Material by the Agency for Legislative Initiatives for LB.ua.
Ukraine’s decentralisation reform began in 2014. Newly established communities received new powers and new sources of local budget revenue. Yet stronger financial capacity was not accompanied by a clear system of institutional change defining the distribution of functions and responsibilities. The law never established a clear boundary between the powers of the central authorities and those of communities, districts or regions. The new chain of authority built around temporary military administrations during the full-scale war has made the problem even more acute.
A law delimiting powers among levels of public governance was supposed to resolve the problem and clarify who is responsible for what. It has still not been adopted, although Ukraine was required to do so by the end of March 2026 under the Ukraine Facility.
Moreover, how clearly the state defines the responsibilities of different levels of government will determine not only the further development of decentralisation, but also whether Ukraine meets some of its EU integration commitments. The debate around draft law No. 14412 ‘On the Principles of Delimitation and Distribution of Powers among Levels of Public Governance’ is therefore no longer solely a domestic discussion about the architecture of government. With the opening of the first negotiating cluster, ‘Fundamentals’, the issue has become part of a broader task: aligning Ukrainian legislation with European standards and fulfilling the commitments that will accompany the accession negotiations.
From the centre to the citizen
The European system of local self-government is based on a simple principle: decisions should be taken as close to the individual as possible. In EU law, this is known as subsidiarity. The European Charter of Local Self-Government, for example, gives communities the discretion, within the law, to determine how they exercise their powers. Ukraine’s system of local self-government, despite its declared commitment to European principles, remains heavily shaped by centralised administrative practices and a blurred division of powers, which constrain communities’ capacity.
Draft law No. 14412 is intended to change this in part. It creates a framework for further reform by classifying powers and introducing rules for their distribution among the state, regions, districts and communities. A separate law, together with amendments to more than 150 existing laws and other legal acts, is expected to define the powers conclusively.
Draft law No. 14412 should bring the system closer to a model in which communities perform their functions without state interference while receiving funding both from the State Budget and from revenues generated through the exercise of their own powers. This includes, for example, building schools, hospitals and sports facilities. The change should improve the quality of public services and reduce conflicts between local self-government bodies and local executive authorities.
The cost of unclear rules
At first sight, draft law No. 14412 should resolve a problem left unaddressed for years by determining who is responsible for what within the system of public governance. In its current form, however, the draft law creates risks. Some provisions may expand the central authorities’ ability to influence how local self-government bodies exercise their powers and may jeopardise communities’ autonomy. This contradicts the logic of decentralisation, which involves transferring not only resources and responsibilities, but also the freedom and capacity to make decisions locally.
For example, draft law No. 14412 contains a proposal that is inconsistent with the Constitution: some powers of local self-government bodies would be defined by secondary legislation rather than by laws. This would allow the Government or other executive authorities to change the rules without going through the full parliamentary procedure. A community might, for example, introduce an innovation that falls within its formal powers. The Cabinet could then change the implementation procedure through secondary legislation, forcing the community to revise or postpone the decision. For residents, the result is straightforward: what was promised was not delivered or did not become operational on time.
The draft law also proposes allowing legislation to prescribe exactly how local self-government bodies must perform the powers and functions assigned to them. This would not only conflict with the European Charter of Local Self-Government, which grants communities autonomy in such matters, but would undermine the very essence of self-government. If a community is responsible for maintaining local roads, for example, it rather than the law should decide whether to establish a municipal enterprise, hire contractors or combine different approaches.
In addition, the draft law introduces ‘optional powers’ that executive authorities may ‘pass down’ to the executive bodies of local councils ‘on a contractual basis’. It is unclear who would be responsible for these tasks or how they would be financed. This is inconsistent with both the Constitution and Cabinet of Ministers Resolution No. 1748 and is generally alien to European law.
The draft law also provides for limited judicial review, meaning that communities would have little practical ability to protect themselves against interference by other public authorities. Some matters they currently decide—including permits, certificates and approvals, setting rates for local taxes and fees such as property tax, tourist tax and parking fees and granting exemptions—could therefore remain within their competence only formally, without any effective means of exercising those powers or defending them in court.
Decentralise or recentralise?
Adopting draft law No. 14412 in its current form could disrupt the balance among branches of government, create conflict between Parliament and the Government over the model of public governance, slow EU integration and eventually lead to the law being declared unconstitutional.
As Ukraine seeks to answer the question of who is responsible for what, the draft law intended to provide that answer risks leaving communities dependent on the centre once again. The new rules for distributing powers should not reproduce a post-communist centralised model but should reflect European practices. They should support a transition to a system in which communities are not passive implementers of central government decisions, but full participants in public governance within the limits established by law.
