Prime Minister Ishiba announces “doubling of local development grants” ⇒ Consultants flocking to the grants & local governments being preyed upon… What is the solution?

Satsuki Katayama: “It’s getting to the point where it’s like, ‘You’re paying for consultants…'”

One of the policies that Prime Minister Shigeru Ishiba called for in the recent lower house election, in which the LDP suffered a crushing defeat, was to “restart regional development.

It was in 2002 that the government launched its regional development program with the aim of overcoming the decline in local populations and correcting the concentration of population in Tokyo. In his October 4 policy speech, Prime Minister Ishiba looked back to 10 years ago when he served as the first minister in charge of regional development and boasted of his achievement of “establishing grants to promote regional development, which are distinct from previous grants,” and proposed doubling the number of grants for regional development.

However, in a late-night (September 28) debate program on the same day that the new LDP president was elected, “Live TV till Morning! on the same day that the new LDP president was elected (September 28), Satsuki Katayama, who also served as minister in charge of regional development, referred to regional development and made the following comment.

When you make various menus for local development grants, local governments do not do anything outside of the menus. When I told them to write their own plans, the plans gradually began to look like, ‘You’re paying a consulting firm. We want to change this.

In many cases, the goal of local governments has become to obtain government grants, and they often ask consultants to draw up the business plans necessary for application. As former Minister of State for Regional Development Katayama seems to be aware, what is behind local governments’ dependence on consultants?

In the field of urban planning, around 1970, when local governments wanted to develop new projects, they would order planning from universities.

After ’00, various grants and subsidies for urban redevelopment were established, and since the start of regional development, the government has raised the bar for the documents it requires local governments to submit. Since the government, as well as universities, are finding it difficult to cope with this situation, I believe that there is a growing tendency to request consultants to do the work.”

Professor Toru Nakayama of Nara Women’s University, who specializes in urban planning and is an expert on municipal policies, points out that, “The enactment of the Act on Decentralization of Government and Local Authorities has made it easier for local governments to submit their own documents.

With the enactment of the Law for Decentralization, the central government has abolished “subsidies with strings attached” that stipulate how they are to be used, and has replaced them with lump-sum grants that can be used freely by local governments, but this has not happened.

The Digital Rural City National Concept Grant (Digita Grant), which was renamed under the Kishida administration, is a prime example of such a grant.

In order to obtain a grant for local development, a local government must prepare an application according to a uniform national manual prepared by the government. For municipalities that do not have the know-how, it is quicker to leave the task to consultants who know the patterns of the application forms.

On the other hand, local governments are short of manpower due to the reduction of staff as a result of administrative reforms.

Since the Heisei merger (1999), the number of employees in municipalities has decreased remarkably. It is clear that it is becoming more and more difficult to plan community development within the local government in terms of human resources.

Fujitsu” is responsible for the medical, welfare, and data coordination infrastructure, “ANA” for logistics, and “NTT West” for regional points. ……

Some municipalities outsource everything from the formulation of plans to the operation of projects to private companies. As an example, Professor Nakayama cited Kibichuo Town in Okayama Prefecture. Kibichuo Town, with a population of just over 10,000, was designated in 2010 as a “Digital Rural Health Special Zone,” a Super City, one of the National Strategic Special Zones.

Kibichuo Town has organized the “Kibi-Kogen City Super City Promotion Council,” chaired by the town mayor, and the names of more than 20 private companies are lined up in the eight subcommittees that are implementing projects. For example, Fujitsu is responsible for medical and welfare services and data linkage infrastructure, ANA for logistics, and NTT West for regional points.

This is not limited to Kibichuo Town; various major companies have entered local governments throughout Japan. However, what they are trying to do is similar in every municipality. I wonder where the public nature of government has gone.

According to the minutes of the town council meetings and publicly available documents, Kibichuo Town was also eligible for the Digi-ten grant in 2010, in a project separate from the framework of the special zone for health. In promoting the project, the town established the “Kibichuo Town Digital Rural City Promotion Council” consisting of industry, academia, and government.

Its members include the town, Okayama University, which is also a member of the Super City Promotion Council, Fujitsu, and Systems Nakashima, a system integrator with headquarters in Okayama, as well as other private companies.

The limited liability partnership (LLP) Kibichuo Town Inclusive Square is entrusted with all the projects as the implementing organization. The town says that “the council is the client and the LLP that implements the projects is the recipient,” but the LLP’s participating organizations overlap with the council’s constituent members. This apparently became an issue at the town council meeting, “raising concerns about a conflict of interest.

The government’s directive to ‘use two consulting firms’ is ……”

Sarabetsu Village in Hokkaido was not selected as a super city, but in ’22, its “Super Village Concept” was selected for the Digital Implementation Type of the Digital Rural City National Concept Grant, and it received a large sum of money. However, it seems to be facing the same problems as Kibichuo Town.”

