Ukraine’s decentralisation reforms

Approximate read time: 15 minutes

The House of Lords is scheduled to consider the following question for short debate on 9 July 2026:

Lord Risby (Conservative) to ask His Majesty’s Government what assessment they have made of Ukraine’s decentralisation reforms; and what steps they are taking to support municipal partnerships as a contribution to Ukraine’s recovery, resilience and reconstruction.

1. Key points

• Ukraine has made significant progress towards reforming its public sector and decentralising power towards the local and regional level.
• Despite the ongoing war, Ukrainian institutions have shown remarkable resilience which some attribute—at least in part—to its governance reforms.
• However, significant challenges remain. The Ukrainian civil service is experiencing staffing and skills shortages, concerns remain over sub-national governance, and wartime pressures and a fiscal reorientation towards defence has placed additional strains upon public services.
• Observers have called for further governance reforms to increase public trust and provide greater strategic leadership and coordination in key policy areas.

2. Governing in a time of war

The war in Ukraine has now lasted longer than the first world war.^[1] The prolonged fighting has placed significant strain on the Ukrainian state. A recent OECD report highlighted both the impact of the war, and the resilience shown by Ukrainian institutions:

Ukraine’s governance system has demonstrated extraordinary resilience in the face of Russia’s war of aggression, which, since February 2022, has caused more than 15,000 civilian casualties, displaced nearly 6 million citizens abroad, and inflicted direct damage exceeding USD 170bn. Despite these pressures, Ukraine has maintained functioning institutions, continued implementing public administration reforms and regulations, and advanced its EU accession agenda.^[2]

Some have credited Ukraine’s efforts to decentralise the state and reform democratic institutions as part of the reason for this resilience.^[3]

However, the OECD is among those who have said further reforms are required:

[…] the war has deepened structural vulnerabilities, eroding public trust, straining fiscal capacity, and widening gaps in strategic co-ordination, that sustained governance reform must address.^[4]

3. Decentralisation and public sector reforms in Ukraine

Since 2014, Ukraine has been conducting a political decentralisation process to devolve and delegate more powers from the national to the municipal level. Valentyna Romanova and Andreas Umland for Chatham House note this has involved wide-ranging structural reforms:

In 2014–15, reformers launched a battery of simultaneous changes aimed at improving multi-level governance, promoting subnational democracy and fostering local economic development. Their ambitious and comprehensive decentralisation plan aims to empower local self-government, as well as to redraw the country’s administrative-territorial map so as to improve the state’s capacity to deliver public services.^[5]

The reforms were proposed in the 2014 ‘Concept of the reform of local self-government and territorial organisation of power in Ukraine’ and its related action plan. The Centre of Expertise for Multilevel Governance at the Council of Europe said this provided “critical guidance” for legislative and executive actions:

Structured around identifying problems, defining goals, and establishing principles, objectives, and phases, the Concept addressed issues like inconsistent public services, limited local decision-making power, and weak mechanisms for direct democracy. Its four main priorities were to improve service accessibility, clarify division of authority between local and state entities, restructure territorial governance, and ensure adequate financial resources for local authorities.^[6]

Among these reforms was amending the Ukrainian budget code to provide direct transfers from the Ministry of Finance to villages and cities that voluntarily amalgamated into local self-governments, so called ‘territorial hromadas’.^[7] Helge Arends et al, for the Centre for Economic Policy Research, note this independence from local branches of national administration allowed these newly formed local governments to receive 60% of the personal income tax collected within their jurisdiction. The first hromadas were formed in 2015 and by 2020, Arends et al note that all 1,470 new Ukrainian local governments had been formed. Additional decentralisation occurred in February 2015 with the adoption of a law concerning the voluntary amalgamation of over 11,000 villages into new hromadas which were in turn empowered by receiving more responsibilities.

