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TERRITORIAL

ORGANISATION

OF THE GREATER PARIS

METROPOLIS

Review and outlook

Public thematic report

January 2023

Abstract

The Greater Paris Metropolis (MGP), which was created on 1 January 2016, comprises

130 municipalities (123 municipalities in the Hauts-de-Seine, Seine-Saint-Denis and Val-de-

Marne departments, 6 municipalities in the Essonne department and 1 municipality in the Val-

d'Oise department) and the City of Paris, representing a total population of over seven million

inhabitants, which is divided into 12 territories. The decision to create the MGP was taken after

a long-standing series of discussions that unfolded throughout the second half of the 20th

century as the level of urbanisation around the capital's boundaries continued rising and the

need to organise the development of the Parisian metropolitan area steadily climbed the public

policy priority list. In the 2000s, the Mayor of Paris brought the issue back to the discussion

table. It was addressed as part of the global reform programme spearheaded by the State,

specifically the law of 27 January 2014 on the modernisation of territorial public action and the

creation of metropolises (MAPTAM), and the law of 7 August 2015 on the new territorial

organisation of the Republic (NOTRé), with the aim of completing the nationwide network of

public agencies for intermunicipal cooperation with a proprietary taxation system and

institutionalising the metropolises.

Municipalities of the Greater Paris Metropolis

Source: Institut Paris Région 2020

Missions of the MGP:

insufficient implementation

The Greater Paris Metropolis was created with the goal of "improving living standards for

its inhabitants, reducing inequalities between the different communities within the metropolitan

area, and developing a sustainable urban, social and economic model to increase the appeal

and competitive advantage of the entire national territory" (Article 12 of the MAPTAM law).

The first obstacle that stands in the way of the metropolitan area's development is the

major level of territorial, social and economic inequalities from one community to another. With

its rich and powerful economy, it is home to most of the business clusters in Île-de-France,

especially in the western part of the region. However, there are significant disparities among

the population when it comes to income. Poverty and poor housing are also an issue. The

MGP includes the department with the lowest household income (Seine-Saint-Denis) and the

two departments with the highest incomes (Paris and Hauts-de-Seine). In addition, the chasm

is widening, which is leading to considerable differences in terms of resources and costs

between local authorities, despite the financial equalisation measures that have been taken.

Poverty rate in 2020

Source: INSEE

In an effort to bring greater balance to the development of its territory, the law has given

the MGP compulsory powers in several key areas, including metropolitan spatial planning,

local housing policy, economic, social and cultural development and planning, protection and

promotion of the environment, and living standards policy. Since 2016, the MGP has been

relatively slow in translating those powers into action, and it still has a long way to go. Seven

years after its creation, the MGP is still not fully exercising the responsibilities vested by the

legislator.

In January 2022, it defined its first territorial coherence plan which, according to central

government services, lacks binding force and territorial focus. Although it includes the

objectives of the Île-de-France region's master plan and the regional housing and

accommodation plan in terms of creating new housing units (38,000 a year), especially social

housing, it fails to enforce those objectives in each municipality and territory. These

weaknesses give cause for concern, because the territorial coherence plan (which was subject

to a public enquiry before receiving final approval) is supposed to reflect the shared vision of

the territory's future and serve as a blueprint for all other planning documents across the

metropolitan area.

Review of the territorial coherence plan

Source: Institut Paris Région

The MGP has also failed to agree on the terms for its metropolitan housing and

accommodation plan. In June 2018, a draft version was submitted to the Metropolitan Council.

Members voted in favour of the plan, but it was not adopted, and central government services

have identified a number of shortcomings. Without an enforceable plan, the metropolitan area

is missing out on the extensive powers that the law has granted for coordinating local housing

policies. As such, those housing policies are still pursued under the old system, mostly by the

municipalities.

As a result, the MGP is prevented from playing a strategic role in shaping housing and

accommodation policy across its territory, even though this was one of the fundamental

reasons why the legislator decided to ratify the creation of the MGP.

In terms of urban planning and development, the law allows the MGP to take ownership

of any operation that it considers to be in the interests of the metropolitan area based on a vote

by its deliberative assembly. Otherwise, responsibility is automatically vested in the relevant

regional public institution. However, of all the operations that are currently in progress, the

metropolis has only declared one as being in the metropolitan area's interests (the Docks

mixed development zone in Saint-Ouen), and of all the new operations waiting to be launched,

the metropolis has only identified six. In light of the growing chorus of calls for housing and

residential mobility, several development initiatives could actually be serving the metropolitan

area's interests. Nevertheless, the metropolis has chosen to exercise a minimal amount of its

powers,

meaning that the City of Paris and the municipalities have retained control over any

metropolitan-wide operations.

