Proceedings of the Urban Seminar - Central Asian Cities in search of new ways of governance: The impact of COVID-19 and beyond

Proceedings of the Urban Seminar - Central Asian Cities in search of new ways of governance: The impact of COVID-19 and beyond

Developed by: Madina Junussova, Coordinator of the Academic Team and KPA Ambassador in Canada / Senior Research Fellow, Institute of Public Policy and Administration (IPPA), University of Central Asia, and CERGE-EI Foundation Teaching Fellow,
Saniya Soltybayeva, Research Fellow, Economic Research Institute, Ministry of National Economy of Kazakhstan,

Cite as: The Kazakhstan PhD Association [KPA] (2020). Central Asian Cities in search of new ways of governance: The impact of COVID-19 and beyond. Proceedings of the Urban Seminar. The Central Asian Research Forum on Sustainable Development and Innovation. March 17-18, 2020, Nur Sultan.

Sustainability of new territorial communities in the context of the COVID-19 coronavirus pandemic in Ukraine
Speaker: Pavlo Ostapenko, PhD in Geography, Founder and Chairman of the Ukrainian Researchers Society, a member of the permanent working group on decentralisation implementation in Ukraine of the parliamentary committee of the Verkhovna Rada of Ukraine on State Building, Local Governance, Regional and Urban Development, Advisor to the Prime Minister of Ukraine in 2019-2020

There were several attempts to introduce reforms in the country in 2007 and 2010. However, the real changes have started only from 2015 after the revolution, when the political vector changed. Indeed, there were four main principles inconsistent with The European Charter of Local Self-Government that required a new approach from Ukraine.

These principles were:
1) The principle of recognition of local governments’ own competence.
2) The principle of universality
3) The right to cooperation
4) The principle of capacity

The main reasons for starting the reform in 2015 were linked with:
· Change of functional capacities of administrative-territorial units;
· Change in administrative-territorial composition of Ukraine.

As a result, the administrative-territorial structure in Ukraine has been transformed in the period 2015-2020. The vast majority of territorial communities was amalgamated on voluntary basis, but from June 2020 the administrative stage of the amalgamation began. In the end, the territorial communities (city, township, village councils) were enlarged and their quantity decreased by 8 times: 11,250 territorial communities on the territory controlled by Ukraine was in 2014 became 1.469 territorial communities in 2020. These newly formed territories were given more authority and financial resources.

Challenges faced by communities during the first year after the amalgamation
Speaker: Anatolii Melnichuk, PhD in Geography, an Assistant Professor of the Kyiv University department of the Economic and Social Geography

The overview of these challenges is based on the Survey of territorial communities conducted by the Association of Amalgamated Territorial Communities in December 2020. 74 territorial communities (5%) from 21 regions of Ukraine took part in the survey: 33% are urban, 33% are settlements and 34% are rural territorial communities. The survey looked at the impact of measures to prevent the spread of COVID-19 in Ukraine on the local economy.

The results of this survey are as follows:
· the level of communication with people was relatively low. Indeed, 40% of the respondents indicated no communication of local self-governments with territorial communities on the implementation by the Government of a set of economic measures to reduce the tax burden on the economy and small and medium sized businesses. Only, 5% of the respondents had the opportunity to present and defend their own position on the measures implemented.
· the community leaders perceived the measures taken by the government generally positively. 67% of them believed that such measures will have minimal negative impact on the development of the local economy. However, 22% expressed concern that the losses of local self-government in the pandemic crisis may be due to the preservation of the interest of big business in Ukraine.
· Losses budgets of territorial communities in terms of non-accrual and non-payment (including land tax, rent for land plots of state and communal property, real estate tax other than land) during one month of 2020 (based on approved joint territorial communities budget indicators) were as follows. On average, one territorial community lost equivalent to 32,000 USD per month what accounted to about 30% of all the taxes which it could collect if the measures were not taken.
· Territorial communities spent from their local budget about 1600 USD up to 36,000 USD per month aimed at solving problems in preventing COVID-19, in addition to the expenditure from the central government.
· Territorial communities expressed support of some central government measures but not others. They disagree with the measures on exemptions from land tax, land rent and real estate tax, which brought the greatest losses to the local budget. At the same time, they demonstrated support of the economic measures, which were also introduced in other European countries, reducing value added tax and excise duties for large industrial enterprises. The introduction of the above measures lead to losses of local budgets of the surveyed communities up to 6% of the total revenues in the general fund of the community budget.
· Some territorial communities believe that external support is needed while a significant number of communities was convinced that the local business has a reserve of safety and can survive the lockdown period themselves. Another important point that many leaders of territorial communities stated is that there is no local economy within their territories. At the same time, 70% of territorial communities believe that the real support from central and regional governments for business and the municipal sector of the local economy to meet the challenge associated with the introduction of quarantine and economic measures was insufficient.
· In the absence of state support, territorial communities determine their overwhelming ability to provide landscaping support and garbage removal. However, the provision of services on transportation of patients and provision of medicine and personal protective equipment presented challenges for communities. The greatest concern for local government were challenges caused by rising unemployment and bankruptcy of enterprises where external support was needed most. It is worth mentioning that the biggest support of respondents in other European countries was given to such measures as interest-free loans for certain types of companies and one-off grants for small businesses.

