Urban-Rural Linkages in Poland

Assessment and recommendations

For the last two decades, Poland has been one of the most dynamic economies in the European Union. Its sustained growth was disrupted by the COVID-19 pandemic but rebounded quickly and is set to reach 4.4% in 2022 and 1.8% in 2023 (vs. an OECD average of 2.7% and 1.6% in the same period). However, even before the pandemic, Poland was already facing important socio-economic challenges. The productivity of small and medium-sized enterprises (SMEs) and their workers remains low, the working-age population is shrinking, and environmental outcomes remain preoccupying. The war in Ukraine is also jeopardising the recovery from the pandemic and testing the limits of public services in Polish cities. As of 22 May 2022, Poland had received nearly 3.5 million refugees from Ukraine, i.e. more than all other neighbouring countries combined. Cities such as Warszawa, Łódź, Przemysl, Rzeszow and Kraków have absorbed particularly large numbers of refugees.

If Poland is to emerge stronger from these difficult times, all its territories need to fulfil their potential to contribute to national development. From food production to job creation and social services for refugees, partnerships between urban and rural areas are more relevant than ever to sustain growth and well-being at this pivotal time. This report shows that the development of urban and rural areas is intertwined, calling for win-win partnerships and complementary national urban and rural policies that leverage the respective strengths of urban and rural areas.

A note of caution

The findings presented in this report present some limitations. First, the methodology focuses heavily on FUAs, which are home to almost 56% of Poland’s population, and their catchment areas. Further analysis of municipalities outside FUAs may be valuable. Second, due to data constraints, the quantitative analysis of urban-rural linkages has focused on commuting flows, which constitute a good proxy of functional relationships but fail to capture other types of linkages between urban and rural areas (e.g. trade, social or environmental linkages). Third, the data used for analysing commuting flows, which come from official statistics, might underestimate the phenomenon. Finally, the issue of the quality of services across urban and rural areas, beyond their accessibility, deserves deeper attention. In general, collecting and analysing more granular data along a broader range of dimensions would provide a more complete picture of urban-rural linkages and their impacts on territorial well-being.

Territorial trends and urban-rural linkages in Poland

Poland is less urbanised than the OECD average...

According to the Degree of Urbanisation – a methodology that allows for international statistical comparisons – the vast majority of the population in Poland lives outside of cities. A large share of people lives in rural areas (40% vs. the OECD average of 24%) and in semi-dense areas like towns and suburbs (33% vs. the OECD average of 26%), whereas cities host only 27% of the population (vs. the OECD average of 50%). When using the Functional Urban Area (FUA) methodology, 56% of Poland’s population (i.e. 21.2 million) lives in cities and their surrounding commuting zones, forming 58 functional urban areas (FUAs), while the OECD average is 66%.

Polish FUAs have a strong rural component. More than three-quarters of municipalities within FUAs are classified as “rural” according to the Degree of Urbanisation. As of 2019, 37% of people in FUAs lived in municipalities that are classified as “towns and semi-dense areas” (15%) or “rural areas” (22%). This could create potential challenges for rural areas in terms of public service provision and accessibility as they tend to be more dispersed than urban areas. Stronger co-operation among municipalities within FUAs could help them make the most of agglomeration economies. Outside FUAs, towns and semi-dense areas have the potential to serve as focal points for rural development, as they host almost half of the population not living in FUAs.

...and shows patterns of suburbanisation, which result from historical factors and land use choices

Poland has been experiencing suburbanisation for more than two decades. Polish FUAs are quite suburbanised, as 43% of the FUA population lives in commuting zones (vs. 25% of the FUA population in other OECD countries). Between 1990 and 2015, population dropped by 8.6% in cities, while semi-dense areas grew by 5.2% and rural areas by 5.4%. One of the main factors is the shortage of high-quality, affordable housing in the urban cores. Large amounts of farmland were freed up for housing development., As incomes nearly tripled over 25 years (from USD 2 000 per capita in 1996 to USD 5 900 in 2020), access to credit improved, car ownership increased, and people moved out of cities in search of family homes and higher living standards.

Labour market linkages reveal a high amount of urban-rural interaction, but small and medium-sized FUAs are less attractive

Although residents are dispersed along the urban-rural continuum, job opportunities are still mainly found in urban areas. Two-thirds of total commuting flows in Poland are directed towards FUAs. In addition, in some (large) FUAs, there is a high level of diffusion of employment, also involving peri-urban and rural municipalities in commuting zones. This suggests that, in many FUAs, municipalities in suburban and rural areas are not only residential areas, but also host jobs and consequently attract commuters. This may indicate that urban-rural linkages are at work within FUAs, and calls for dedicated policies to tackle pressures on land uses and resources, as well as on sustainable transport.

