03.03.2026
Amendment to the Act on Public Contracts threatens the services and regional vitality of small municipalities
The Regional Councils of Northern Finland have submitted an expert opinion to Parliament's Economic Committee on the Government's proposal to amend the Act on Public Procurement (HE 2/2026 vp). The unions are particularly concerned about the effects of the proposal675 on the municipalities of Northern Ostrobothnia, especially small and sparsely populated areas.
The opinion raises three main concerns. These are the 10 percent ownership requirement, the constitutionality of the bill, and an insufficient transitional period.
The Provinces of Northern Finland state that the minimum ownership requirement for affiliated entities in accordance with the proposal weakens the operating conditions of small municipalities. It causes significant financial and operational disadvantages for small and medium-sized municipalities. In Northern Ostrobothnia, many municipalities rely on in-house units for ICT, financial administration and catering services, for example. Small municipalities do not have sufficient resources to provide all support services themselves or to tender them out in the market in a cost-effective manner. This change could lead to higher prices of services, a lack of market-based supply and an increase in regional inequalities.
Concerns about the constitutionality of the bill also arise in the provinces. The Government's proposal may restrict the autonomy and property rights guaranteed by the municipal constitution. Municipalities have the right to decide on the way in which their services are organised in accordance with Article 121 of the Constitution. The Regional Councils of the Northern Provinces are of the opinion that the constitutionality of the proposal should be assessed by the Constitutional Law Committee.
The provincial authorities consider the proposed transitional period insufficient. If implemented, the proposal will require changes in company structures, reorganisation of contracts and possible property arrangements. The counties state that an orderly implementation would require a transition period of at least five years.
The Regional Councils of Northern Finland state that the bill places municipalities in an unequal position based on their size and location. From the point of view of Northern Ostrobothnia, it is essential that legislation secures the operating conditions of small municipalities, regional vitality and equal services for residents.
Additional information:
Hannu Takkula, Regional Director, Regional Council of Lapland, President of Regional Councils of Northern Finland, tel. 0400 203 300
Jussi Rämet, Regional Director, Regional Council of Northern Ostrobothnia, tel. 040 586 3877