Territorial communities were also asked to provide their own visions on measures to prevent the spread of COVID-19 and minimise negative effects on the local economy. They support the right to individually implement measures to support small and medium-sized businesses in a crisis, redistribution of personal income tax in favour of local government and health care, the introduction of mechanism to compensate for local budget losses from the implementation of measures to support small and medium-sized businesses.

The impact of COVID-19 on local government in the UK: main challenges and city responses
Speaker: Keith Thorpe, Local Economies Contingency Team, Cities and Local Growth Unit: Government’s Local Growth Team - a partnership between the Department of Energy and Industrial Strategy and the Ministry of Housing Communities and Local Government

The COVID-19 impact was the greatest in UK cities and largest towns, which account for 60% of economic outputs in UK and over 50% of the country’s population. The challenge the UK now faces is how to get central and local government to work together to rebuild the economies of UK cities and towns.

The COVID-19 pandemic has exacerbated economic and social inequalities between places and people in the UK, especially in large cities. There exist significant spatial economic disparities in the UK characterised by a North-South pattern, including a significant productivity gap. London’s productivity has consistently been over 30% above the UK average, while the South East’s productivity is only around 8% above the national average. Productivity in the North and Midlands, Northern Ireland and Wales are 8-17% below the UK average. Scotland’s productivity gap is narrower but remains 3.4% below the UK average. Moreover, regions have experienced markedly different growth rates.

Governments have a policy to reduce these inequalities through so-called “levelling up” and community investments. The most “at risk” places are those with high deprivation (income and health) and a low ability to work from home, including the most deprived areas of London and the South East. Working from home has driven dramatic changes in city centre footfall, especially in London and other large cities. City centre footfall has plummeted and is unlikely to improve until workers return to city centre offices.

The impact of changes will vary significantly for different types of places. London has seen a far slower recovery in footfall compared to the other UK cities, with many areas still over 60% below pre-COVID-19 levels. Manchester, Bristol, Leeds and Edinburgh, for example, also showed a slow recovery in retail footfall, with all still over 50% below pre-COVID-19 levels. The smaller cities have seen more return to pre-pandemic levels than London and other large cities. However, the strongest city centres like London will probably rebound the fastest and will continue to be resilient because of the concentration of knowledge workers.

A key challenge is how to support the immediate recovery of city centres and the tens of thousands of jobs in them as the economy opens again. City centre spending (resident and non-resident) in large UK cities has not recovered in the way that it has in some of the more suburban areas. Also, it’s very much switched to local centres in the suburbs, and away from the city centres.

Two kind of challenges that cities face:
1) Cyclical response: supporting the revival of city centre economies to reverse the impact of lockdown. Quick responses involve the removal of restrictions on people’s movement.
2) Structural challenges: the changing role of city centres as some changes in behaviour such as commuting, more shopping online, less socialising, will be permanent, although there is uncertainty around the scale of the shift.