While most large FUAs attract commuters, many small and medium-sized FUAs show a negative commuting balance, indicating low employment opportunities. This result is compounded with the fact that there are 139 medium-sized cities across Poland that are said to “lose their socio-economic functions” according to the Polish government’s classification, i.e. have shrinking population and limited infrastructure investments, among other challenges. Most of them are located outside FUAs, indicating that isolation from large urban centres amplifies their economic and social fragility. Reinforcing urban-rural linkages between small and medium-sized cities and their surrounding rural areas could help increase their attractiveness by strengthening the local markets they serve.

In addition, as of 2020, 9.2 million people lived in FUA catchment areas, which are clusters of (mainly rural) municipalities with a high degree of commuting towards FUAs. This means that people living in catchment areas can “borrow” the amenities and opportunities of urban areas. However, catchment areas may lack their own job opportunities and a good level of accessibility and quality of services. Therefore, dedicated policies are needed to strengthen urban-rural linkages both within FUAs and at a broader spatial scale, for example in terms of infrastructure and connectivity in rural municipalities outside FUAs.

Before the war in Ukraine, Poland had a shrinking and ageing population

Between 2010 and 2020, Poland’s population declined by 0.4% (vs. the OECD average growth by 5.8%) and it is expected to shrink by another 14.4% by 2060. Across OECD countries, only Greece, Korea, Japan, Lithuania and Latvia are projected to experience a faster population decline. In addition, while a few large urban areas are growing, three out of four FUAs in Poland are losing residents. Almost every mid- and small- sized FUA in Poland has lost residents over the last decade. While population in suburban areas and rural areas close to cities is increasing, rural areas far away from cities show a marked decline.

The Polish population is also ageing, especially in core cities, while suburban areas show a younger age structure. Unlike the typical pattern in OECD countries, within its FUAs, Poland has the largest share of elderly in urban cores (22%, compared with 16% in commuting zones). This will lead to changing needs for public services and call for a co-ordinated provision among urban and rural areas. Different age structures require different services along the urban-rural continuum. In the suburbs, a generally younger population means a larger share commuting for education, work and leisure. This demographic trend will also affect Poland’s labour supply as well as the capacity to finance and provide public services.

War refugees have increased population levels but the duration of their stay is uncertain

Finally, urban and rural areas in Poland and their relationships will be also affected by the war in Ukraine, which has led to a massive influx of refugees to the country. Between February and May 2022, more than 3.5 million refugees entered Poland. About half the refugees are adult women, and 35% of refugees are under 18 years of age. Most of the refugees were hosted by Poland’s largest cities, such as Warszawa and Kraków, which have seen an increase in their population by 17% and 20% respectively, along with strong pressure on their public services. More effective urban-rural linkages could help share the responsibility of delivering services for refugees across the country and, at the same time, provide opportunities for smaller cities, towns and rural areas.

Poland displays a large urban-rural divide in accessibility to services

In general, Poland offers a good degree of accessibility – defined as the capacity of people to not only move around efficiently, but also access the resources, services and opportunities they need to thrive. However, Poland shows a marked urban-rural divide in accessibility. For instance, some key supra-local services are concentrated in large cities, and public transport outside FUAs is very limited, constraining accessibility from remote rural areas.The quality of services is also not always the same in urban and rural areas. Proximity to a large city, all other things being equal, is associated with better access to services and more opportunities (e.g. jobs, education, leisure). Developing stronger relationships between urban and rural areas could help bridge accessibility gaps.

Increasing digitalisation can create new urban-rural linkages regardless of territorial proximity

The full potential of digital technologies in Poland remains untapped and their benefits are not equally shared across the country. Between 2019 and 2021, peak download speeds improved by 86% across Poland, but at the same time it is characterised by a urban-rural gap. Fixed download peak speed in cities is 40% faster than the national average, while in rural areas it is 40% lower than the national average. This hinders the attractiveness of some territories, especially the most remote areas, for remote working or business development. Urban-rural partnerships could help tackle the digital divide, and digital connectivity could, in turn, help foster stronger urban-rural linkages. For example, it could support the growth of local small and medium-sized enterprises (SMEs), and allow citizens to access services in other municipalities and participate more effectively in policy making. Digital connectivity offers a particularly relevant tool to support growth in cities “losing their socio-economic functions”, as they are isolated from FUAs.

Building urban-rural partnerships

Poland’s policy frameworks offer a good basis for urban-rural partnerships

Urban-rural partnerships in Poland are a relatively new phenomenon. For almost a decade, Poland has been supporting the formation of urban-rural partnerships as a way to enhance territorial cohesion and help both urban and rural areas to become more competitive. The main factors motivating local governments to build urban-rural partnerships include inequalities, the lack of public transport connectivity and housing, the lack of economies of scale, and limited financial and capacity to deliver public services. The polycentric structure of Poland offers a good terrain for the creation of urban-rural partnerships, understood as the highest level of urban-rural co-operation, and represents an opportunity to increase national well-being and socio-economic development.

