Local welfare systems in Europe and the economic crisis

Social change in welfare capitalism

The tendency towards the diffusion of more localised welfare provision is part of the post-industrial transformation in European societies. The increased importance of local welfare coincides with the more heterogeneous, diversified and complex (needs and) demand for social protection that has been generated by social change in employment, family and demographic assets, and global economic competition (Bonoli, 2007; Taylor-Gooby, 2004). The localisation of welfare provision is assumed to be more efficient, less expensive and more participatory compared to centralised national welfare programmes. This localisation process is part of a complex and controversial transformation which has been under way in advanced industrialised countries, with shifting fortunes, for at least 40 years. Yet, this is a countertrend with respect to the historical centralisation that accompanied the rise of modern nation states and capitalism.

At the heart of the development of modern social protection in industrialised countries is a process of centralisation of the nation state which lasted from the beginning of the industrial revolution to the oil crisis of the 1970s. The national centralisation process accelerated in the 19th century, for example, in the form of the Poor Laws in England and the Bismarck reforms in Germany which were immediately copied by the government in post-unification Italy, and which reached their peak in the ‘trente glorieuses’ with the consolidation of the ‘worlds of welfare capitalism’ (Esping-Andersen, 1990).

The Beveridge Report (Beveridge, 1942) in the UK can be understood as a manifesto for the construction of a national, universalistic and standardised system of social protection. Beveridge’s plan foresaw a capillary form of social protection, distributed in universal ways to all individuals experiencing different conditions of risk, on the basis of need. Beveridge also proposed that this protection be financed from equitable contributions operated centrally by the national government and paid for by all citizens proportionally to their income. The welfare protection imagined by the Beveridge Report was not fully implemented in any country, but this philosophy of a standardised universal system of rights and duties inspired welfare reforms in the post-war period in all Western European countries.

It was in that period that public welfare programmes designed what Marshall (1950/1964) refers to as ‘social citizenship rights’. Local governments were important to the implementation of social policies and programmes, although they were considered to be transmission belts for policies that were centrally defined (Brenner, 2004). Within the construction of the centralised national welfare state the ‘professionalisation’ of services and social protection is an important feature, e.g. giving professional status to care and social work, therefore removing it from the exclusive realm of family delivery (defamiliarisation), and it occurred at different speeds and in different ways in different national contexts (Esping-Andersen, 1990; Mingione, 1990). The process of professionalisation of welfare is still under way, based on new professional profiles rooted in the heterogeneity of local experience and in the involvement of private firms and voluntary bodies.

From the 1970s onwards, the process of change has transformed the need for protection and the structure of risks which national welfare, in its different configurations, must tackle. These changes in employment and the labour market, in family arrangements and demographic trends are very well known, and we do not elaborate them further. ¹ Instead, we stress that it is in this historical context that the idea of a new type of welfare has taken hold, one which is more local and more closely focused on the obligations and duties of those in need of support (Esping-Andersen, 2002). This has generated growing interest in ‘active’ welfare, promoting forms of ‘empowerment’ (Ascoli and Ranci, 2002; Bonoli, 2013; Evers and Guillemard, 2013b; Jenson, 2009; Morel et al., 2011; Paci, 2008; Pavolini et al., 2013) mobilising the third sector and voluntary organisations (Evers and Laville, 2004; Ferrera and Maino, 2011) and – also in line with neoliberal thought – contemplates the privatisation of parts of the social protection system ² (Peck, 2002). The ‘new active welfare’ lays its foundations at the local level, where it is supposed to be easier to start processes of activation and to create synergies with the local voluntary bodies.

In this paper we argue first that the process of the transformation and localisation of welfare in industrialised countries is driven by two different (sometimes opposing) forces: (1) the necessity to identify effective ways of responding to the need for social support which is increasingly individualised, fragmented and heterogeneous, and therefore to expand ‘active’ social policies; and (2) the necessity to keep under control (and more often reducing) national public spending.

