The term services of general interest is often criticized for being iridescent, fuzzy or without contours. Some even speak of a term of art. In essence, these characterizations certainly cannot be denied a certain truthfulness, as there is no legal definition. It is therefore not surprising that there is a dispute in the legal world about the scope and limits of services of general interest. At this point, of course, legal dogmatic discussions, which rarely promise added value in municipal practice, will be discussed in more detail. Nevertheless, it is worth taking a historical look at the origins of services of general interest in order to gain a basic understanding.
This is the story of services of general interest
The term services of general interest goes back to the administrative lawyer Ernst Forsthoff. Born in 1902, he found a state that had to grapple with increasing industrialization and mechanization, the agglomeration of many people in a small area in large cities, the impoverishment of large sections of the population and the dissolution of family and neighborly ties.
Recognizing that against this background, the state must also increasingly perform social tasks, Forsthoff pointed out in 1938 the development of an administration that was not only restrictive but also efficient towards the citizen. The concept of services of general interest was thus mapped out. Forsthoff saw it as the state’s duty to provide the goods and services necessary for a meaningful human existence.
This originally existential reference of services of general interest to the elementary needs of people was later relativized. It was Forsthoff himself who, at the end of the 1950s, broadened the term services of general interest in the sense of providing the services and goods that are necessary or useful for a meaningful human existence.
These things include services of general interest
This applies equally to the economic, social and cultural areas. Services of general interest include everything that, according to the technical and financial possibilities, belongs to the normal equipment of modern existence. This also makes it clear that the tasks of services of general interest relate to fundamental rights as the social participation of all citizens.
In order to fill these historical references with a little life, some of the well-known examples are listed: Supply with energy and water, disposal of sewage and waste, public transport, provision of a school and educational system as well as a health system, postal and telecommunications services, provision of public transport Green spaces and swimming pools, theaters, museums and libraries, financial and insurance services, rescue services, etc. Meanwhile, there are also initial approaches for digital services of general interest.
The municipalities decide
The performance of many functions of general interest is rooted in the local community. As part of their self-administration, the municipalities usually perform these tasks as self-administration matters. The Basic Law, in the form of local self-government, grants them independent access to all matters of the local community.
As a starting point, the municipalities can freely decide which tasks of general interest they take on within the scope of their capabilities. There is only a statutory obligation to perform tasks for particularly important tasks, such as sewage disposal and waste disposal (mandatory self-administration tasks). Even if basic public service tasks would otherwise not be fulfilled, for example due to a market failure, an obligation to take on municipal tasks within the scope of warranty responsibility is conceivable.
The question of “how” to perform tasks is largely also subject to the organizational discretion of the municipalities. A municipality can basically decide freely whether a task of general interest is carried out by the existing administrative apparatus (green space management by the green space office) or, for example, by means of an in-house operation or an institution similar to that of an own operation.
Private-sector forms of organization are also possible. In practice, municipal utilities are seldom run as an in-house operation, but more often as a GmbH, sometimes also as a stock corporation.
Local utility law plays this role in services of general interest
Beyond the state aid and procurement law, which is not dealt with in more detail here, there are legal obligations for the performance of municipal tasks in the area of services of general interest, primarily from the municipal economic law in the respective municipal regulations of the federal states, with the municipal regulations of North Rhine-Westphalia being used here as an example. Most of the economic activities of municipalities are subject to the private sector’s reservation, according to which municipal economic activity is prohibited if the public task can be performed better and more economically by the private sector. However, the exact formulations vary depending on the federal state.
It is also important that certain tasks of general interest are by law not considered to be an economic activity, but rather the non-economic fulfillment of tasks, so that the reservation of the private sector does not apply here. This applies to waste and sewage disposal, schools, daycare centers, museums, theaters, cinemas, town halls, sports facilities, zoos, parks and gardens, baths, hospitals and retirement homes, etc. Also the operation of telecommunications networks, as is the case with some municipalities in In the recent past, more and more efforts are being made, does not fall under the reservation of the private sector in NRW.
Private companies need a legal basis for sovereign powers
Furthermore, there are further restrictions, especially for municipal companies in the form of private law, in particular with a view to limitation of liability and the possibility of influencing the municipalities involved and their officials. It should also be noted that companies under private law, even if they are municipal owned companies, are not allowed to exercise sovereign powers without a corresponding legal basis, which regularly does not exist.
A municipal public utility company, which a municipality uses in the context of fulfilling its wastewater disposal obligation, may not, for example, issue any fee or contribution notices. A municipality is also not allowed to completely dispense with mandatory self-administration tasks, i.e. not hand them over to the private sector in their entirety.
The public waste disposal authorities must therefore not evade their waste disposal responsibility. Here, only the involvement of private individuals as administrative assistants is generally permitted by way of commissioning. In any case, the municipality remains ultimately responsible.
The law of public tasks and the closely related municipal organization law including the law of privatization and remunicipalisation are complex areas of law that can only be dealt with very briefly here. A case-by-case assessment is therefore always necessary for legally secure arrangements and legal advice is usually available.
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