At the same time, the MGP lends its financial backing or technical support to certain

projects without actually having the authority to do so, due to the lack of awareness about

whether those projects serve the metropolis's interests. The calls for urban development

projects that have been launched since 2016 as part of the "Inventing the Greater Paris

Metropolis" scheme are a prime example. Despite reaching a wide audience, they are out of

alignment with the strategic directions for achieving annual housing supply targets or restoring

the status quo between the eastern and western parts of the metropolis.

But when it comes to moving the ecological transition forward, the metropolis has

harnessed its powers to tackle air pollution by means of the metropolitan climate-air-energy

plan (PCAEM) that was adopted in November 2018. Therefore, it can play a role in coordinating

the initiatives led by the local authorities within its jurisdiction in line with the objectives of the

regional climate, air and energy plan. For instance, it has established a low emission zone

(LEZ) within the perimeter of the A86 motorway, where Crit'Air 4 vehicles (petrol vehicles over

24 years old and diesel vehicles over 15 years old) have been banned since 1 June 2021.

Low emission zone (LEZ)

Source: MGP, 22 December 2021

Finally, the MGP has not delivered on redistributing income and wealth between the

communities in its area. It has failed to make sufficient use of the equalisation schemes

available, such as community outreach allowances, grants to support local investments, and

the metropolitan investment fund.

Organisation of the metropolitan area at odds with the MGP's

stated strategic role

The territorial organisation of the Greater Paris Metropolis is the result of a hard-fought

compromise in Parliament in favour of creating a unique institutional system compared to the

country's other metropolitan areas, including those that have also been granted special status

(Lyon and Aix-Marseille-Provence). Although the MAPTAM bill defined the new metropolitan

institution as a public establishment comprising the City of Paris and the agglomeration

communities (known as the "Daisy" model), the law actually adopted gave it the status of a

public agency for intermunicipal cooperation with a proprietary taxation system, whose

members include the City of Paris and the municipalities of the Hauts-de-Seine, Seine-Saint-

Denis and Val-de-Marne departments. The law had also given the MGP a number of

"territories" without any legal personality (the "Metropolis" model). The advent of the NOTRé

law some 18 months later amended this system and created a hybrid and complex model. The

MGP is still a public agency for intermunicipal cooperation with a proprietary taxation system,

whose members are its municipalities, but its jurisdiction is now subdivided into 12 "territories",

one of which corresponds to Paris while the other 11 territories are granted their own legal

personality and organised as regional public institutions, which can be compared to joint

municipal authorities. Therefore, the Greater Paris Metropolis represents the apex of a three-

tiered non-pyramidal organisation: each municipality is a member of both the MGP and a

regional public institution, which do not have an institutional relationship between them. If the

region and departments are included, this territory is covered by five different levels of local

government.

This reform may have been instrumental in extending intermunicipal action, which had

long been delayed within the Parisian metropolitan area. However, the metropolitan area's

boundaries exclude the major economic hubs (Roissy airport, the Plateau de Saclay hi-tech

hub and Disneyland Paris in Marne-la-Vallée), whose interconnection with the "dense zone"

will become even clearer when the Grand Paris Express project is completed. Above all, the

institutional organisation that has been chosen for the Greater Paris Metropolis appears to be

detrimental to its governance structure.

The MGP:

a "metropolis of mayors"

With the exception of the City of Paris, the 130 municipalities within the metropolis are

members of both the MGP and a regional public institution, meaning that mayors are central

to the metropolitan area's organisation. Sitting in the deliberative assemblies of these two

intermunicipal bodies, which have been deliberately separated by the legislator, mayors are

the driving force behind the metropolitan area's governance and the sole arbiters when defining

territorial or metropolitan policies.

It is paradoxical to have given mayors such a predominant role in governing the MGP,

whose major responsibilities concern such issues as spatial planning, housing and economic

development where, according to the texts, the regional public institutions have authority and

not the municipalities.

The problem is exacerbated by the fact that the municipalities belonging to the MGP vary

tremendously in terms of their respective populations (from 1,800 inhabitants in Marnes-la-

Coquette to 2.2 million inhabitants in Paris), their socio-economic characteristics (average

household income, unemployment rate, poverty rate, etc.), their economic development and

their respective levels of wealth (fiscal capacity and level of charges). Converging and aligning

interests in terms of urban, housing and economic development within such a heterogeneous

group is an uphill struggle.

The MGP's executive has opted for a "shared governance structure", which means that

the broadest consensus among the different municipalities must be obtained for most of the

deliberations submitted to the vote of the Metropolitan Council. This process of systematically

striving to reach almost unanimous approval from the municipalities favours the emergence of

the lowest common denominator. It is not conducive to developing a real territorial project, as

demonstrated by the decision to postpone the metropolitan housing and accommodation plan

and the decision to adopt a draft territorial coherence plan that is more indicative than it is

prescriptive.

