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Free service provision to all or some users a funded by general taxation. Financing the entire cost of services by user tariffs, according to the principle of “full cost recovery”. A system of subsidies or participation by other actors (as in the case of urban transport in many French municipalities). Co-financing by national, regional and
70%
central government but, since 1990, decentralization has been accompanied by a reduction in this source of financing. Investments in the water sector are mainly financed by public subsidies and loans. In this respect, EU structural funds can play a very important role in some local contexts. In the solid waste sector, sub-national
Population lives in urban areas
local public authorities, as well as European or international funds. Cross-subsidies, which can be geogra phical (e.g. a single, universal price for a postage stamp), social (between generations or to smooth returns on investment over the mid- to long-term) or between sectors (profits from one activity being used to finance deficits in others).
grants are sometimes provided to meet environmental targets. In the field of water, EU policy goals are evolving to increase emphasis on cost recovery from water users. However, very few countries have managed to recover all economic and environmental water costs through tariffs (Denmark is a notable exception). Rates of tariff collection also vary widely among countries.
Often, a combination of these models of financing is used, which sometimes makes it hard to make transparent the ‘true costs’ of service provision.
Access: meeting the needs of the p opu lation: solidarity, social dialogue and citizen participation
The funding of urban public transport, for example, only partly relies on the fares paid by passengers. Most costs are financed by public subsidies and provider revenues, and financial participation from other economic operators. In France, cross-subsidies between different municipal services are used to finance transport, while in Germany revenues resulting from associated commercial transport activities are used. In Central and East European countries, urban transport services were traditionally financed by the
Basic public services exist to meet the basic needs of citizens and communities. Services therefore evolve over time according to evolving needs and technological change. Overall, in Europe, access to basic services is much more developed than in other parts of the world. At the same time, available statistics show that access is not yet universal. For instance, there is still an East–West divide in access to safe drinking-water in Europe. In many Western countries, access