At national level, Poland’s development policy framework promotes urban-rural partnerships, albeit indirectly. Poland’s main national development policies (e.g. the Strategy for Responsible Development (SRD); the National Regional Development Strategy (NRDS) 2030; the National Urban Policy 2023; and the Strategy for Sustainable Development of Rural Areas, Agriculture and Fisheries 2030) recognise local co-operation as a necessary mechanism to implement and achieve national development objectives. However, the proposed new National Urban Policy (NUP) 2030 also acknowledges that the lack of co-operation among local governments within FUAs is hindering the ability to deal effectively with territorial development issues.

At regional level, regional development strategies (RDS) have a role in designating strategic priorities, improving the competencies of local self-governments, and supporting initiatives and projects to exchange good practices in building partnership agreements.

Several mechanisms for urban-rural co-operation are in place

Poland has a comprehensive regulatory and planning framework that provides a basis for strengthening urban-rural linkages and building partnerships. Local government units have a right to form and join associations with other government units. The Act on Municipal Self-Government defines three mechanisms for co-operation. First, municipalities (gminas) may form associations with other municipalities, counties (powiats) or regions (voivodeships) to help cover costs for service delivery and assist one another. Second, they can also sign inter-municipal agreements to have another municipality deliver one or more services on their behalf, such as public transport or waste collection. Third, they can form municipal unions, which are legal entities with specific duties, duration and rules. In addition, Polish municipal authorities are encouraged not only to co-operate with one another, but also to find partners at other levels of government, social actors (associations, non-governmental organisations), academia (universities, think tanks), businesses and business associations, community groups and individual citizens.

Poland has established various institutional structures to encourage urban-rural partnerships, such as FUA offices, regional governments and regional organisations such as Regional Tourism Organisations (RTOs), Regional Territorial Forums and Regional Territorial Observatories. These institutions have the capacity to provide strategic advice, disseminate information and help overcome obstacles coming from institutional differences between urban and rural municipalities. Urban-rural partnerships benefit from a clear distribution of roles (e.g. a core city supporting administrative tasks of other municipalities) and a balanced voice among large and small municipalities to enhance trust. Evidence shows that the involvement of non-governmental organisations and the private sector as members of partnerships (e.g. in water management, social assistance) or as leaders (e.g. food value chain, associations of local firms) has kept partnerships stable despite political cycles and contributed to sustainable co-operation.

Local and regional development planning is a major opportunity for co-operation

Local governments in Poland have significant legal and management autonomy to craft their own development strategies and plans, and can choose to do so in a co-operative manner. In July 2020, Poland’s Parliament passed several amendments to the Act on Principles of Implementation of Development Policy, which introduced a new scheme of social, economic and spatial planning for local development. The goal of the reform was to strengthen the creation, implementation and monitoring of local strategies and to promote collaboration across levels of government.

An important reform introduced was the creation of territorial agreements that enable local governments to come together to specify priority projects for the development of a given area, in line with the objectives of a development strategy. Municipalities can sign territorial agreements with the region or the national government.

Another key element of the reform was the introduction of supra-local development strategies. For now, they are optional, but the Act highlights their value, and efforts are underway to make them compulsory. Supra-local development strategies enable urban and rural municipalities to jointly adopt a functional approach to planning. They include a model of the functional and spatial structure, which illustrates the lines for action set out in the strategy, as well as findings and recommendations on the development and implementation of spatial policy in each municipality. To prepare and implement a supra-local development strategy, municipalities may form an inter-municipal union or association, or adopt an inter-municipal agreement. Many local governments have expressed interest in pursuing this option. In December 2021, the Krakow Metropolitan Association (Metropolia Krakowska), approved Poland’s first supra-local development strategy to 2030.

The use of EU funds has been pivotal to promote inter-municipal co-operation and start urban-rural partnerships

EU Cohesion policy has been the key framework through which Poland has been addressing territorial development challenges to unleash the potential of regions and localities for national development. In its 2014-20 Partnership Agreement (PA), Poland indicated functional urban areas (FUAs) as the main target of its territorial development strategy, which was mainly implemented through the Integrated Territorial Investments (ITI) instrument, made compulsory in voivodeship (regional) capital cities. The 2021-27 Cohesion Policy framework enables a more sophisticated approach for addressing urban-rural interlinked development through policy mixes customised to targeted territories. It gives wider support to the development of local growth strategies by urban, rural or other territorial authorities, which can now be fully in charge of or involved in the selection of EU-funded projects. Accordingly, the new Partnership Agreement for Poland provides for a larger utilisation of ITIs and the strengthening of “Community-Led Local Development” (CLLD), which envisages the design of local growth strategies by action groups (LAGs) engaging local authorities, civil society and business partners.

