Regions and cities press for fiscal flexibility to enable investment in social services in the most vulnerable regions

Local and regional leaders have called for a more flexible approach to fiscal rules to increase investment in essential social services in the poorest regions, reduce territorial inequalities and strengthen social cohesion in the Union. At the plenary session on 20 November, members of the European Committee of the Regions (CoR) stated that local authorities are crucial to guaranteeing equal access to these social services.

In the CoR opinion drafted by Declan McDonnell (IE/EA), member of Galway City Council, cities and regions emphasised that, while essential for reducing disparities and supporting vulnerable groups, local governments face severe challenges in improving social services, especially in vulnerable and remote areas of Europe. Financial constraints, lack of infrastructure, limited digital access, shortage of qualified staff and lack of affordable housing make it difficult to implement these services effectively.

CoR members proposed revising fiscal rules to stimulate social investment, excluding these investments in more vulnerable regions from the deficit procedure. An EU social taxonomy is needed to channel financial resources towards sustainable and socially beneficial investments to promote a more inclusive and cohesive Europe. They also emphasised the importance of transparency and accountability in EU funding, which should prioritise EU projects that guarantee social and environmental sustainability in all regions.

Local and regional leaders called for integrated models that coordinate essential services, such as health, housing and transport, to effectively serve remote and deprived communities and reduce regional disparities. They proposed the creation of a Europe-wide digital platform to ensure interoperability across member states, guaranteeing continuous access to social services.

The opinion stressed the need to invest in digital infrastructure and digital literacy programmes to reduce the divide and ensure equal access to essential services for all citizens, including the elderly and people with difficulties to utilise the digital infrastructure, especially in rural areas. It advocated widespread access to broadband, especially in remote areas.

Finally, cities and regions called for inclusive, affordable and quality housing policies for all. They asked for strict EU regulation of short-term rentals to protect local communities from displacement.

Rapporteur Declan MCDONNELL (IE/EA): "It is essential to ensure that all regions, especially disadvantaged and remote areas, have access to quality social services. Digitalisation offers incredible opportunities to bridge gaps, but we must ensure no one is left behind-be it the elderly, those without reliable broadband, or marginalised groups. Our aim is to create inclusive, cohesive communities where everyone can thrive."