Finance mechanism for local governments - context:

The Millennium Declaration included access to safe drinking water and basic sanitation among the Millennium Development Goals, targeting to halve, by 2015, the proportion of the population without sustainable access to safe drinking water and basic sanitation.

 In July 2010, the United Nations declared that access to safe and clean drinking water and sanitation are human rights and essential to the full enjoyment of life and all other human rights.

 However the world is off-track to meet this MDG target and far from making the right to water and sanitation a reality for all. The drinking water component is formally on track though at the bottom limit of the acceptable range and with deteriorating prospects. The sanitation component of the target is significantly off track. The World Water Development Report 3, confirmed that at the current rate of progress, the world will miss the sanitation MDG target by 13 percentage points, meaning that in 2015 there will still be 2.7 billion people without access to improved sanitation, a shortfall of 550 million people compared with targeted achievement. At this rate the MDG target will not be met until 2049. To achieve universal access will take even longer.

 In September 2010 the United Nations called for a redoubling of efforts towards meeting the MDG targets and the engagement of all actors to increased political focus on water and sanitation, increase of funding, coordinated efforts based on proven successes, involvement of communities in decision making and efforts to ensure that all people have access to information and services.

 Evidence confirmed the key role in the achievement of the MDGs that Local governments and sub national institutions can play from their advantageous position in service delivery if properly empowered to lead, own and manage the development of water and sanitation services.

 Given their proximity to the beneficiaries and the local knowledge they possess, local governments are in a good position to coordinate and facilitate a more efficient, visible, accessible and accountable use of funds. However, local government as an institution cannot in itself facilitate these targets, especially without adequate funding, accountability and political will.

 The World Health Organization estimates the annual cost necessary to achieve the water and sanitation MDG target in USD 9.5 billion while achieving universal the universal coverage in USD 30 billion per year (these data do not consider cost of maintaining current levels of service to population already supplied – USD 15 – 20 billion a year).

 Despite increase during the last decade, current levels of aid for water supply and sanitation services (USD 6.2 billion including bilateral and multilateral/16% of ODA-OECD estimations) are clearly insufficient to achieve the target and even further from ensuring the universal realisation of the right to water and sanitation.

Finance mechanism for local governments: 1% water and sanitation solidarity levy – current developments

 With the objective of developing innovative cooperation mechanisms to contribute to fill in this funding gap, the HUB for innovative partnerships of the United Nations Development Programme (UNDP), in cooperation with the United Nations Capital Development Fund (UNCDF), launched the “1% water and sanitation solidarity levy” initiative.

 The initiative builds in existing innovative experiences at national and regional level, mainly within European and OECD countries such as France (law “Oudin-Santini”), Netherlands (law “Motie Koppejan”), Switzerland (Platforme Solidarit’eau), Spain (“canon del agua”) and Italy among others and counts with a potential of raising Euro 4.7 billion per year only in Europe.

 As a first concrete outcome, the initiative has constituted the steering committee for the “1% water and sanitation solidarity levy” that clusters governments, public and private institutions and civil society organizations from international, national and local level, engaged to develop innovative solutions to mobilize additional technical and financial resources to support local governments in their efforts to achieve the target 7c and furthermore, to ensure the right to water and sanitation for all.

 The steering committee “1% water and sanitation solidarity levy” and its members are therefore committed to promote political, operational and communication measures that support the expansion and new development of innovative cooperation processes in the water and sanitation sector at local, national and international level based on the principles of solidarity, subsidiary and sustainability and the respect, protection and fulfillment of the basic human right to water and sanitation.