Romanova and Umland also cite the growth of municipal partnerships and coordination between local and regional authorities which has taken place since 2014:

2014 and 2024 laws on “Inter-Municipal Co-operation” and “International Territorial Co-operation” have enabled significant inter-municipal and international partnerships. By mid-2024, 744 communities had signed 495 inter-municipal agreements, while 485 communities established over 2,000 international agreements, enhancing resource sharing and best practice adoption.^[8]

Ukraine has also implemented a significant programme of public sector reform as part of its ‘Strategy for public administration reform in Ukraine for 2022-25’.^[9] The Ukrainian government suggests such reforms have been designed to build “a modern, digital, service-oriented state”.^[10] Key elements include the Diia digital platform—Ukraine’s flagship government app providing access to over 150 public services and which has over 20 million registered users—and measures intended to increase the professionalism and development of the Ukrainian civil service. The OECD notes that Ukraine had already completed the “vast majority” of actions under the reform strategy by 2024, including the expansion of administrative service centres (ASCs) and the digitalisation of key public services through the Diia platform.^[11]

In addition, a new law on public consultations was adopted in 2024 to drive participation, and in 2025 the Verkhovna Rada (the Ukrainian parliament) passed the ‘Amendments to Certain Laws of Ukraine Regarding Democracy at the Local Self-Government level’ to align national and sub-national public consultation processes.^[12] This law established formal requirements for citizen participation and provided an expanded account of the different forms of participation that local governments can employ. A significant salary reform for civil servants was also signed into law in June 2025.^[13]

However, significant problems reportedly remain. The Centre of Expertise for Multilevel Governance, for example, has drawn attention to concerns over governance at oblast and rayon levels (larger territorial districts).^[14] The OECD also notes that despite “outstanding commitment” from civil servants throughout the war, merit-based recruitment has been suspended, around 31,600 posts remain unfilled (as of June 2026), and skills shortages are “acute”.^[15] The OECD further notes that wartime pressures continue to “strain institutional capacity”, including through staff losses, whilst additional pressures have come from fiscal reorientation toward defence, and constraints on transparency under martial law, which has been imposed in the country since 2022.

The OECD also suggests that weaknesses in existing planning structures and responsibilities could have significant impacts on the country’s ability to recover from the war and rebuild:

Effective strategic planning is a prerequisite for Ukraine’s recovery: without it, reconstruction risks being fragmented, donor-driven, and disconnected from the country’s long-term development ambitions. Ukraine has demonstrated commitment to building a more coherent planning system, and important foundations are in place. However, institutional responsibilities remain blurred, planning documents lack a clear order of priority, and the links between strategy, budgeting, and performance are underdeveloped. Strengthening these connections is essential if Ukraine is to translate its political commitments into funded, accountable action, and to ensure that recovery serves as a springboard for long-term reform rather than a temporary fix.^[16]

The OECD makes several recommendations in its report aimed at strengthening Ukrainian institutions. They include:^[17]

• increasing transparency and public accountability over recovery planning and clarifying institutional leadership
• ensuring restrictions introduced under martial law are applied transparently and proportionately, with a clear post-war roadmap for restoring freedoms
• resuming merit-based, open and transparent recruitment competitions in the Ukrainian civil service as soon as security conditions permit

On the subject of devolution, the OECD also recommended the “revival” of co-ordination bodies such as the Inter-Departmental Commission for Regional Development, with municipal participation. It also said in areas like planning, for example, further changes could be made to ensure that national objectives cascade consistently to sectoral, regional, and local levels.^[18]

4. Governance in the context of Ukraine’s desire to join the European Union

Ukraine continues to pursue membership of the European Union, which will require it to adhere to various criteria on governance and the rule of law.^[19] To that end, Ukraine has been praised for high-profile anti-corruption investigations, including that against Ukrainian’s President Volodymyr Zelensky’s chief of staff, Andriy Yermak.^[20]

However, it has also been criticised for slow progress towards the 10-point plan agreed in December 2025 between the EU enlargement commissioner, Marta Kos, and the Ukrainian deputy prime minister, Taras Kachka.^[21] The statement issued following the meeting between Marta Kos and Taras Kachka said:

Ukraine’s European path remains grounded in a shared commitment to integrity, democratic institutions, and the rule of law. Even in the face of extraordinary challenges stemming from Russia’s war of aggression, Ukraine continues to show determination and resilience in advancing reforms that strengthen transparency, accountability, and public trust. These efforts are essential to its EU accession process and reflect the country’s commitment to meet the obligations of membership.

We welcome the adoption by Ukraine of the roadmaps on the rule of law, on public administration, and on democratic institutions, as well as an action plan on national minorities, all positively assessed by the Commission.