The most impacted places in the short term are likely to recover in the medium to longer run. However, there are a lot of potential adjustments as the world will never be quite the same again. For example, places that have recovered faster in the short term are likely to return to a position of weak highstreets in the longer term, particularly if local business relocate to nearby denser city centres as a result of shifts in relative prices.
Physical adjustments in city centres may require a complete rethink. Public policies will need to address barriers to adjusting land uses of city premises. Firstly, current policies encourage more investment in city centre housing. We may have to rethink those policies. Secondly, the buildings that become vacant may be repurposed and we need to define what type of activity can occupy those buildings in the future. Then, finally, we may need to rebuild purpose-built buildings, such as some of the shopping centres that may no longer be attractive to people to visit, and give them new functions.

A lot of the business specific measures introduced by central government to mitigate the impact of COVID-19 on the economy have been distributed through cities and local authorities.

A range of national fiscal interventions have been introduced by central government at different times to mitigate the impact of COVID-19 on the economy. These include:
o People specific measures such as Universal Credit for the self-employed and the Coronavirus Job Retention Scheme. These measures delivered mainly by central government.
o Business specific measures such as Coronavirus Corporate Financing Facility and the Coronavirus Business Interruption Loan Scheme for small businesses together with one-off cash grants through the Small Business Grants Fund. A Restart Grants Fund for businesses in the hospitality, accommodation and leisure sectors and a Recovery Loan Scheme started recently. These measures are channelled mainly through local authorities as businesses pay local property tax called business rates and the local authorities have all of the contact information about these businesses so they’ve been able to get grants to smaller businesses and medium-sized businesses very quickly.
o Macro-economic measures including interest rate reductions, VAT reductions, the COVID Corporate Financial Facility for larger businesses, together with the Term Funding Scheme for small and medium size enterprises amongst other measures. These measures are usually delivered by central government. The crisis has highlighted the need for multi-level governance approaches and a shared responsibility between central and local government to tackle it.

Devolution and decentralisation agenda since 2010:
· In 2010, Local Enterprise Partnerships (LEPs) established. In 2012, City Deals agreed with 28 places across England.
· In 2014, Growth Deals totalling £9.1 billion agreed with all LEPs.
· In 2015, City Deals were extended into the Devolved Administrations (Wales, Scotland, Northern Ireland).
· Since 2017 directly elected city region mayors - or metro mayors - have been introduced across England to lead newly combined or created combined authorities.

These combined authorities were formed when two or more authorities come together and agree a bespoke devolution deal with central government permitting more powers to be devolved to the combined authority. Some combined authorities may involve up to ten local authorities covering the city region (e.g. Greater Manchester). There are currently eight city regions in England, plus Greater London which has had an elected mayor since 2000. Metro mayors have had a very high profile during the COVID-19 pandemic and they’ve been arguing for more powers and seat at the table where decisions are made. So, COVID-19 increased the pressure for more devolution and this pressure the government is taking very seriously.

COVID-19 and new trading arrangements with EU have exacerbated and changed the nature of the challenges affecting certain sectors, and therefore places. However, this hasn’t created totally new problems. The unemployment rate has increased, particularly in London and South-East England – the most prosperous areas – but they are likely to bounce back more quickly because of their strong economic resilience. Certain sectors of economy have been affected most severely, especially aerospace, consumer goods, aviation, hospitality, tourism – all of these have suffered greatly. COVID-19 has also significantly affected left-behind and coastal towns that were struggling even before the pandemic. So, it’s going to require strong governance to coordinate the recovery. Some cities have already developed recovery plans for their cities.

Short and medium-term policy responses by cities and local authorities to COVID-19 were introduced to complement the central government measures. Some of them are:
o social distancing – local government played an important role in communicating information on government restrictions during the lockdowns, trying to raise awareness of rules introduced such as closing cultural facilities and schools, and limiting gatherings.
o vulnerable groups – national government funds to accommodate homeless people in hotels have been given to local authorities to spend and have reduced homelessness considerably.