The difference between these two forces of change entails distinct strategies for welfare reform which are not always reconcilable: there is a drive to achieve more effective protection against the new (and sometimes the old) risks, which often involves increased spending, whilst seeking to make savings and to cut public expenditure. Our hypothesis – that the process of social change entails the tensions between these two forces – contributes to going beyond the limits of the debate between the neoliberal supporters of the necessity to reduce the welfare state, and the supporters of a mechanical defence of bureaucratised, unequal and centralised traditional public protections. As we shall show in this article, within the current modes of welfare provision at the local level, we can find both tendencies towards privatisation of social protection and severe cuts to social expenditure, and some innovative investments in public social policies in combination with inclusive practices involving citizens’ movements and third sector agencies (Bifulco, 2014; Bonoli, 2013; Fraser, 2011).

Second, we argue that a more integrated welfare system (involving the third sector, voluntary organisations and private providers) and one which is more locally differentiated poses a series of problems in terms of social and territorial inequalities, and the possibility of realising social citizenship rights. Together with reductions in resources – as it frequently occurs in this period of economic crisis – this involves the risk of opening up gaps in protection where local innovations, empowerment and activation, and the mobilisation of the voluntary sector, are not able to compensate for the downsizing of national public commitment to national social citizenship rights.

The paper is organised as follows: in the next section we deal with the first driver of change, arguing that institutional elements are often neglected when referring to the localisation of welfare provisions; in the third section we deal with the second driver of change – the need to cut public expenditure and the influence of the EU in this framework. In sections four and five, we deal with the outcomes of localisation policies, and how local welfare systems can increase social and territorial inequalities putting forward some conditions that can help to keep them under control; the case of Italy will be used as an example. The final section deals with the effects of the crisis on local welfare systems and the tendencies towards recentralisation.

Local welfare as a process of social innovation

We now discuss in greater detail a number of questions related to the growing importance of local welfare in the first driver towards the transformation mentioned above, that which accepts the need for more capillary, personalised responses to a series of fragmented and individualised risks.

The idea that local welfare is more effective in recognising and tackling these new risks has been supported by the European Commission and encoded in a concept which has become an important ground rule for national public policy: vertical subsidiarity (Kazepov, 2008). This principle affirms that welfare provisions should be constructed at the lowest possible scale, which permits the most practical provision of effective social protection. The issue of vertical subsidiarity poses controversial problems. The first point under discussion refers to the meaning of the ‘local level’. In almost all systems of administrative decentralisation, the lowest local administrative level is the municipality, which is often also the public body in charge of providing social services and implementing many support measures. When one discusses local welfare, one almost always thinks of the municipal administrative layer: the city.

Starting from the assumption that local welfare is linked with cities, it is necessary to explore a number of questions relating to the institutional design of responsibilities, the size of the local authority, and financial resources. In almost all administrative systems, there are one or two intermediate institutional levels between cities and the national administration. In federal systems – but also in Italy – the largest intermediate level (be it the region, Land, Comunitad Autonoma or Canton) has considerable importance in structuring welfare policies, because it has shared responsibility for coordination and institutional regulation, but is rarely in competition with the urban/municipal level for the provision and implementation of local welfare. One may state, therefore, that forms of decentralisation can vary, giving rise to different forms of vertical articulation of public policies, although these differences do not impede the growing importance of the local level in designing, implementing and providing support. In the Italian case, where regions’ responsibilities have become extremely important in recent decades, leading some scholars to speak of a ‘regionalisation of welfare’ (Ciarini, 2012; Fargion and Gualmini, 2013; Ferrera, 2005; Ferrera, 2008; Kazepov, 2010; Kazepov and Barberis, 2013), the regional and urban levels rarely enter into competition. The most important controversies are situated between the national state and the regions, in terms of regulatory responsibilities as far as social policies are concerned, and between the national state and the municipalities, which are charged with providing the actual services and interventions for social protection, using available financial resources.

If we observe an increasingly diversified and composite demand for welfare within this process of change – to which cities must respond – we are led to ask how and in what ways the local level can provide effective welfare. In order to produce effective services, it is not enough to be in close contact with the beneficiaries, and to understand their needs. It is also crucial to have the financial and professional resources necessary in order to realise the required social support.