The use of these EU territorial development instruments has been central to Poland’s territorial strategy. Almost half (47.6%) of Poland’s population has benefited from ITIs, and CLLD have been applied in 90% of the Polish area eligible for support. One of the main strengths of ITIs is that they can be used in any geographical area, ranging from urban neighbourhoods with multiple types of deprivation to the urban, metropolitan, urban-rural, sub-regional, or inter-regional levels. CLLD has also been seminal in the implementation of territorial development strategies and in fostering inter-municipal co-operation in Poland, even if it has been used with a more limited scope in respect to developing urban-rural partnerships. Overall, despite a very good performance of Poland in capitalising on EU funds, the complexity of the procedures to use EU Cohesion policy instruments and, in some cases, the lack of a strategic vision shared between territories have limited the capacity of local authorities to take full advantage of EU instruments.

Existing urban-rural partnerships aim to foster growth and competitiveness

Polish local governments have already developed urban-rural partnerships in Functional Urban Areas (FUAs) to find common solutions to mutual problems and share expertise, services and resources in different domains (e.g. economic, social and environmental).

Urban-rural partnerships have been established to develop and manage transport networks and infrastructure

• Public transport is the most frequent policy area of co-operation within FUAs in Poland, as it is a pre-condition to access other services and foster urban-rural synergies. Local governments have used different mechanisms to establish partnerships in transport, such as bilateral agreements between the core municipalities and the surrounding ones (e.g. Lublin, Warsaw, Jelenia Góra and Bydgoszcz) or municipal associations to revitalise the public transport system (e.g. Oławskie Przewozy Gminno- Powiatowe in Wroclaw FUA). In general, the core city in the FUA becomes the co-ordinating actor by taking a leadership role in the organisation and management of public transport infrastructure in the FUA. The partnerships aim to give smaller municipalities the possibility to access transport services they would otherwise not be able to provide due to funding and capacity limitations.

Urban-rural partnerships have been established to improve the business environment

• Some FUAs such as Wroclaw and Bydgoszcz have created agencies to co-ordinate their actions with those of surrounding municipalities to promote business support services available in the area. Other FUAs such as Grudziadz are promoting the creation of privately run business associations that gather local firms and improve networking activities. Innovation support bodies (business accelerators and public and private innovation/research centres) tend to locate in cities, due to the agglomeration of firms and the location of other administrative centres. Improving the regional attractiveness for new businesses is a common goal that often triggers co-operation among urban and rural municipalities.

Urban-rural partnerships have also been established to promote tourism

• Urban-rural partnerships in the tourism industry aim to co-ordinate the local tourism offer, including accommodation and transport for touristic circuits across administrative borders or the inter-municipal management of parks and natural attractions. The Jelenia Gora agglomeration, for example, created a partnership among 18 urban and rural communes for the promotion of tourism based on their natural assets. Although the war in Ukraine has created considerable short-term uncertainty for the sector, especially in countries close to the conflict, urban-rural partnerships for tourism can be a major driver of growth considering that as of 2018, the total value of the tourism economy was estimated to reach 6% to Poland’s GDP (direct and indirect impact).

Urban-rural partnerships for food chains have commonly been organised by social economy actors

• Different types of urban-rural linkages exist around food value chains and can be mobilised to ensure food security and unlock new business opportunities in rural areas: e.g. food co-operatives and buying groups (e.g. Warsaw-Warsaw Consumer Cooperative, Kraków - Opole, Zielona Góra); local farmers’ markets (e.g. the Free Toruń Marketplace, in the Toruń metropolitan area); and food bank associations (e.g. the Association of the Food Bank “Grudziądzki Bank Żywności” in the FUA of Grudziadz). However, obstacles such as physical distance among farmers and the lack of trust around aligning qualities and certificates may undermine collaboration among farmers to reach manufacturing providers and consumers in urban settings with a unified voice.

Urban-rural partnerships can help reorganise social services delivery in the context of shrinking population

• Ensuring access to social services (e.g. social care, healthcare, and education) for all people in the context of depopulation calls for partnerships among municipalities to reduce operational costs, while improving coverage and quality. For example, the Grudziądz FUA has introduced a nursing homes programme, and the Bydgoszcz FUA implemented a metropolitan senior card programme. However, municipalities outside large FUAs are facing greater challenges in service provision.

Urban-rural partnerships have been formed to accelerate the digital transition

• Partnerships to improve the deployment of e-services, including e-government services, have been created with Integrated Territorial Investments (ITI). For example, the Jelenia Góra Agglomeration has implemented a project to strengthen municipal capacity to deliver public e-services by improving accessibility to information and communication technologies, including in the three urban-rural municipalities in the agglomeration. However, the challenge for Poland is to accelerate digitalisation to provide equal quality services to all residents. Greater uptake and adoption of new technologies to deliver healthcare (telemedicine) or elderly care (e.g. medical drones or primary care robots) requires putting in place an enabling infrastructure, such as high quality screens and imaging devices among others.