Some lessons from the UK experience in the fight against the COVID-19 pandemic include:
· strong coordination between cities, local authorities and national government was crucial.
· national government rolled out an ambitious recovery package to protect local economies and people, where cities and local authorities were key partners in delivering some of the measures.
· many cities have already developed or developing their own post-pandemic recovery, renewal and investment strategies for their cities.
· digitalisation, particularly, smart city tools, has played a crucial role and will remain a key component of a “new normal”.
· capability and capacity constraints (resources, skills and expertise) in cities and local authorities must be overcome if local places are to rise to the challenges they face and build a sustainable recovery.
· need for more devolution deals, place-based approaches and localised problem solutions.

Planning for the post-COVID new normal: trends and scenarios for cities in the UK
Speaker: Judith Ryser, Mentor of KPA UK, Senior Advisor of Fundacion Metropoli, a Life Member of International Society of City and Regional Planners (Isocarp), a Member of the Chartered Institute of Journalists

Planning is very sectoral, and it is not integrated. During the pandemic, it was looking separately at health, work, education, social care, etc. leaving people to the last as usual.
There are three scenarios:
1. Business as usual scenario – looking at current trends, it could be worse than usual;
2. Sustainability - very idealistic: integrated approach to secure more resilience to future pandemic, climate change and less social inequality;
3. Doable scenario – more pragmatic scenario, build on positive changes, which have occurred during experience with COVID, as not all impacts were negative.

Adjusting the built fabric is an open question, particularly, concerning prolonged homeworking and social distancing. At the same time, there is a great opportunity to redesign and revive the declining highstreets and town centres in the suburbs if people do not move s to city centres. It will require a new approach to a more multipurpose use of buildings. Hence, the whole urban fabric may become multi-polar and multi-modal.

In case of future pandemics, the cities need to think more about resilience, as social distancing may have to stay and change the urban fabric.
If there is more online shopping, it impacts on how the streets are used and pollution due to increased distribution and delivery of parcels. If there is more online learning, there is less pressure on student accommodation, but also less university income and footfall.

Adjusting mobility spaces during the pandemic providing temporarily cycle lanes and spaces on streets for hospitality. However, these measures are not acquired for the longer term, although they have worked during the short term. Whether the public realm or street space is going to be attributed differently between the private motor car, the cyclists, pedestrians, the commerce remains an open question. This provides a great opportunity for planning to approach the mobility issues in a different way, to shift more people to collective transports, to walking, cycling and car sharing, which are not used sufficiently at the moment.
Longer term COVID effects may not necessarily lead to lasting positive change.

In lieu of conclusions:
1. Physical adjustment of existing urban structures (especially high-density ones) to post-covid requirements remains unrealistic: no political will, no real strategies
2. Smaller scale localised interventions are possible. There are a lot of good examples, but it depends on how much energy and how much opportunity will be given to local communities to intervene and make positive contributions. They must be left to be self-organised and have their own thinking about what they want.
3. Small and medium size cities may be more adaptable, but they are also subject to nimbyism, which is very prominent in the UK, when people do not want other people to move where they are in low density areas in the suburbs and in small towns.
4. Adjustment to Covid-proof cities would be very long term. The built environment has a lot of inertia. It is extremely difficult to change densities, road spaces and so on.
5. Covid proofing (health security) is interdependent with economic recovery (sustainable growth), climate change adjustment and mitigation, and impact of technical innovation. This needs joined-up government action.
6. Local solutions for a better “new normal”: focus on fine tuning, small scale, with more protagonists but it may be only short lived or partial.
7. Structural long term solutions for covid resilient cities will need a lot of social and political will to happen.

Warning signals for intervention by planning include:
· “conventional wisdom” recipes;
· one size fits all solutions;
· recognising and dealing with inherent contradictions
· seeking out, examining and developing sustainable resilient alternatives and how to translate them into practicable measures.
· adopting alternative models of thinking, such as circular – regenerative economy, as well as vertical connectivity and interaction combined with horizontal cooperation and networking.

Questions and answers
1. Miscommunication with people was one of the main issues of all the social protests going on around the world which caused mistrust. People started to develop their own survival strategies that may not be good for the government as the government just wants everything in peace in this kind of pandemic. What kind of policies can be done in Ukraine to improve communication between the government and people?
Anatolyi Melnichuk answered: Some territorial communities supported the protests against the government measures against the COVID-19 pandemic. It impeded the realisation of the proposed measures. I was interested in the UK experience regarding communication with people. Ukraine needs to introduce new approaches in the context of decentralisation. There is also a need for digital solutions to improve communication and cooperation.
Pavlo Ostapenko added: Besides the ongoing decentralisation in Ukraine, the health system is also in transformation. Communication is always important, but we didn’t have such digital solutions. There was also lack of effective political solutions.