Another important issue arises from the size of the local institutional body. Whilst large cities can find a way of decentralising interventions whilst maintaining acceptable economies of scale, small entities (especially those situated in remote regions) encounter considerable problems in developing an effective system of welfare, both in financial and human resources terms. This is why from the 1980s onwards, the Scandinavian countries began the drive towards local welfare by reforming their system of municipal organisation, merging together small municipalities and providing additional national resources to those situated in remote areas (such as helicopters for transporting people in need of hospital care or to bring students to school) (Benner and Vad, 2000; Timonen, 2004). This kind of reform has considerable political and economic costs that are easier to support in a period of economic growth, and more difficult to justify in periods of crisis. The countries which managed to move quickly towards this ‘new welfare’ by adopting early reforms enjoy considerable advantages, whilst latecomers have generally missed the favourable window of opportunity for this kind of institutional change (Bonoli, 2007).

The question of financial and professional resources for the development of local welfare may be posed on an even more general level. In fact, the municipalities arguably do not have enough resources to promote the ‘new welfare’. If this must be capillary, personalised and ‘active’, then it entails elevated costs, including the development of new professional competences. Examples include pre-school childcare, provisions for elderly people who are no longer able to take care of themselves, mediation services which are essential for the social inclusion of immigrants and, to an even greater extent, active labour market programmes (Bloom et al., 2003).

A problem which is often forgotten when the virtues of Scandinavian ‘flexsecurity’ programmes are emphasised is that the protection that provides security is expensive in its national articulation (passive welfare), involving income support for those who are not in paid employment, and, to an even greater extent, it requires large resources for ongoing training and work placement programmes which must be implemented at the local level (in the form of active welfare) (Newman et al., 2014). It is thus the national state which must transfer the necessary financial resources or allow local bodies to levy taxes in order to fund new welfare provision. In both cases, there is the potential for tension in relation to the level of public spending and how it should be controlled, and this tends to worsen in times of crisis.

As far as financial resources are concerned, it is worth noting that local welfare has considerable potential to draw on the contribution of voluntary organisations, as well as exploiting synergies with private firms which provide marketable services. The involvement of private and voluntary agencies is denominated as ‘horizontal subsidiarity’, often with the controversial assumption that this shift generates resources that can compensate for cuts at the national level. At a local level, it is certainly possible to identify third-sector organisations or private firms with which agreements regarding the provision of welfare services can be reached. The experience of labour market inclusion programmes for those receiving income support reveals a rich mix of agreements with firms which facilitate training, labour market entry, access to housing, family and cultural mediation. However, in contrast to the predictions of supporters of welfare privatisation, the synergy with private providers does not solve financial difficulties. In almost all cases, private interventions are not without cost for public bodies, as the private firms involved need subsidies in order to function effectively in this role. Furthermore, in the production of welfare services, market competition often does not yield reductions in costs, but rather brings about a reduction in the quality of services, or the exclusion of the ones who cannot afford high prices. The activation of synergies between local public welfare and private initiatives forces local managers to develop professional capacities that can favour the coordination and control of new forms of social protection. Yet, the development of these skills and capacities also has a substantial economic cost which local administrations must meet in terms of human resources and training.

The second driver of change: The influence of the European Union on the regulatory framework

Within this process of change, the European Commission is actively involved in developing a regulatory framework for the expansion of local welfare, based on the principles of vertical and horizontal subsidiarity, social cohesion and tackling poverty and exclusion, favouring active welfare and labour market policies, and setting minimum thresholds for the social services provided by member states (such as providing collective childcare services for at least 30% of children under three, for example). A key term that has emerged within this context is ‘multilevel governance’, which defines an approach where member states and local administrations seek to involve private partners and voluntary organisations in the activation of new forms of welfare (see also Dabrowski et al., 2014; Milio, 2014). The White Paper by the Committee of Regions states that ‘multi-level Governance is about ownership, about the participation of all stakeholders, about sharing roles, targets and responsibilities (Bifulco, 2014). To be clearer, it’s about subsidiarity, which means sharing competences between the EU [European Union] institutions, the member states and the regional and local authorities’ (White Paper on Multi-level Governance, adopted in June 2009 by the Committee of the Regions: 2–9). The EU recommends that all national and local partners be fully involved in the process of designing, developing and delivering social policies, and that this process be based on a clear division of responsibilities between the various institutional forms of public administration.