Urban-rural partnerships can enhance better water and waste management

• Inter-municipal companies are the backbone of urban-rural partnerships on water management in Poland. In general, municipalities co-ordinate their water management through the establishment of a dedicated inter-municipal company. Inter-municipal associations or unions have been formed to finance such companies (e.g. the Union of the Upper Raba River Basin, comprising 15 urban and rural municipalities, with Kraków as the urban core). However, such partnerships face some difficulties, such as the perception of unfair distribution of territorial investment for water management that could make the collective agreements fail. Decisions to unify tariffs can be a cause of conflict among municipalities, as some of them (particularly the urban ones) might feel that they would subsidise other municipalities or lose municipal autonomy in investment and quality decisions.

• Most of the partnerships on waste collection are conducted through bilateral agreements (e.g. the incineration plant in the Bydgoszcz FUA). The urban core municipality often provides waste management services and receives a fee from surrounding rural ones.

Barriers to urban-rural co-operation

Lack of trust among municipalities hinders co-operation

Local governments, especially within FUAs, seem to be generally aware of the importance of collaborating with neighbouring municipalities and they are taking steps to do so. However, competition, lack of trust and historical rivalries among municipalities are still hindering stronger and more effective co-operation. There is also a lack of trust among members of local action groups (LAGs) that aim to implement development projects in rural communities. Trust in government institutions in Poland is relatively low compared with other OECD countries. This has important implications for inter-municipal co-operation and for participation in programmes such as LEADER. Co-operation among local governments takes place on a voluntary basis, which means that building trust is instrumental to success. Municipalities in the Grudziądz functional area, for example, have noted that to make an association work, there is a need to create a sense of safety and security to reassure smaller municipalities that their voice will be heard and that the priorities of the larger municipalities will not eclipse theirs.

Spatial planning is too fragmented and has low coverage

Poland’s spatial planning system lacks tools for co-ordinating land use changes in suburban areas, which partly explains disorderly urban growth. Local Spatial Development Plans, which steer spatial development within the borders of municipalities, are the only binding land-use plans in Poland. The current legal framework allows municipalities to co-design and adopt a spatial development policy at a functional level. However, a significant challenge to foster urban-rural partnerships comes from low coverage of local spatial plans and the reliance on one-off planning decisions for an individual building or change of land use requests. In 2020, the share of the area covered by local spatial management plans amounted to only 46.5% in large cities, and even lower at 25.7% in marginalised municipalities. Currently planned reforms include the obligation to prepare a local spatial development plan that covers the entire municipal territory. Even when the plans are elaborated, they are often poorly co-ordinated (e.g. few agglomerations have developed co-plans or synthesis documents for their whole functional areas, the Poznań FUA being one of the few exceptions). A possible reason for municipalities struggling to prepare these plans is that they are time-consuming and cost-intensive.

Metropolitan governance remains underdeveloped

Poland does not have independent metropolitan administrative units. Metropolitan areas usually consist of the core city and a large number of smaller municipalities (rural, urban, and urban-rural) in the surroundings, but their boundaries have not been defined. Although Poland has been working on metropolitan reforms for two decades, it lacks flexible legal structures for co-operation in metropolitan areas. In 2003, the Spatial Planning and Development Act recognised metropolitan areas, but without a clear statutory delimitation. After various attempted proposals and years of discussion, in 2015, Poland passed the Metropolitan Union Act, which entered into force on 1 January 2016 but has yet to be implemented, due to a lack of appropriate regulations. In 2017, regulations were approved only for the Górnośląsko-Zagłębiowska Metropolia, with Katowice as its capital city, with unique provisions for its functioning and financing. Its income comes from a share of the personal income taxes paid by the metropolis’ residents, as well as membership fees paid by municipalities. The metropolitan union also receives a direct allocation from the central budget, separate from EU funds. No other metropolitan area in Poland has a statutory status nor has been granted the same rights and benefits, although there are other metropolitan areas that could benefit from them.

Poland’s lack of a metropolitan law and its settlement structure with its specific hierarchy of cities (e.g. cities vs. cities with powiat status) constitute a barrier to the establishment of a voluntary, bottom-up and equitable metropolitan structure. The majority of metropolitan declarations in Poland are not legally binding documents, but they can be considered as the beginning of a movement towards more formalised political models. For example, the Gdańsk-Gdynia-Sopot Metropolitan Association, one of the most successful examples of metropolitan co-operation in Poland, has been lobbying for several years to become a metropolitan union.

Local public workforce limitations constrain co-operation and joint work

In general, local governments in Poland lack the necessary level of technical skills such as knowledge of legislative provisions that would be necessary to enhance urban-rural co-operation. Increasingly, public services are prioritising transversal skillsets and competencies that are even harder to assess, such as risk-taking, capacity to innovate and problem-solving, which are often not available in the local public workforce. Working conditions, low salaries, the nature of the job, and the lack of career development opportunities may hinder the attractiveness of subnational local administrations as employers. Attracting, retaining and developing human capital in Poland’s local governments is a constant challenge due to changes in the labour market induced by megatrends such as digitalisation, globalisation and demographic ageing. Younger generations are no longer attracted to job stability and predictability of pensions in a ‘government job’, which is causing a brain drain in local governments such as the municipality of Międzyrzec Podlaski and Łańcut powiat. Local governments need to strengthen the competences of their officials, particularly on strategic management. This involves the ability to prepare and implement comprehensive projects to promote local development and fundraising. This is particularly important in municipalities “losing their socio-economic functions” and those at risk of marginalisation.