2. Question to Keith Thorpe: How you can help the local governments to work with people and how to increase this trust by means of communication between the local governments and the citizens?
The government probably should have introduced the lockdown restrictions earlier than it did. I think it was combined with a lack of preparedness for what was expected. Even the scientists didn’t recognise the potential effects from the spread of COVID-19. There is a need to be realistic and truthful to people. The government at the start was giving the impression that it would all be over within a matter three to four months. There will be a need to set up a permanent unit to cope with future pandemics. There is also a need for more dialogue and better use of social media. There will be a review of the lessons learned.

3. Question to Judith Ryser: What can be done from the advocacy groups (planners, active groups) together with the government?
First, I want to answer the issue of communication as it is interdependent and extremely important. The principle is that the one who has the power is going to tell the other one what to do and how to do it. At the same time, devolution usually involves responsibilities but not the corresponding resources and decision-making powers. It cannot be either bottom up or top down. For example, in London there is a group – an association of community actions – called “Just Space” which have done a lot from the bottom up but they also communicating and cooperating with at least two levels of government including the London wide level. They have made two contributions to the London Plan in 2016 and 2021.
Returning to devolution, resources, trust and decision-making powers need to evolve. Participation is just seen as free labour, free information, free knowledge. A lot of developers just sit on their land and wait until the land value and local conditions will improve. When this happens they pocket all the value added which has been generated by the activists through their temporary activities. They sometimes share value added with the government, but certainly not with those who created this value-added in the first place.
In my view, the next revision of the planning legislation needs to include a clause on some equitable reward and material share of this value added for the people who are creating it sometimes over years. If it changes (local communities getting the material reward), cooperation and communication will change fundamentally.

4. Question to Keith Thorpe: What are the key lessons learned after the pandemic on how you are going to be more effective in supporting the private sector to respond to future crises?
There is a recognition that trying to capture the value of land that goes up simply because developers are holding it as land bank and the government is concerned about this. It has been debated for a long time not only in the UK, but in USA and other places. Developers often do have to pay a contribution towards the cost of community infrastructure, but this is quite modest in relation to the increase in land value as a result of a development. There is a process of negotiation over private sector contributions but I think more could be done. One of the issues is that the national government’s Treasury Department hasn’t really allowed some of these land value capture proposals to come in, though they are interested in them. Government could also do more to incentivise private sector philanthropy particularly to help develop infrastructure, for example. However, it’s an ongoing issue.

5. From the experience of Ukraine, how do you think the management of assets improved since the decentralisation?
Delegation of assets and, to a lesser extent, financial decentralisation is seen as a panacea for better management of assets. Decentralisation gives the opportunity to local government and communities to decide what they need. However, the devolution is on-going so it’s too early to talk about the results. There is a need for a new kind of decision makers who will manage recently formed territorial communities.

6. What do you see the digitalisation coinciding with the new pandemic situation: where can it be dangerous and where should we be aware of this?
Keith Thorpe: Digitalisation is allowing more people to work from home and learn remotely. The big issue is the digital divide as not everyone has good access to the Internet and during the pandemic many school pupils could not access online classes because they don’t have a computer. There was a lot of movement: the government provided some money, but also much has been done through charitable fundraising to help poorer school children get laptop computers. However, remote learning cannot fully compensate for face-to-face learning. The other issue is access to high quality internet (the Wi-fi). The government is putting more money into this improving the quality of Wi-fi by helping private companies to ensure there are not what we call ‘not spots’ – parts of the country where people don’t have access to it, or connections are very slow.

Judith Ryser: Access to the internet is a public fundamental right of the 21st century like access to electricity and water. It’s a public duty to supply and provide the access to infrastructure and make it affordable as well. The government needs to cooperate with business to improve such infrastructure which is not sufficient at the moment even in developed countries and urban areas.

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