The UCLG network and its key partners put the spotlight on the impacts of COVID-19 on local finance

With the spread of the COVID-19 virus in all world regions, a renewed attention has been given to the critical role of local and regional governments as first-line responders to the pandemic, while at the same time, shedding light on the many financial shortcomings they face in providing basic public services to their communities.

The seventh thematic Live Learning Experience, co-organised on 23^th of April by UCLG, UN-Habitat and Metropolis, in collaboration with FMDV and UNCDF, was devoted to assessing the impacts of the COVID-19 crisis on local and regional government finances, and the actions to be taken in response to the emergency and during the recovery period. Similar virtual sessions and webinars have been held by different parts of the network, either to cover specific regional challenges (see UCLG ASPAC webinar) or to build momentum and look at the aftermath from a multi-level governance perspective (see the virtual ministerial meeting co-organised by FMDV and the Moroccan Ministry of Cities). Likewise, the challenges brought about by the outbreak in terms of local finance and fiscal decentralisation and the policy priorities for local and regional governments in the aftermath were placed high on the agenda of networks such as DeLoG and UCLG working groups such as CIB at their respective annual meetings. Other networks, such as NALAS, provided a space for local and regional governments to exchange on the financial packages adopted by their respective national governments to tackle the COVID-19 crisis. 

A large number of publications and analyses have also been produced by different UCLG members and partners. In particular, UCLG Africa together with UN-Habitat, UNECA, UNCDF and Shelter Africa issued a report on the impacts of the crisis on African local and regional governments’ finance and policy recommendations to address them. A similar regional approach was developed in Europe with CEMR’s analysis and in Canada with FCM’s recommendations, each providing estimates on the impact of the crisis on local and regional governments’ finances and formulating specific recommendations.

Making a strong case that “local development finance is development finance”, a key UCLG partner such as UNCDF has also been very active in sharing information on actions being taken by local governments via a dedicated blog, series of podcasts (“Capital Locast”), and a guidance note to provide key recommendations for immediate response to COVID-19. Similarly, through several extensive publications, OECD also provided in-depth analysis on the multidimensional impacts of the crisis on cities and territories and its implications in terms of multilevel governance, subnational finance and investment.

The impacts of COVID-19 on local finance were also discussed at various sessions of the 2020 UN High Level Political Forum, highlighting more than ever the urgent need to empower local and regional governments with adequate resources if we are to ensure an effective recovery driven by local innvestment in sustainable infrastructure and services.