Local governments have limited revenues and large obligations

Local governments largely depend on national grants and subsidies. Moreover, despite efforts to consolidate local governments’ financial autonomy, their revenues remain highly dependent on central government grants and subsidies. The 2021 Tax Reform, called the ‘Polish Deal’, has reduced the amount of personal income tax (PIT) revenue distributed by central government to subnational governments each year. The PIT is the main source of tax revenue for municipalities. In 2016, grants and subsidies represented 65% of county revenues, 56% of municipalities’ revenues and 47% of regional revenues. Cities with powiat status have a more diversified structure of revenues, as grants and subsidies represent only 38% of their revenues. These results suggest that Polish regions and local governments will continue to rely largely on EU funds to implement investment projects that can help them to bridge development gaps. Providing public services is costly and only joint investment across municipalities may make it possible. Without access to EU funds, most of the progress achieved in regional development in Poland would probably have not been possible. Thus, a first challenge for Poland is to be able to finance regional development investments primarily with its own resources, mainly at subnational level. Second, Poland needs to match municipal responsibilities with corresponding revenues. While municipalities are in a better position in terms of own-source revenue than counties and regions, they have seen more responsibilities devolved to them and yet very little in the way of increased fiscal decentralisation to match them.

Private sector participation in urban-rural co-operation is still limited

Involving partners from the social or private sector is not always possible through the organisational form of co-operation, except in Local Action Groups (LAGs) which bring together actors from different sectors to develop the local economy through EU micro-grants to local businesses and NGOs. Local governments seem to be increasingly involving a wide range of stakeholders in development planning and other decision-making processes. However, there can be significant differences in how open the engagement process is and how meaningfully the public is engaged in decision-making. Occasionally, the upsurge of discontent against some urban projects or plans does force the question of consultation versus participation into the spotlight.

Key recommendations to strengthen urban-rural linkages in Poland

Recommendations for the national government

• Strengthen the policy development framework. The national government, under the leadership of the Ministry of Development Funds and Regional Policy, should clearly recognise the different characteristics of and potential for urban-rural partnerships in the national and legal framework. To this end, the new National Urban Policy should: i) include a better understanding of the different types of urban-rural linkages across the country with data at the appropriate spatial level, identify barriers ; ii) shift from project-based funding to programmes supporting integrated actions at the level of metropolitan areas with the participation of a wide range of stakeholders; and iii) set clear objectives and incentives to develop urban-rural partnerships. Moreover, the Strategy for Responsible Development (SRD) or the National Regional Development Strategy (NRDS) could explicitly define benefits, mechanisms and policy instruments available to develop urban-rural partnerships.

• Ensure that national urban and rural policies work in tandem. The aim is to stimulate urban-rural collaboration and set common or integrated goals, strategies and financial mechanisms to promote the role of urban-rural partnerships in territorial development. The Ministry of Development Funds and Regional Policy, in charge of urban policy, and the Ministry of Agriculture and Rural Development, responsible for rural policy, would need to co-ordinate their activities and strategic plans to adopt a coherent approach to regional development. Moreover, it is essential to make the preparation of a local development strategy (LDS) mandatory and to develop guidelines to conduct partnerships and set a common basis for co-operation and achieve economies of scale.

• Reinforce the role of regions in the promotion of urban-rural partnerships. Regional governments are in a strategic position to promote urban-rural partnerships. The SRD should specify the role of regions in increasing the focus and support to partnerships between FUAs and rural municipalities outside FUAs and grant them powers to use resources to co-finance urban-rural projects. Moreover, regions could be leaders in: i) identifying complementarities across different types of municipalities (urban, rural, and urban-rural) to adapt policies to the local context; ii) developing incentives to include non-governmental actors in urban-rural partnerships and upscale privately run partnerships (e.g. food or business associations); iii) supporting the participation of private actors from rural municipalities in the partnerships through access to funding and information; iv) appointing a person/team to look for opportunities of partnerships and promote them among municipalities; and v) defining indicators to evaluate urban-rural partnerships and measure the direct effect of the joint projects. Poland may consider assigning voivodes (government-appointed governors) and voivodeship marshals (heads of the regional administration) wider responsibilities in co-ordinating the design and implementation of the Regional Economic Frameworks and the Regional Programmes with local governments, and in ensuring a more co-ordinated approach to regional economic development as well as alignment with national goals.

Recommendations for the national and local governments

• Develop clear actions to build trust. To address structural factors undermining urban and rural partnerships such as the lack of trust or competition among communities, all levels of government should develop partnership structures that offer equal voice and vote to all partners, regardless of their size and financial capacity; and explore mechanisms to promote urban-rural partnerships through digital connectivity.

