Consolidated Financial Statements of the RPA System in the Local Public Enterprises

The current debate on the real benefits of the New Public Management calls one of the elements which have characterized the strategy of Italy’s Public Administration into question. Such element is constituted by the... [ view full abstract ]

The current debate on the real benefits of the New Public Management calls one of the elements which have characterized the strategy of Italy’s Public Administration into question. Such element is constituted by the transfer of public services entrusted to private law entities featured with their own accounting autonomy, which have led to a massive enlargement of the local public enterprises (LPEs)  

The appearance of publicly-owned private law entities started spreading in the early 90s, fostered by the EU regulation, with the aim of decentralizing and outsourcing the provision of essential services to citizens. The establishment of a capillary and extensive territorial structure followed .

Subsequently, several strong requests from the society as a whole have accelerated a trend reversal in the LPEs’ proliferation, which were regarded as the biggest culprits of inefficient resource management and the PA’s “armed wing” in hindering competition, taking entire market sectors away from the private enterprise.

The need for bringing the whole of the LPEs back into well defined bounds made possible to thoroughly assess the actual efficiency and effectiveness in their administration. This has also been the reason why many regulatory provisions have been adopted with the aim of duly circumscribing the field of activity of those subjects.

Policy tools supporting expenditure governance, which concerns the shareholding system, constitute nowadays the bedrock of decisions based on objective elements: i) the measurement of the expenditure, ii) the knowledge of public finance channels through which it originates and then reaches the final provider; iii) the actual disbursement for the supply of services.

This research tries to shed some light on:

• The substitution effect measured in terms of expenditure carried out by both the PA and the LPE sector;
• The sectors affected the most by outsourcing;
• The territorial distribution of LPEs;
• The choices regarding the LPE governance and how they can be sustained by homogeneous, accurate, comparable data.

More generally, our aim is to observe the trend expenditure following the adoption of a number of regulatory provisions whose purpose was to streamline shareholdings owned by the local LPEs.

In order to quantitatively gauge the public intervention size at a regional level, the Regional Public Accounts (RPA) system methodology is used. Such a system aims at consolidating cash flows of all the PAs working on the ground and budgets of their enacted entities. This is achieved through an extremely articulated territorial network of data producers composed of a Central Technical Unit and 21 more Units set up in each of the 21 Italian NUTS2 regions.

The RPA system consolidates budgets of more than 3,900 LPEs, making up almost all of their expenditure. Under this system, the universe of LPEs is brought within a very articulated classification grid, which has a first tier composed of three macro-categories: i) Consortia and Membership forms, ii) Companies and Institutions; iii) Cooperatives and Owned Foundations. In their turn, these macro-categories are made up by several sub-types: thus their universe is split into homogeneous subsets.