Press Release

Local Government vs. Central Government

Dr. Aliza Bloch | Flash 90

As part of the IDI Eli Hurvitz Conference on Economics and Society, a panel was held with the participation of the director general of the Ministry of the Interior, the chair of the Center for Local Government, and the heads of local authorities. The panel was chaired by IDI President Yohanan Plesner.

Haim Bivas, chair of the Federation of Local Authorities in Israel and mayor of Modiin-Maccabim-Reut: "There is a total disconnect between government and local government. Not only did they not understand the crisis, but they continued with their condescending attitudes; we do not need any officials or mechanisms – the coronavirus has proven it. Leave us alone."

MK Nir Barkat (Likud): "I am a big believer in decentralization; today the government is very centralized. Decentralization can bring about better results than today. With proper management, protecting people at high risk can create room to maneuver and leave both trade and education open. I want to see the government change direction. My perception is integrated in line with the "Israel grows" model. It relies on regional cooperation in the economic field, and it is therefore important to produce a middle level between local government and the economic government.

I see gaps that that are key to our success and that is in the micro-care for thousands of people who want to earn a good livelihood and tens of thousands of businesses that need assistance. The first gap is direct assistance to businesses that will not survive the crisis if they don’t receive aid. We must save them. We gave too little too late, giving businesses a sense that they were not part of the country. They should receive NIS 10–15 billion, which is a long-term investment. It will pay for itself with interest. The second gap relates to the unemployment pay model which, currently, does not encourage people to return to the cycle of employment but to remain idle. The money must be returned to the people who need it. We should return to the German model and encourage productivity. The third gap is the biggest omission – after the corona crisis, there will be over 100,000 unemployed who want to work but are not skilled and we need to prepare for large-scale training. To date, unfortunately, the exact opposite is happening. It is getting lost in a battle of egos between the Ministry of Welfare and the Ministry of Economy. We must transfer the responsibility to the businesses themselves and not leave it in the hands of the state."

Barkat added: "The government is paralyzed and needs to change direction – there is no choice. There are hundreds of thousands of people looking for a livelihood and an economic move must be initiated to regain public trust. Bennett’s and Saar’s increase in popularity is not because of them but because the government isn’t doing its job. If there is no change in the conduct of the government and if we don’t deal with the things that really matter, the Likud government is at real risk. Only if we focus and do the right things – and we are capable of doing that – can we continue to run the country."

Mordechai Cohen, director general of the Ministry of the Interior: "It is undisputed today that Israel is centralized and that this centralization is causing severe damage to the overall functioning of public systems. If the debate we are holding today had taken place 20 years ago, no one would have paid any attention, because local government was in a very deep crisis unable to pay for salaries and basic essential services. Since then, local government has repeatedly demonstrated its credibility, its execution capabilities, and its proximity to the public, and yet we are in a centralized system rife with bureaucracy, dysfunction, and other district divisions, thus producing a never-ending entanglement. The coronavirus has proved the importance of local government. Everyone agrees on decentralization – the question is what are the conditions. In the current reality, to decentralize in a "stupid" way with a list of powers will result in chaos because, first of all, local authorities are not one organization. Second, in many local authorities local democracy is a form of lip service. Third, there is the issue of the local authority’s economic soundness. It is thus inconceivable that we should run away from responsibility without handing over the necessary tools to deal with these same challenges. We must find a way to disperse powers without taking risks, because the transfer of power is a necessity of the day and it will happen in the end. It is important to produce a structural change that will enable regional thinking in Israel. But we can’t talk about decentralizing powers to 250 local authorities without distinguishing between them."

Haim Bivas, chair of the Federation of Local Authorities in Israel and mayor of Modiin-Maccabim-Reut: "There is a total disconnect between government and local government. Not only did they not understand the crisis, but they continued with their condescending attitudes. I know how to manage education better than anyone else. Leave us in peace. I shouldn’t have to go to any bureaucrat – they are the last to understand. The pandemic made it clear that we can manage this better than them. One must understand, there is nothing more controlled than local government, much more than the government. There are over seven mechanisms regulating us. We don’t have to run and get approval for everything; you can’t manage a crisis like that. We are praying for the Chanukah miracle – maybe they will pass a budget that has autonomy in education instead of going to another election. Government ministries need to deal with regulation and let us do our work. Management should be differential and budgeting should be the basis for that."

Amir Levy, CEO of IBC (Israel Broadband Company) and former director of the Ministry of Finance’s Budgets Department: "It is very difficult to sit in Jerusalem and decide where to put a road sign and expect that message will travel down between the local authorities and that it will not take 23 years. That makes no sense. There is no dilemma regarding the strong local authorities; the problem is the weaker local authorities and the gaps. We need a model that will connect Israel. We need to locate 'super-authorities' and let them lead. Imagine a 'super-authority' which believes in decision-making and will enable regional synchronization and provide assistance to weak local authorities. It will have the authority to build classrooms and make decisions and that is the direction we need to take. It all comes down to the fact that there are a lot of players in the field and each side will have to take steps that they do not like. If we take this brave move, all the cards must be on the table."

Dr. Aliza Bloch, mayor of Beit Shemesh: "I think the idea that senior bureaucrats sit in Jerusalem and know how to decide for me which streets and stations to close is fundamentally wrong. The fact that they have to approve every classroom I get is a form of management that has gone from the world and it is very constraining. We do not threaten go to the polls every two weeks. As head of the local authority, I have a different perspective on a town like Beit Shemesh with its endless challenges. Give me the money and I'll decide if I need public parks or not. You can’t have democracy only when it’s convenient. The idea that it is possible to make decisions in Jerusalem in all fields and have the people in the local authority work at this pace is intolerable and does not help the city. At the end of the day, the responsibility for the resident is mine. What is holding us back are the decisions in Jerusalem. I will decide if I want more bus lines, more classrooms in a particular place or not. This way of working is absurd."

Aiman Saif, head of the Ministry for Social Equality’s Authority for the Economic Development of Minorities and coronavirus project coordinator for the Arab sector: "I am in favor of transferring powers to local authorities. Our challenge is the need for economic resources to strengthen Arab local government, and that is what we have done in the last decade, but we are failing to make the necessary leap. On the issue of regional economic development, I, as a resident of Arara, cannot develop the town. We need to formulate a plan for the whole area and to develop a growth engine for the whole area. It’s better to move from the general government to the local level, and some of the powers need to move to the regional level. For example, on the issue of enforcement during the pandemic, there are things that need to be strengthened at the local and regional levels. The situation in which Arab society finds itself is due to a decades-long distorted government policy. There is a gap of close to NIS 20,000 per student between Jewish and Arab students. These imbalances need to be corrected."

The Eli Hurvitz Conference on Economy and Society – formerly the Caesarea Economic Policy Planning Forum – is widely recognized as Israel's most influential economic conference. For 27 years, the conference has served as a crossroads where public discourse and professional knowledge in economics and society meet, with the aim of improving decision-making processes in the administration and improving the quality of Israel's social and economic policy for the benefit of the entire public. The conference this year focuses on: macroeconomic policy in times of economic crisis; the labor market; the Israeli education system; governance in a time of crisis; strengthening the health system's readiness for crisis situations; and the relationship between local and central government. The conference is the apex of research and theoretical and practical research by working and thinking groups comprised of senior officials in the Ministry of Economy, Ministry of Labor, Ministry of Finance, the Prime Minister's Office, academics, IDI experts, civil society representatives, and other partners. Together, the teams led research and developed policy recommendations on issues closely related to the conference sessions, which will be presented during the conference, held online this year from December 14 to December 16.