Another weakness in the governance structure for the metropolitan area's organisation

is the lack of institutional relations between the MGP and the regional public institutions. The

MGP's governance agreement, as required by law, should make provisions for consulting with

the regional public institutions with the aim of giving greater consideration to their role in the

development of the metropolitan territory. It should also clarify the relationship between the

MGP and the City of Paris, which is pursuing its own metropolitan strategy through cross-

border and bilateral cooperation in various projects as part of agreements with other local

authorities (municipalities and regional public institutions). It supports the MGP, but does not

transfer any projects that are clearly in the metropolitan area's interests.

The MGP:

a budgetary dwarf

The institutional organisation chosen by the legislator leads to highly complex financial

flows between the three tiers of the metropolitan area. Their definition was dictated by the

principle of financial neutrality. In other words, the municipalities had to keep the resources

that they possessed before the MGP was created, and the regional public institutions had to

have the same resources as the agglomeration communities that preceded them. Therefore,

the MGP pays (instead of the previous agglomeration communities) the compensation

allocations to the municipalities which, in turn, pay territorial charge compensation funds to the

regional public institutions, which pay a balancing allowance to the MGP. This financial

organisation is extremely difficult to understand for elected representatives and citizens alike.

Financial circuits between metropolitan stakeholders

Source: Institut Paris Région

Above all, it leaves the MGP with its own funds that seemingly pale in comparison to its

financial resources. It collects the proceeds from economic taxes (€1.3

billion), State subsidies

(€1.22

billion) and balancing allowances from the regional public institutions (€0.93

billion). At

first glance, its budget (€3.47

billion in 2020) cements its place among the largest local

authorities in the Île-de-France region, behind the City of Paris and the region. However,

appearances can be deceptive, since the MGP transfers almost all its resources to its member

municipalities in the form of compensation allocations. Consequently, its "own budget" has

varied between €50 million and €100 million since its creation.

Its operating expenses are limited, especially its overheads and governance costs (90

employees and €20

million in 2020). Its invest

ment expenses, which climbed from €5

million

in 2016 to €77

million in 2020 and €123

million in 2021, are still marginal when compared to

the metropolis as a whole (almost €7

billion for all the local authorities combined). Such

investment expenses mainly comprise facility subsidies and financial holdings. The MGP rarely

acts as the owner for the projects that it supports (with the notable exception of the project to

build the Olympic Aquatics Centre in Saint-Denis ahead of the 2024 Olympic and Paralympic

Games). Its investment subsidies are paid from the Metropolitan Investment Fund (FIM) or

other theme-based funds. Nearly all the municipalities and regional public institutions benefit

from the fund. The average subsidy amount (€200,000) suggests that there

is a low leverage

effect and a scattering risk.

In all, the weakness in the MGP's capacity for action can be attributed to the financial

organisation stipulated by law, but also to the choices shared with its member municipalities.

The extent of the weakness is proportional to the narrow range of powers that they have agreed

to transfer to the MGP.

Establishing regional public institutions is not conducive to developing

intermunicipality on a territory-wide scale

Variable and often incomplete transfers of powers by the municipalities

The 11 regional public institutions have their own powers in five areas: the intermunicipal

urban development plan, city policy, sanitation and water, management of household and

similar waste, and the territorial climate-air-energy plan (compatible with the metropolitan

plan). Two powers require the definition of a territorial interest, namely the construction and

management of cultural, socio-educational and sports facilities, and social welfare.

According to the texts, the powers of the regional public institutions are similar to those

of the agglomeration communities. As it transpires, they are invariably wide-ranging, since the

intention of their member municipalities to cooperate in partnerships

varies according to

whether there is already a well-integrated agglomeration community or otherwise several

"isolated" municipalities. Furthermore, in proportion to their respective populations, the

expenses of the regional public institutions vary within a ratio of one to nearly five.

They often provide a minimal

definition of the territorial interest for their sports and

cultural facilities to avoid transferring those facilities.

Similarly, although the distribution in powers is subject to variation, social housing

policies are often led at the municipal level, except when they have already been transferred

to a pre-existing agglomeration community. While responsibility for supervising public housing

offices has been transferred to the regional public institutions, the municipalities are

endeavouring to keep control of their social housing assets, such as by transferring them to

public-private partnerships under their control.

They also tend to retain control of their development initiatives, although legislation has

given the regional public institutions authority under ordinary law in this particular area, except

for operations recognised as serving the metropolitan area's interests. In this respect, they take

advantage of the uncertainties surrounding the legal definition of what constitutes a

development initiative in pursuance of the French Town Planning Code, and advantage of the

option of maintaining a stake in the capital of the local public development companies.

