5 Key recommendations on local finances

October 10, 2016
Commission publications
Habitat 3, SDGs
(1.17 MB)

The adoption of a new urban agenda at the Habitat III summit
in Quito followed a long series of international negotiations.
During this an overall consensus was reached on the economic,
social, and environmental challenges that we face, as well as
the development goals the international community wishes to
achieve by 2030.

The effective implementation of public policies that allows
for the addressing of these issues implies a considerable
financial effort. Different studies carried out showed a need
to double, or even triple, the average amounts budgeted
for collective urban investments. Within a context where
the majority of investments are the responsibilities of local
governments, increasing their scale is necessary for substantial
reform of local financial systems.

Today, the overall structural imbalance between powers
granted to local authorities and their resources has serious
consequences on the quality of life for residents of cities
and territories. How can the necessary changes of scale be
implemented? What potentials can be developed? What are
the conditions under which local resources can be mobilized to
finance sustainable urbanisation?

United Cities and Local Governments, through its Committee
on Local Finance and Development, has maintained a
continuous debate among its members on the issue of local
finances. Along with the aid of a comprehensive study (see
Appendix p.14), a fair number of fundamental principles have
been identified on which the 5 key recommendations detailed
further in this document have been based.