• Make better use of spatial planning as a tool to manage the perverse effects of suburbanisation. Within the framework of the Act on Planning and Spatial development, Poland needs to develop spatial planning tools (e.g. issuing a monitoring framework to assess changes in land use and dispersion of development activities) that facilitate the development of tailored spatial planning documents that promote a mixed use of land and prevent the loss of agricultural land close to suburbs. National and regional governments should encourage inter-municipal co-operation when preparing spatial planning acts; for example, through giving feedback, and joint preparation of planning documents. Municipalities within FUAs should regulate, in a co-ordinated fashion, new development, the arrival of new residents, and the quality of the habitat.

• Support the adoption of supra-local development strategies to enhance inter-municipal co-operation for planning and investment. National and regional governments need to encourage and facilitate the development of such instruments through technical guidance (e.g. the guidelines prepared by the Ministry of Development Funds and Regional Policy), access to data, and financial support. While the decision to prepare a supra-local development strategy is left to municipalities, the national government could adopt incentives that favour the elaboration of such a plan, for example by facilitating access to additional funding and capacity building activities.

• Leverage EU policy implementation to strengthen urban-rural linkages. This involves exploring and developing stronger complementarities between EU funding streams, particularly between the Structural Funds and the Rural Development pillar of the Common Agricultural Policy. To this end, Poland should further increase the territorial orientation of its national and regional programming documents, utilising the Partnership Agreement (PA), the national and regional Programmes and the National Strategic Plan for CAP to ensure enhanced coherence, co-ordination and integration of the ERDF, ESF+ and the Rural Development Fund in developing rural-urban partnerships. Poland could also foster the concrete implementation of the “Territorial Agenda 2030” and integrate it with the implementation of the OECD Principles for Urban Policy and Rural Policy (e.g. every key player at any governance level could be encouraged to consider these Principles in the exercise of its own mandate).

• Poland could incentivise the elaboration of integrated territorial strategies by favouring a co-ordinated and complementary use of Integrated Territorial Investments (ITI), Community Led Local Development (CLLD) and LEADER instruments. In particular, ITIs and CLLDs arrangements should be used to address urban-rural specific challenges and to develop more robust urban-rural linkages on well-defined common objectives. For example, this approach may include creating jobs outside agriculture, increasing the quality of connectivity between urban and rural areas, and supporting SMEs in the agriculture, agro-alimentary and forestry industries.

• Improve the use of ITI and CLLD instruments. To improve the use of ITIs, Poland may consider giving ITI unions powers that go beyond the simple designation of strategic projects, enabling them to conduct the full procedure of open call for proposals. The national government could issue new guidelines and adopt legislation to grant ITI unions powers to decide on membership and participation. Poland should also invest more in improving the understanding of the CLLD instrument across stakeholders by: (i) producing dedicated CLLD communication plans to facilitate the preparation of development projects through urban-rural partnerships; (ii) investing more in building community leadership and capacity; and (iii) setting up criteria for project funding that valorise urban-rural partnerships.

• Promote urban-rural partnerships through digital connectivity. The national government could include digital connectivity as an integral component of the National Urban Policy, and of mobility policies in particular. Urban-rural linkages through digital accessibility would help reduce the need for physical mobility. For this purpose, the national government would need to invest in fast and reliable broadband across the country. Facilitating the possibilities for municipalities to benefit from virtual interactions, such as remote working or accessing e-services, could help trigger more partnerships and boost well-being in rural regions, especially in marginalised areas, rural municipalities losing population, and medium-sized cities “losing their socio-economic functions”. Digital connectivity requirements could be included as part of (supra) local development strategies and partnership building.

• Improve inter-municipal co-operation arrangements. Different actions could be considered in this respect:

  • Ensure flexibility and voluntary partnership building. Poland has two options: i) conduct a voluntary merger of local authorities to reduce fragmentation in FUAs; or ii) strengthen what is called ‘trans-scaling’ through institutionalising inter-municipal co-operation arrangements. Co-operation arrangements should be facilitated for cities of different sizes and co-operation should be multi-purpose.

  • Strengthen metropolitan governance arrangements. Poland could benefit from having a metropolitan level in the political-administrative structure, but without necessarily creating a new level of government. This stronger but institutionally light scheme of metropolitan governance could be achieved by creating further metropolitan unions at the statutory level, which will give metropolitan areas the administrative and financial foundations for managing development. It is therefore essential to implement the Metropolitan Union Act of 2016 through appropriate regulations to facilitate the creation of more statutory metropolitan areas. Poland could also create more inter-municipal joint authorities in metropolitan areas (FUAs) for specific services in a first stage such as public transport and/or metropolitan planning, and then move on to include other areas of co-operation.

