But what were the reasons to create this legal form which differs from the rest of the council? Mainly agility reasons when hiring and managing human resources as the collective bargaining agreement in the City Council does not differ between public servants and those workers which are subjected to specific actions/programs set by the regional, national or European institutions. The City Council remuneration scale and social benefits and conditions are incompatible with the rules of these specific programs, which focuses in promoting the employment and which are the main source of financing of Vapor Llonch.
In addition, there is slightly more agility when purchasing goods and contracting, even the local company is subjected to the public rules and controls and the budget is not limited (there is no need to have recognized credit in order to commit to carry out certain activities and programmes). Finally, there is no limit when realizing industrial, commercial or financial activities, a fact that eventually can help the service to be more sustainable. The future of the local economic development services in Spain is in doubt as on September the 6th 2012 the project of law regarding the rationalization and sustainability of local administration was published. This law seeks efficiency in the Local Administration and will remove activities which are considered not to be fundamental (as the economic promotion) if the municipalities are not in a good financial position. However, in the case of Sabadell, Vapor Llonch is developing different programs which proves that the economic promotion strategies must be reinforced at local level. New opportunities for people and businesses are arising from these services, which otherwise would be very difficult to identify from the Central State Government.