Faced with explicit recommendations for the strengthening of welfare and tackling social exclusion via local innovation and partnerships, the role of the EU may not have a homogeneous and effective impact on the regulatory framework of all member states (Barbier, 2012, 2013). It is particularly relevant, in this regard, that the local welfare practices concerned are not directly financed by the EU, which has continued to advise member states to give priority to fiscal rigour, to respect the Fiscal Compact and observe the macroeconomic compatibility of social spending during the recent years of economic crisis. This means that national states are given responsibility for assisting local bodies in putting EU directives into practice, constructing innovative social services and new interventions to tackle social exclusion and new (plus old) social risks in the context of growing financial constraints. In certain national contexts, the regulatory and financial commitment of the central state is strong, whilst in others it remains rather weak, and an insufficient amount of resources are available for these initiatives.

In the Scandinavian countries, the process of welfare reform began at least two decades ago, and was accompanied by a central regulatory framework which provided a strong guarantee for the universal coverage of protection measures, as well as compensating for geographical and social disparities. Whilst tackling inequalities within this context of the development of services and new forms of local ‘activation’, regular revisions of the decentralisation process were carried out, including forms of recentralisation in order to reinforce national standards (Bonoli, 2007; Kazepov, 2008, 2010; Trydegård and Thorslund, 2001, 2010).

The southern and eastern European countries are in much greater difficulty, because they must implement a profound reform of their welfare systems in conditions of persistent economic constraints. The activation of the local level is being undertaken with insufficient financial and professional resources, leading to modest results and unequal outcomes (Bonoli, 2013; Hemerijck, 2012, 2013). In the southern European countries (for the Italian case see Fargion and Gualmini, 2013; Kazepov and Barberis, 2013) where the process of defamilisation was particularly slow, the local level ends up by playing a contradictory role in terms of inequalities, exacerbating low geographical mobility, and a reduction in autonomy and personal self-realisation. In the Italian case, Ferrera et al. (2012) point out that the transition and the crisis have been tackled by overloading families with responsibility for social protection, which ‘has had the effect of pushing Italian familism towards perverse and even self-destructive forms of adaptation’ (p. 335). Young people in the least developed areas of the country (mainly concentrated in the south of Italy) have been among the social groups more penalised by these forms of adaptation to social change and the crisis. Highly educated youths are leaving the country in increasing numbers, while the less educated are condemned to precarious forms of employment (and young women are confined to involuntary domestic work) and a further increase of the already high level of family responsibility to support weak members (Andreotti et al., 2013).

Local welfare and the increase of social and territorial inequalities

The main question concerning contemporary transformations of welfare, and the greater relevance of local welfare, regards their potential impacts on social and spatial inequalities. The decline of standardised, universalistic forms of support, within the context of a more diverse and unstable society, gives rise to changes in the nature of inequalities, with varying effects in different contexts.

Cities have different resource bases, both in terms of financial resources and professional capacities, but also in relation to the presence and activity of voluntary organisations and private firms. These features of cities contribute to define specific local welfare systems. In a recent publication, we proposed the following definition in order to take into account the importance of a complicated, fragmented and individualised demand, on the one hand, and a diversified mixture of public and voluntary organisations providing welfare, on the other (Andreotti et al., 2012). When we speak of local welfare systems we mean:

dynamic arrangements in which the specific local socio-economic and cultural conditions give rise to different needs of people and different mixes of formal and informal actors, public or not, involved in the provision of welfare resources. Local Welfare System is not to be considered as a simple rescaling of welfare responsibilities to the local level, but as specific configurations of population needs and welfare providers and resources emerging at the local levels (Andreotti et al., 2012: 1925).

Each local context (city) has its own history, with specific economic characteristics (e.g. the prevalence of a sector, of small or medium-sized firms rather than large firms, female occupation, informal work), demographic attributes (e.g. the structure of the population, families, immigrants and ethnic minorities) and political and social influences (e.g. political subcultures, civic traditions, presence of the third sector) which contribute to forming different local welfare systems and to structuring the different ‘visions’ that they express in terms of social policies (Mingione and Oberti, 2003).