  • Strengthen national/subnational co-ordination for urban-rural linkages and regional development planning. Poland could also consider formalising institutional agreements between levels of government to generate trust-based relationships, regardless of the size of the government. They can clarify “grey areas” where responsibility for action or outcomes has not been concretely established. Collaboration agreements may be established not only with individual local governments but also with unions, or associations of local governments, which may group municipalities of different kinds (urban, urban-rural, and rural).

  • Adopt shared tools and mechanisms for planning at supra-local level. Co-ordination of spatial planning in urban-rural areas requires systemic regulations that consider the opinions of municipalities in planning investment projects of supra-local importance. It is also necessary to complete the process of integration of spatial and socio-economic planning and ensure that Local Spatial Development Plans cover wider shares of the municipal territory. To improve planning, Poland should give functional areas operating with ITI funds the possibility to better integrate (or valorise) their territorial strategies and plans within the relevant Regional Programmes; ensure that policies for functional areas do not differentiate between urban and rural areas; and diversify the tools to make associations or inter-municipal unions operational.

  • Create regional agencies for economic development that work with public and private sector stakeholders. These agencies could develop programmes to enable businesses to grow and even support innovators to start businesses. The agencies would help tailor national economic programmes to fit regional needs and circumstances, provide access to financial assistance, and bring together key players from the different municipalities in the region to work with them.

• Reinforce local governments’ capacity to build and manage urban-rural partnerships. To improve municipal capacity for taking part in urban-rural partnerships, Poland needs to simplify the administrative process and reduce red tape to conduct urban-rural partnerships. This could include, for example, the adoption of standard application formats and clear guidelines to form partnerships. All levels of government could develop network activities and conduct proactive intra-regional advisory assistance to reach weaker municipal governments. Expanding the support currently provided by the pilot project Advisory Support Centre; and providing specific consulting and technical assistance to local governments to navigate and implement EU and national instruments are among feasible ways to support local governments. The use of new (digital) technologies could also help municipalities, in particular rural ones, to improve their capacity for service delivery in the context of an ageing and shrinking population. Poland may explore the viability of establishing shared service bodies in functional areas. These agencies manage support services such as human resource management, ICT, procurement and others as a way to improve capability and manage resources in a more efficient way.

• Invest in capacity-building and professional skills in local governments. Municipalities should pay closer attention to their future skills requirements and integrate workforce and human capital considerations into broader policy changes that could have an impact on service delivery. This means that local governments may need to identify the capabilities needed in the workforce and link them to human resource management activities (recruitment, staff development, performance management) to enhance capacity. Investing in upgrading the planning skills of the local workforce should also be a priority in the context of the creation of supra-local development plans.

• Reduce the dependency of funding sources from the EU to support regional and local development. To tackle local governments’ financial limitations, the national government may consider four courses of action:

  • Assigning dedicated funds to incentivise collaborative local development and investment projects.

  • Managing the costs of delivering public services in a way that considers the spatial distribution of the services, the spatial distribution of the targeted population, digital forms of access (including the availability, affordability of broadband and the digital skills to use them), and the unavoidable trade-off between cost and distance.

  • Reducing the gap between expenditure and revenue at subnational level. For this purpose, the national government needs to decentralise revenues by granting greater tax autonomy to local governments, for example by giving more decision power over rates and bases, in particular property tax. It will be necessary to conduct a review of competences and functions of local governments and their sources of revenue to avoid unfunded responsibilities. Revenues should include a mix of user fees, taxes and inter-governmental transfers.

  • Ensuring that subnational financing adopts a functional approach by selecting the taxes that are available and that could support the work of metropolitan areas. Even though metropolitan areas usually do not have statutory level, property tax could be a source of revenue for them. However, property tax is the main source of own revenue for municipalities and it does not even cover municipal needs. Local governments could enhance revenues from the property tax by implementing other land use tools that capture increases arising from public investment.

Recommendations for local governments

• Enable participatory processes for stronger urban-rural linkages. Poland may wish to ensure inclusive participation in regional development strategies, and urban-rural partnerships in particular, to avoid widening regional disparities. Moreover, Poland may need to diversify participation in local action groups (LAGs), either by regulating participation in LAGs boards and introducing a rotational membership to give more people the opportunity to participate; or by developing strategies to facilitate community engagement beyond the LAGs. Municipalities may also wish to take steps to engage directly with citizens through participative budgeting, for example.

• Incorporate national strategic goals in local development strategies. It is important to ensure that the functional approach present in national documents is part of the political and planning debate; and aligning local development plans with national strategic objectives by focusing on implementation.

• Expand the spatial dimension of urban-rural partnerships. Municipalities outside FUAs but within the catchment area could be considered as potential members of an urban-rural partnership. In the context of digital transition, municipalities may also consider partnerships or inter-municipal agreements for e-services, facilitating access to services to those municipalities located remotely.

• Accelerate the adoption of supra-local development strategies and co-ordinate strategic and land use planning among municipalities within the FUA though inter-municipal associations or agreements. Cities and rural areas should work together to develop investment strategies and update spatial planning documents.