Regional public institutions financially dependent on the municipalities

Regional public institutions dedicate their operating expenses (€1.6 billion in 2020,

excluding the balancing allowance paid to the MGP) and their investment expenses (€0.45

billion) mainly to urban services (waste, water and sanitation), urban development, culture,

sports and youth.

As intermunicipal associations and not public agencies for intermunicipal cooperation

with a proprietary taxation system like the agglomeration communities, the regional public

institutions have little leeway for balancing their revenue and expenditure. They have no power

over local tax rates and no control over the development of their resources. Their operating

revenue (€2.75

billion in 2020) is highly dependent on the territorial charge compensation

funds paid by th

eir member municipalities (€0.99

billion), which represent the predominant

share of their resources, ahead of the business property tax (€0.89

billion) and household

waste collection tax (€0.45

billion). However, the territorial charge compensation fund is a rigid

revenue source with an especially complex calculation method over which the regional public

institutions have no direct control.

In addition, the municipalities have often deprived regional public institutions of their rare

budgetary leeway, such as by increasing the compensation allocations in the year prior to the

creation of the MGP, failing to pass on the growth in local taxes, and transferring part of the

municipalities' contributions towards the intermunicipal equalisation funds to the regional public

institutions.

The need for a progressive but ambitious reform

to the territorial organisation of the Greater Paris Metropolis

The territorial organisation of the Greater Paris Metropolis needs to be reformed. The

powerlessness of the metropolis and its separation from insufficiently integrated regional public

institutions are delaying the ability to engage policies that are a priority for the area and its

inhabitants, bearing in mind that their capacity for action currently depends on financial

resources over which they have little control.

The timetable for implementing such a reform to the organisation of the Greater Paris

Metropolis must take account of the headway actually achieved in the projects currently

underway, particularly by the regional public institutions, as part of the country's economic

recovery plan, and also those projects associated with preparing for the 2024 Olympic and

Paralympic Games, completing the development operations relating to the Grand Paris

Express scheme, and leading the policy of adapting to climate change.

The Court of Accounts has therefore endeavoured to identify short-term adjustments that

could improve the governance structure, strengthen intermunicipal integration and rebalance

the region. These objectives involve clarifying the framework (established by the governance

agreement) that defines relations between the metropolis and the regional public institutions,

consolidating the financing arrangements for the regional public institutions, making provisions

for an investment support fund between the regional public institutions and municipalities, and

setting up mechanisms that allow for greater financial equalisation between the local

authorities in the metropolitan area.

In the medium term, most of the reform scenarios involve major institutional

readjustments, which fall within the legislator's remit. Two of the scenarios could raise a

number of problems when it comes to putting them into practice, especially garnering the

support of the local elected representatives, all of which with an uncertain outcome. Those

scenarios involve creating a metropolitan region and merging the metropolis with the

departments within Paris's inner suburbs.

Therefore, three main scenarios remain. Abolishing the regional public institutions and

transferring their powers and resources to the MGP would simplify the process, but would

further increase the perception of creating a "metropolis of mayors". Establishing a metropolis

featuring the City of Paris and regional public institutions classed as public agencies for

intermunicipal cooperation with a proprietary taxation system would provide a real advantage,

particularly in terms of governance. A more ambitious reform would be to create a metropolis

comprising the departments within Paris's inner suburbs, which would absorb the powers of

the regional public institutions. This solution would streamline the territorial organisation of the

Greater Paris Metropolis and rebalance its governance structure against the weight of the city

centre.

Reorganisation scenarios

Reform scenarios

Main characteristics

The regional public institutions are

abolished, and their powers and

resources are absorbed by the

MGP.

"Metropolis" model defined in the MAPTAM law

Advantages:

Simplify the institutional and financial organisation;

reinforce the MGP's resources and missions.

Disadvantage:

Risk of perpetuating and even accentuating the

perception of a "metropolis of mayors".

The MGP comprises regional public

institutions

classed

public

agencies

for

intermunicipal

cooperation

with

proprietary

taxation system.

Initial "Daisy" model

Advantages:

Simplify governance of the MGP, which would then be

shared between the City of Paris and 11 equally sized

regional public institutions instead of 130 highly

dissimilar municipalities.

Reinforce intermunicipality across the regional public

institutions in terms of governance and financial

resources.

Disadvantage:

Difficulty in gaining support from the mayors who, with

the exception of Paris, would be replaced with the

presidents of the regional public institutions within the

Metropolitan Council.

The

MGP

comprises

the

departments within Paris's inner

suburbs, which would absorb the

powers

the

regional

public

institutions.

Advantages:

Remove one of the territorial levels.

Rebalance the governance structure against the weight

of the City of Paris.

Greater alignment between social policies.

Disadvantage:

The difficulty of managing community-level facilities and

services on a departmental scale,

which

were

previously managed by the regional public institutions,

and the ensuing risk of a fall in intermunicipal

integration.

Source: Court of Accounts