To the left side of Figure 1, we find the various social groups which express a distinct demand for welfare, and account for the specific risk profiles that may characterise each local welfare system. This has important consequences for the planning and delivery of social policies. To the right of Figure 1, we find the characteristics of the private firms, third-sector actors and public bodies which are present at the local level, as well as the partnerships and other forms that they adopt. The capacity of the public administration to promote and coordinate the cooperation, participation and empowerment of citizens is a key variable as we have already seen and shall see again. The cleavage between north and south, in the Italian case, is emblematic of these differences, and it can be used as an example to show how territorial inequalities can increase. Southern cities have fewer resources, the third sector is more fragile and private industry and services are relatively less developed. Moreover in the southern cities, the need for support on the part of the unemployed, poor and large families is greater compared to the rest of the country. ³ The shift of responsibilities towards the local level therefore risks enhancing these spatial inequalities, as occurred in the last two decades.

OPEN IN VIEWER

Figure 1.

Structure of local welfare systems.

Even within a given area, social protection mechanisms can be unbalanced, favouring certain social groups and penalising others. Consolidated local traditions and the local resources mobilised by voluntary bodies are often oriented towards specific groups (such as children, members of dominant religious faiths, etc.); in this sense, they do not have universalistic connotations. Even local public interventions, if these are not carefully regulated by a strong institutional presence, can focus only on specific areas and social categories, leading to discrimination against Roma people, for example, or certain categories of Islamic immigrants (Corsi et al., 2008; Polizzi et al., 2013).

The transformation of welfare therefore seems to undermine the social citizenship rights theorised by Marshall, which appear to be accessible only in relatively homogeneous societies, and in the context of constant economic growth. At the same time, however, the concept of citizenship itself is becoming more inclusive, going beyond the rigid social divisions of the manufacturing age (and basis for the Marshallian citizenship) (Bifulco, 2014; Newman et al., 2014). The contemporary social cohesion and social inclusion perspective must confront a range of problems neglected by the social policy culture typical of the previous phase, such as equal gender opportunities, full welfare support for resident migrants with different cultures, respect for different sexual and cultural identities, transnational mobility and the like. Moreover, the debate on the current change of welfare systems is also underlying the increasing importance of active participation and the involvement of citizens’ associations and new social movements in framing what might be termed a ‘Post-Marshallian system of social citizenship’ (Johansson and Hvinden, 2013; De Leonardis, 2011). ⁴

The transformation of welfare towards more localised, active, mixed and diversified welfare provision reflects and sometimes magnifies the growth of social and geographical inequalities, eroding the system of divided but standardised rights. Within this historical transition, there are some conditions that could reduce social and territorial inequalities. In a preliminary synthesis, we have identified six conditions pertaining both to institutional regulation at different scales, and to specific local welfare systems. As far as institutional regulation at different scales is concerned, these elements are: (1) a national and supra-national institutional regulatory framework which aims to ensure basic levels of protection to the population; (2) an effective system for redistribution from central authorities towards local bodies and social groups in greatest need; (3) relatively large local authorities with the financial and professional resources necessary in order to provide effective services and supports. As far as elements pertaining to specific local welfare systems: (4) widespread local capacity to exploit the contributions of voluntary organisations and private firms, organising these in a synergic way; (5) capabilities of local social workers oriented towards the identification of disadvantaged populations in order to protect, compensate and actively include these groups; and (6) the political will to combat the discrimination of minorities and other vulnerable (but potentially stigmatised) groups.

These conditions can only be realised via the mobilisation and participation of diverse actors (local and national, public and private), associations and social movements present at the local level (Paci, 2008). It is precisely through this participation that one can seek to develop effective local welfare services and, at the same time, tackle social and spatial inequalities.

We have already discussed the first three conditions (national and supra-national regulatory framework; clear redistribution of financial resources from the central authorities to local bodies; relatively large local bodies), which are generally independent from local conditions and relate to institutional regulation. We have seen that the Italian case is particularly problematic in relation to all of these three. The Italian constitutional reform of 2000, which attributed exclusive competence for social policy to the regions, created a confused regulatory framework, exacerbating the complicated situation which already existed due to the historical, localistic fragmentation of the Italian institutional system (Fargion and Gualmini, 2013; Kazepov and Barberis, 2013). The central state has maintained control over the redistribution of resources, without developing a clear plan for welfare reform, with the result that the regionalisation of responsibility for social policy has been implemented without financial decentralisation. The resulting conditions have made it particularly difficult for local welfare to become effective, even before considering the impact of the economic crisis. These difficulties have increased, naturally enough, as public spending has been reduced and as a range of austerity measures have been adopted to deal with recession (Bifulco, 2014). The fact that Italy missed the window of opportunity for reforming local welfare during a more favourable period has particularly negative effects in this context.

