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All Finnish municipalities are currently facing crucial issues. Demographic changes, structural changes in administration, business development and the sustainability gap in public finances require that the longer-term impacts of financial decisions be considered.
“In this brainstorming, everyone’s input is valuable. That is why Sitra has launched a new initiative inviting local residents to take part in the planning of municipal finances,” says Veera Heinonen, Director of Sitra’s Democracy and Participation theme.
“In representative and pluralistic citizens’ panels, opinions are formed on the basis of knowledge. This process can certainly be challenging but it also supports careful preparation by officials and thus wise representative democracy in the municipalities. They may even find new innovative ideas.”
On the basis of a call for funding applications, Sitra has selected the cities of Turku, Jyväskylä and Salo and the municipality of Rautalampi to carry out the experiments in 2024. Sitra is facilitating the partners’ experiments by funding them with a 50 per cent share.
Each partner appoints a randomly selected citizens’ panel, which receives orientation and gives opinions on key issues identified in municipal finances and makes recommendations at different stages of the budget process.
- In Turku, the citizens’ panel systematically reviews the balancing of finances from the perspective of children and young people. The panel will make its recommendations on the 2025 budget and operating plans to various committees and the City Council during their preparation.
- In Jyväskylä, the citizens’ panel reviews the impact of the financial balancing programme on the daily lives of residents and its distribution among different population groups. If needed, the panel will make recommendations to adjust the budget priorities.
- In Salo, the citizens’ panel focuses on evaluating the city’s operations, finances and investment needs. The panel will make recommendations on this year’s annual evaluation report, the next budget and the investment plan for 2026–2029.
- In Rautalampi,the citizens’ panel will review the situation of the municipally-owned rental housing company and the role of housing supply in the context of the municipality’s tight financial situation, and make recommendations to the municipality’s board regarding the development of rental housing.
The experiments will end in early 2025. Sitra is looking for experiences to see how citizen participation can help municipalities of different sizes address different issues of municipal finance. At the same time, it will identify approaches that can be integrated into the financial planning of all municipalities.
The pilot projects now being funded are a continuation of those funded by Sitra in 2023 in Kaarina, Merikarvia, Mäntyharju, and Pieksämäki. In these projects, the citizens’ panels made a number of recommendations to improve the efficiency of procurement, increase the utilisation rate of premises and monitor the implementation of the municipal strategy. At the same time, good lessons were learned about how to structure and visualise municipal financial information in a way that supports citizens – as well as decision-makers.
Sitra has also established a national development network to promote participation, practice, experimentation, and uptake of municipal financial planning.
The participation of municipal residents in municipal financial planning is based on the 2015 Municipalities Act and contributes to the principle of subsidiarity and municipal autonomy.
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