A. Armonaitė: Research shows municipalities need to improve business supervision
For the first time, the Ministry of the Economy and Innovation has conducted a study on business supervision in 15 Lithuanian municipalities. It showed that municipal business supervision does not yet meet the standards of modern business supervision, but there are positive aspects.
"A significant proportion of businesses deal with municipal business supervisors: every year, municipalities issue around 12,500 permits for the installation of outdoor advertising and around 14,000 permits for trading in public places. Municipal supervision of business activities must therefore be effective and contribute to improving conditions for businesses, helping them to operate rather than hindering them.
The EIMIN study shows that there is still room for improvement - municipalities have uneven competences in the area of business supervision and need support and coordination either from the relevant ministries or from the Lithuanian Association of Municipalities. Other public oversight bodies at central level working in the same area of supervision would also help municipalities," says Aušrinė Armonaitė, the Minister of the Economy and Innovation.
The most common difficulties for municipalities are related to the lack of data on supervised companies and the lack of systematic risk assessment. As many as 86% of the municipalities surveyed carry out inspections in response to notifications without warning the business. In a quarter of the municipalities surveyed, all complaints are responded to without categorisation and risk assessment. The situation of business supervision is better in areas where the ministries have established procedures for carrying out supervision.
The study found that municipalities should improve their business supervision activities and increase the effectiveness of supervision: publishing inspection rules and plans, giving advance notice of planned inspections, paying more attention to new businesses, and using inspection questionnaires in inspections. Municipalities should also monitor and measure the effectiveness of supervision - the extent to which supervision has contributed to the protection of protected public assets.
"The progress of Lithuanian central-level business supervisors has systematically increased since 2020: their average progress score has increased by 11%, from 6.48 to 7.2. In addition, the number of supervisors with the highest progress scores has increased by 50%. We therefore want to see a significant improvement in the performance of Lithuanian municipalities in the area of business supervision. We have therefore initiated a training course on the basics of business supervision for municipal staff, which has already been attended by more than 230 municipal representatives. We believe that this will contribute to faster progress and better results in municipal business supervision," says Ieva Valeškaitė, Vice- Minister of the Economy and Innovation.
Despite the identified shortcomings, some municipalities are also applying good practices of advanced business supervision. Soft supervision measures such as consultations, recommendations, preventive media announcements are used instead of penalising businesses.
Alternative counselling tools such as leaflets or memos are also used, as well as innovative digital tools for business consultation, such as the use of a virtual chat function on the consultation website. Municipalities organise lectures according to the risk level of the activity, and business advice is provided live or remotely and via social networks.
Some municipalities use monitoring measures other than inspections following a complaint. The most common are advice and recommendations (usually by telephone), verbal warnings and preventive notices. This is also considered good practice in business supervision.
Since 2018, the Ministry of Economy and Innovation has been working on a systematic assessment of business supervision authorities - the 'scoreboard' - but until last year, the scoreboard survey only assessed authorities at the central level.
In 2023, the Ministry conducted a survey of municipalities to assess which municipalities perform business supervision functions and to what extent, and which modern business supervision tools they use. The 15 municipalities with the highest number of registered active enterprises were surveyed, and a random sample of municipalities was also selected.
The municipalities participating in the survey were Alytus district, Druskininkai district, Ignalina district, Kaunas city and district, Klaipėda city and district, Panevėžys city, Mažeikiai district, Marijampolė city and district, Šiauliai city and district, Vilnius city and district and Zarasai district.
Municipalities ensure the protection of public interests by monitoring businesses in the areas of consumer protection, construction safety, public health, environmental protection, traffic safety, public safety and cultural protection.