Reinforcing traditional local differences

The remaining three conditions – the development of executive capabilities of social workers; widespread local capacity to exploit the contributions of voluntary organisations and private firms; and the political will at all levels to combat the discrimination of minorities – are more specifically related to the local context and give rise to interventions which are more or less unequal and partial, and which maintain an equilibrium between welfare innovation (more individualised, unstable, diversified conditions) and social inequalities. Even in a relatively difficult context such as the Italian case, and more generally the countries of southern and eastern Europe, local cases can be more or less innovative, more or less equal and open, and more or less oriented towards tackling discrimination. The Italian case is again interesting because it immediately brings to light the marked and persistent differences between the north and south of the country. In southern Italian cities, high levels of unemployment and poverty and low levels of employment (particularly, but not only, of women) have an impact on the configuration of demand for social protection in the context of modest local resources (both public and private, financial and professional) and state transfers which are increasingly limited as a result of crisis and austerity. The absence of a national income support programme (as in Greece), strong restrictions on unemployment subsidies and the difficulties in imagining active labour market policies in a scenario where occupational opportunities are sharply lacking, powerfully constrain the potential for local welfare, just as the weak synergy between public and private also hamper this development. Innovation, in the best case, focuses on programmes for tackling specific forms of poverty that are considered more ‘deserving’ at the local level, but does not have sufficient resources for upgrading services, policies for work and family reconciliation, assistance for elderly people who are no longer self-sufficient, integrating immigrants and so on.

There have, nevertheless, been some innovative experiences in local welfare, above all in relation to the battle against organised crime, assistance for poor families with young children, initiatives to tackle school drop-outs as well as more substantial programmes of successful local development which were co-financed using EU structural funds. However, all of these initiatives have typically been limited in duration, are sporadic and have not survived beyond the end of funding by the central state. The problem is that even more than elsewhere, these experiences have not contributed to developing an active and participative welfare which can provide a response to the radical transformation of social risks.

The difficulties of local welfare in the Mezzogiorno identify an important dimension of comparison which focuses attention on the situation in all areas with a persistent and chronic employment crisis, due to the long-term impact of deindustrialisation (the rust-belts where job losses have not been offset by new areas of growth) and the fact that these areas did not draw full benefit from a strong process of manufacturing-led development. In the case of northern Italy, innovations in local welfare are much more evident in the area of services (above all in relation to policies for reconciling work and family responsibilities, including early childcare, but much less so in relation to care of the elderly; Da Roit and Sabatinelli, 2012), in policies for the social integration of immigrants and minorities (but on unequal terms, and in an uneven manner, according to the political affinities of local government and whether local conditions are favourable or not ⁵ ). As the employment crisis has intensified in recent years, innovations have also been visible in local initiatives to support the ‘new’ poor and long-term unemployed, given the absence of any reliable form of national regulation or programme for poverty reduction. The more innovative character of local welfare in the north has undoubtedly contributed to the growing gap between north and south. Nevertheless, the variety of innovative experiences has not been translated into a greater differentiation or geographical variation within the northern regions. These experiences of local welfare in northern Italy reveal a number of underlying trends towards convergence in this macro-area. For example, the strengthening of early childcare and policies for the reconciliation of paid work and family commitments represents a constant in almost all areas of the north, and is accompanied by homogeneous growth in employment rates for married women – at least until the crisis started to have a serious impact on employment in about 2011.

Even in the more ideologically-sensitive area of policies for the integration of immigrants and minorities, there are a number of favourable constants, particularly regarding children and the removal of discrimination in terms of access to education and health care, as well as some constants that penalise Roma and Sinti people (Corsi et al., 2008). In a certain sense, one might say that, even where macro-level regulation is weak, the process of the diversification of welfare is contrasted with the fact that local areas must tackle similar problems with roughly similar endowments of financial and professional resources. This explains why the north–south divide in Italy is much stronger than the diversification of local welfare within each of these macro-regions.