Ukraine reaffirms its commitment to implementing the recommendations of the 2025 enlargement report, particularly in the fundamentals cluster, as well as the roadmaps on rule of law, public administration reform, and the functioning of democratic institutions, together with the action plan on national minorities. Ukraine also underlines that opening the fundamentals cluster is essential for consolidating reforms in these areas.^[22]

The 10-point plan also includes measures to strengthen the independence of the National Anti-Corruption Bureau of Ukraine (Nabu) and the Specialised Anti-Corruption Prosecutor’s Office (Sapo), the adoption of an anti-corruption strategy and reforms in the appointment processes for judges and prosecutors.

Yet according to recent reporting, European officials believe that Ukraine has only completed 15% of the reforms in the plan to date.^[23]

5. UK government perspective

The UK government has provided aid to Ukraine for military and non-military purposes, including to bolster Ukraine’s economic stability and support public services. As of June 2026, that aid was worth up to £21.8bn, broken down as follows:

• £13bn in military support (including the £2.26bn ERA [extraordinary revenue acceleration] loan contribution)
• up to £5.3bn in non-military support (including bilateral assistance and fiscal guarantees)
• £3.5bn cover limit in export finance (via UK Export Finance for reconstruction and defence projects)^[24]

Specifically on recovery and reconstruction, the UK has provided the following support:^[25]

• Contributions to the Multilateral Investment Guarantee Agency (MIGA), part of the World Bank group, and to the European Bank for Reconstruction and Development (EBRD), continue to expand critical war risk insurance cover, boosting trade and investment into Ukraine.
• Providing a £3.5bn cover limit in export finance via UK Export Finance to support critical reconstruction projects in Ukraine. The government states that this support has enabled the reconstruction of six key bridges in the Kyiv region and the delivery of mine countermeasure vessels.
• Working through British International Investment (BII) in partnership with the EBRD to make trade finance available to support critical imports and exports to and from Ukraine. The government states that BII will provide €30mn for MHP, a Ukrainian agribusiness, to safeguard jobs and boost resilience in the food and agriculture sectors.
• Providing £10.5mn for the governance reform programme to support efforts on rule of law, justice and anti-corruption.
• A £25mn social recovery programme to support Ukraine to build more inclusive and efficient social protection systems and revitalise community and family-based services.
• A £50mn economic recovery programme to unlock private lending to bolster the growth and resilience of small and medium businesses in Ukraine. (This was announced in two tranches: £40mn announced 12 January 2025 and a further £10mn announced 5 February 2025.)

The government was recently asked whether it would encourage allocation of resources for supporting local government in Ukraine at the Ukraine Recovery Conference in Gdansk, Poland, which took place on 25 and 26 June 2026. In response, minister of state at the Foreign, Commonwealth and Development Office Stephen Doughty said:

The UK remains steadfast in our support to Ukraine, having provided £21.8bn in military and non-military assistance since the start of the full-scale invasion. This includes support for Ukraine’s recovery and reconstruction, including through our £5.3bn of non-military support, covering fiscal, humanitarian, energy, stabilisation, reform, and economic and social recovery. We will continue to work with Ukraine and international partners, including via the Ukraine Donor Platform and the Ukraine Recovery Conference in Gdansk, to help mobilise finance for a sustainable and locally led recovery, including by supporting stronger regional and local capacity and work on project preparation to help speed up the development of shovel ready infrastructure projects.^[26]

In response to a further question about the 2025 UK-Ukraine Partnership Agreement, also known as the 100 Year Partnership Agreement, ^[27] the government also said it wanted to see more UK local authorities twinning with their Ukrainian equivalents:

We want more local authorities to twin with Ukrainian counterparts to enable cooperation that delivers material benefits for people in the UK and Ukraine. Local authorities have already: hosted Ukrainian medical professionals in UK hospitals to facilitate exchanges of expertise, supported business exchanges, engaged on sustainable and resilient urban development/reconstruction, shared lessons learned for fostering local culture and attracting tourism, and donated lifesaving equipment (eg fire engines to Ukraine). The Foreign, Commonwealth and Development Office works closely with Ministry of Housing, Communities and Local Government and colleagues in local government to ensure that this engagement supports the broader goals of the UK-Ukraine 100 Year Partnership and to provide support when necessary. We are also encouraging other institutions including universities, and schools to twin with their Ukrainian counterparts to ensure that the benefits of the 100-Year Partnership are shared as widely as possible across the UK and Ukraine.^[28]

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