THOSE MYTHICAL ADMINISTRATIVE SAVINGS .....

On 1 January 2007, the map of Denmark was redrawn. Before that date there had been 271 local authorities ("kommuner") and 14 regions ("amter"); after that date there were 98 kommuner and 5 regions. All of the bodies were, and still are, run by elected politicians.

In a country of only 5.5 million people, some of the former kommuner were quite small (in olden times, prior to the merger in 1970 of the 1,300 parishes into kommuner, they could be tiny). The former kommune where I live had about 5,000 people, 3,000 in the main town and the rest scattered in the countryside round about. The arrangement was very small-town and folksy. The kommune ran the one secondary school, the three junior village schools, and the old people's homes, and organised rubbish collection. The mayor doubled as a local estate agent, though he was paid a salary for his political work. Despite being a foreigner and recent immigrant, I personally knew three or four of the 13-man council, and a number of the officials. It was easy to get a tax rebate or a building permit sorted out. Yet unlike, say, in the U.K., the council also had the power to set income tax rates, and property taxes, so that the tax burden in Denmark can and does vary by a percentage point or two or three, depending on where you live. Somewhat paradoxically, this tended to dampen rows about taxation. "We are putting up taxes in order to renovate the school buildings" is easier to swallow if you can see that the buildings do indeed need renovating, and you can watch them being spruced up as you drive past. Overall, I thought that the system worked very well, at least away from the big cities. After all, it is not often that you can berate your local politician in the changing room after a game of badminton.

However, neighbourly service ran into the brick wall of the right-wing Government's desire to limit the size of the state, and stop any further rises in taxes. Small kommuner were "obviously" inefficient, and unsuited to the tasks of the modern world; attracting new businesses to the area, for instance. It was decided that the minimum size of a kommune should be 20,000 inhabitants, which was the previous average (7 of the 98 are in fact below that threshold, but they have special support arrangements with neighbouring kommuner). Bigger entities would in turn free up huge amounts of administrative savings, which could be used to improve the quality of local government services. And so our small kommune has merged with its five rural neighbours, into a body with about 40,000 inhabitants.

Almost three years on, what has been the effect? Service levels have definitely gone down. The various functions have been merged into one location, so the building permit office is now 20 miles away, as is the tax office. Potential new businesses are automatically shown to the areas next to the motorway at the northern edge; the kommune may now be better at competing with other kommuner, but there is a new tension within the kommune. The number of paid politicans has gone down; but each of them knows less about their electorates, and they have to drive around a much larger area in order to go to meetings. My former badminton partner rarely plays badminton these days.

Any what about those mythical administrative savings, the raison d'etre of the whole thing? It turns out that they were just that, a myth. Former tasks carried out by the regions (which now deal pretty much only with hospitals) were delegated down to the kommuner, which lacked the money and skills to carry them out; major road maintenance, for instance, or institutions for troubled children. IT-systems were sometimes incompatible. So not only have administration costs risen since 2006, but the number of administrative personnel, particularly heads of department, has actually increased. Both kommuner and amter are compensating by firing service personnel in order to remain within cash spending limits mandated by central government.

Virtually all European governments are facing pressures to cut the size of the state. I don't underestimate at all how difficult that will be. But when you hear a politician telling you that there are easy fixes to be had by "cutting waste", "administrative savings" and such like, remember to take the pitch with a huge pinch of salt. It will very rarely turn out to be true.

Walter Blotscher