A similar argument may be made in relation to the relatively less important role that local public leadership appears to play in the configuration of the supply of welfare (the sixth condition mentioned earlier). The limited resources and professional competence appear to have slowed down the diversification of local innovation in welfare which followed the electoral reform of 1993, which allowed directly-elected mayors with a high popularity to exert a strong leadership in the realignment of local governance (Bifulco, 2014; Bifulco et al., 2008; De Leonardis, 2006; Piselli et al., 2012). Interestingly, however, there are no visible cases where new mayors had a prominent role in reinforcing local welfare. Some experimental initiatives which have been described as examples of good practice, such as projects that aim to plan for the temporal organisation of the city by consulting citizens, or provision of support for homeless families during the crisis by creating mixed public/private funds have been the result of bottom-up developments in relatively resource-rich and dynamic contexts, including the decisive contribution of certain voluntary organisations (such as the Caritas Ambrosiana in Milan). On the basis of these observations, it is possible to conclude that local welfare, as well as being a controversial and uneven process, also tends not to explicitly enter the political agenda, even at the local level. ⁶ This issue deserves further attention involving international comparisons in order to assess whether in other European countries local welfare has assumed a priority role in the political agenda, leaving aside the rhetoric of vertical subsidiarity and decentralisation.

The impact of the economic crisis on the dynamics of local welfare in Italy and in Europe

The economic crisis which began in 2008 has had a differential impact in different European, national and local contexts, and has altered the process of the transformation of welfare systems. The crisis, in almost all national and local contexts, is exacerbating the tension between the two opposing forces that are driving welfare reform: the need to identify effective forms of protection, faced with a growing number of people in difficulties, with different individual profiles and needs, on the one hand, and the necessity to keep public spending under control in order to avoid the risk of debt default on the other. The first of these forces continues to see the local level as the most effective area for developing innovative practices, promoting the ‘activation’ of beneficiaries and the involvement of private and voluntary bodies. The second driving force frequently manifests itself in a trend towards recentralisation, particularly with a view to implementing cuts in public spending but also, in certain cases, to slow down the growth of social and geographical inequalities.

The crisis has had variable negative effects both in terms of the transformation of the demand for social protection and in terms of the supply of welfare supports (Hemerijck, 2012). As far as demand is concerned, it is worth noting the impact of increasing levels of unemployment and above all the growing difficulties of young people in finding and maintaining a job. The map of the employment crisis reveals a concentration of difficulties in all southern European countries, although the populations most at risk are found in some cities in Greece, southern Italy, Spain and Portugal (Hadjimichalis, 2011; Vaiou, 2014). Here the combination of weak central regulation and insufficient financial and professional resources has led to both a growing deficit of welfare and increasing geographical and social inequalities at the local level.

The employment crisis has the effect of slowing down migration flows, but has not determined a proportionate reduction in the demand for social integration and protection on the part of immigrants. In fact, the crisis tends to accentuate the selection of incoming migrants in favour of women, families and therefore also immigrant children. This means that the demand for local welfare services for the integration of a multi-ethnic population remains high, particularly in relation to housing, schools and health care, and this pressure for welfare innovations to meet the needs of immigrants is distributed unevenly across different localities. In cities which host large concentrations of recent immigrants and their families together with large numbers of unemployed locals, the tensions that cut across local welfare systems can give rise to conflicts, discrimination and populist or even racist political expressions. ⁷

At any rate, the persistence of the economic crisis tends to give rise to a higher degree of competition between different vulnerable groups for scarce and decreasing resources. In areas where national regulation is weak, as in the countries of southern and eastern Europe, and local resources (and national transfers) are limited, this competition tends to penalise the most vulnerable and marginalised social groups. Thus, inequalities and discrimination are likely to increase in many European countries as the crisis endures.

As far as the supply of services is concerned, local welfare systems are clearly suffering from the effects of austerity, cuts in public spending and the need for central government to curtail expenditure. In the Italian case, for example, the institutional association which represents all municipalities (ANCI: National Association of Italian Municipalities) has drawn attention for some time to the fact that the combination of reduced state transfers and the limitations on spending in order to respect the stability pact imposed by the EU imply drastic cuts in local social services. As we have already seen, the local level has the potential to mobilise new resources in the private sector and involving voluntary organisations, in favour of effective and egalitarian social protection, only if it has sufficient financial and professional resources. As Da Roit and Sabatinelli have argued, with reference to Italy, ‘Given the frequency and magnitude of cuts to social expenditures and transfers from central to local levels, both social actors and subnational bodies have been much more concerned with defending existing provisions than pressing for resources to respond to new demands’ (2012: 445). The informal responses to deal with the crisis – like drawing on family and neighbourhood solidarities, or mobilising various kinds of help and voluntary assistance, non-financial exchanges and so on – constitute a defence against the dramatic tendency towards impoverishment but also contribute to undermining universalistic protection and increasing inequalities.

