The NRRP and the challenges for Italian municipalities

To what extent are municipalities involved in the National Recovery and Resilience Plan? Where is the greatest concentration of municipal investment needs? What are the main issues that could impede the management of the additional resources set to arrive? The report analyses the opportunities and challenges that the NRRP sets before municipalities and presents an estimate of their investment needs that have remained partly unmet in recent years.

Read the key messages and download the report for further information.

• The National Recovery and Resilience Plan (NRRP) envisages the direct involvement of municipalities in the implementation of projects worth at least €30 billion by 2026, which could rise to around €50 billion depending on the volume of central government projects that involve local authorities in the implementation phase.
• This flow of funds could meet, at least in part, the municipal investment needs which have remained partly unmet in recent years, bearing in mind that municipalities' capital expenditure has fallen by an average of 3% per year over the last 15 years.
• However, if the quantitative issue is of relevance, the qualitative one is even more important, i.e. "where" and "how" these funds will be used.
• On one hand, the analyses carried out in this brief show that the unmet need for investment is not uniform across the country and, in particular, is greater in municipalities with the following characteristics:
  • a younger population;
  • a greater distance from the main transport arteries;
  • a recent reduction in the number of public sector staff;
  • a low number of specialised staff in municipal offices.
• On the other, the volume of incoming funds, which is particularly high compared to the amount traditionally managed by municipalities, requires an efficient way of using them. Full utilisation would require an increase of at least 60% in municipalities’ annual investment capacity.
• Local administrations are therefore in danger of being unprepared, due to a shortage of staff in both quantitative and qualitative terms. It is therefore necessary to strengthen and support the structures involved in the design and contracting of works.
• Indeed, on average it takes municipalities three times longer to complete these phases than to carry out the works.