Sarabetsu Village is a small municipality with a population of about 3,000. The village head told the Mainichi Shimbun that he was urged by the bureaucrats in charge of the National Strategic Special Zone (currently senior officials of the Digital Agency) to “set up two consulting firms” in order to obtain the Digita grant.

The village started the Super Village project with two consulting firms as instructed by the bureaucrats, but one of the firms withdrew midway through the project. However, one of the consulting firms withdrew midway through the project, leaving Tokyo-based construction consultant Chodai to manage the project.

Originally, the grant was supposed to be used at the discretion of the local government. It is undesirable for the government to tell a municipality to use two consulting firms.

In the case of the digital implementation type of the Digita grant, the government requires local governments to create a consortium (joint venture) of public-private partnerships that will serve as the implementation entity for the project. In the case of Sarabetsu Village’s Super Village project, a joint venture, Social Knowledge Bank LLC, consisting of the village, four local companies, and four Tokyo-based companies, is the main operator of the project.

However, because Chodai, which received the order for the project, is also a representative employee of the LLC, which received the order for the project, the village assembly criticized the project, saying that there is a conflict of interest structure. Chodai has also donated a large amount of money to the village through the corporate version of hometown taxation.

However, the joint venture does not disclose details of its projects and budget, so the council cannot check them. One of the council members asked the village to release the information, but the response from the department in charge was, “I heard from the Social Knowledge Bank that they are preparing for the report. According to the council member, the limited liability company has not responded to the release of the information since then.

The councilor said, “If we outsource to a company, information about the company’s business will not be made public. But in the case of Sarabetsu Village, the government is also a member of the joint venture, and they are using the grant to develop public works projects. It is hard to imagine not making this information public.”

One of the village council members said indignantly, “The fact that the government is allowing a system that cannot be checked by the council or village residents is itself a problem.

The Digital Rural City State Initiative is an effort to promote regional development by using digital technology to solve local problems.

But most of the municipalities that have received grants have not come close to achieving their local development goals of creating jobs and increasing the birth rate. Even if we restarted local development and doubled the budget, would it really produce results? I think it would be very difficult.

Doubling the budget will only double the amount of subsidies flowing to the private sector. What the government should do first is to scrutinize how local governments use the subsidies and the results of their projects.

Municipalities that are developing human resources in their communities and those that are not, “10 years from now,” ……

Nevertheless, this is not to say that there are no municipalities that are succeeding in local development. For example, the efforts of Hiroyo-cho, Nara Prefecture, is a good example,” said Professor Nakayama.

The town office, the local chamber of commerce and industry, small and medium-sized businesses, and the Nara Prefecture Association of Small Business Entrepreneurs are working together to promote regional development. The local industry of Hiroyocho is sock manufacturing, and the town has signed a consolidated agreement with Nara Prefecture and the Kinki Bureau of Economy, Trade and Industry to create a general incorporated association to focus on sock branding.

Hiroryo Town is also promoting the project by utilizing a grant from Digita. But there is no Tokyo-based consulting firm involved in the project. The central players in the project are the government, the Chamber of Commerce and Industry, and the Hirokyo Town Sock Association. The mayor of Hirokyocho is from the town office and is trying to create an environment where employees can work with their strengths. I think the attitude of the head of the government is quite important.”

Hitoshi Kinoshita, a town business entrepreneur, wrote in his book “Machizukuri Illusion.

《The administration needs to return to a “self-financing” approach and switch to investing in human resources after managing budgets for outsourcing and other projects. （Leaving it to outside consultants in Tokyo to assemble draft plans that are the same everywhere is not enough to envision the future of a community.

In the end, it’s all about people. It is important to accumulate human resources locally through cooperation among city hall employees, shopping district businesses, economic organizations, and others. Spending more and more money externally will only end up making residents feel a little more convenient.

The national government grants money to local governments, and private companies in the Tokyo metropolitan area, mainly consultants, take advantage of it. Can this structure be changed?

We think it is necessary to promote the transfer of tax revenue sources from the national government to local governments and change the system so that local governments can have more freedom in their finances.

The government should be the one that understands the local community best. We should properly secure staff and allow the government to exercise its public nature.

Even in small towns, there are associations of commerce and industry, economic organizations, and agricultural and fishery cooperatives. With the town hall at the center, local people can pool their wisdom and promote community development. I believe that the municipalities that are able to do this and those that are not will be very different 10 years from now.

It seems that the government will immediately change the name of the “Digital Rural City National Concept Grant” to “New Local Economy and Living Environment Creation Grant” and replace it with a new sign.

In any case, the future may be much brighter for municipalities that focus on administrative and local human resource development, rather than those that try their best to obtain grants in the hundreds of millions from the national government.

Toru Nakayama is a professor at Nara Women’s University, a doctor of engineering, and a first-class architect. He is the author of “Municipal Policies in an Era of Declining Population,” “Childcare System Reform for Children,” “Autonomy and the Public to Build from the Local Community,” and “Measures for Declining Birthrate from the Local Community” (all from Jichitai Kenkyusha).