In a similar way, the financial suffering generated by the crisis has not been spread evenly across all local contexts. Certain southern European cities find themselves facing the dramatic growth in unemployment and poverty, with minimal public funds and with private and voluntary sectors which have been rendered fragile and more vulnerable by the crisis. In these conditions, the impact of welfare innovations is limited and, at the very best, is concentrated in areas which are considered more important at the local level, amplifying inequalities at this level, as we have seen in relation to southern Italy.

The need to hold down public spending and the drive to tackle social and geographical inequalities produce forms of recentralisation of public social protection in different ways. Even within this process it is important to underline how the crisis has tended to accentuate the tension between the need to reduce public spending and the need to keep the growth of inequalities under control. At this point, where recentralisation has been based on a particularly drastic reduction of resources – the Greek case appears to be the most dramatic example of this process ⁸ – we observe both a strong reduction in classical redistributive welfare (pensions, health care and so on) and a process of the selective degradation of innovative and local welfare which, instead of developing targeted services for individual activation, is oriented towards filling the gap in national social protection in favour of specific social groups. Many third sector and private social organisations are playing an important innovative role in supporting the most disadvantaged part of the population and in implementing new forms of solidarity. However these experiences have a limited, temporary and unequal capacity of intervention that become reflected in new tensions and inequalities (Borghi, 2014; Papadopoulos and Warin, 2007).

The crisis has tended also to reactivate the familisation of responsibility for care and social protection (which in previous decades characterised, above all, the post-socialist transition in the countries of eastern Europe) particularly where opportunities for female employment are weak and in decline. In these cases, the crisis has not only accentuated tensions in relation to social inequalities – it is worth remembering, for example, the crucial role that quality early childcare plays in compensating for the cultural disadvantage of children born in situations of low incomes and educational attainments – it has also suffocated or deviated the process of female emancipation (Esping-Andersen, 2009), setting in motion a vicious cycle in which the reduction in employment opportunities for women leads to forms of refamilisation of care that further depress employment opportunities. As a result, in many cities in southern and eastern Europe, in which the employment crisis initially had a disproportionate impact on men (working in construction and in certain forms of manufacturing), since 2012 it has started to also penalise women (Vaiou, 2014).

Welfare innovation has a local dimension which corresponds partly to the overload of new citizen demands and new risks, but is not able to keep inequalities under control, leading to a deficit in relation to social citizenship rights. The crisis is heightening this tension because it simultaneously makes innovations in local welfare more important, in order to satisfy unmet needs, and more difficult due to the rigid and suffocating control exerted by the central state over resources.

Standardised national welfare, more than being a luxury that we can no longer afford, is a protective system which is increasingly less effective in heterogeneous, unstable and individualised social contexts. But the forms of transition towards the ‘new welfare’ and, in particular, local systems of protection founded on vertical and horizontal subsidiarity tend to accentuate social inequalities and discrimination against vulnerable groups which are under-represented in political terms.

The transition in order to go beyond the limits of the standardised system of Marshallian rights (Evers and Guillemard, 2013a) is turbulent and uncertain. A new welfare centred on activation, local provisions, social investments, de-bureaucratisation and new forms of solidarity of various kinds may be the outcome of the process of change. But the forms and features this new welfare and this new system of rights will take depend highly on the mobilisation and activation of citizens within new emancipation movements (Bifulco, 2014; Fraser, 2011; Welzel, 2013). This is an issue that is a crucial focus for research and debate on the perspectives of welfare systems in industrialised countries. In fact the future systems of rights and social protection are shaped by the combination between the tensions produced by the process of change at the local level, that we have been dealing with here, and the active mobilisation of citizens to confront them. The outcome at the present time looks very fragmented and unequal, but is also loaded with numerous innovative and inclusive opportunities that can contribute to construct new forms of solidarity and protection in an increasing heterogeneous, destandardised and unstable society.