Government Report: Legislation on regional development is functional but legislative reform needs to increase effectiveness

The current legislation on regional development and the EU’s structural policy supports the objectives, but implementation should be more cost-effective in future. The Government submitted a report on the subject to Parliament on 5 June 2025. The report evaluated how well and effectively the system and funding of regional development functions. The assessment will be used as a basis for the legislative reform that will begin in 2026.

The objective of the regional development legislation that entered into force in 2021 was to link efficiently together national and EU regional policies to improve the conditions for sustainable growth in the regions. According to the report, the current legislation on regional development supports the strategic planning of regional development and cooperation, but it should achieve the set objectives more cost-efficiently in the tightening economic conditions.

“The report defines well the goals of the reform of regional development legislation: more effectiveness, less bureaucracy and stronger cooperation across regions. Legislation must enable flexible but clearly guided regional development to ensure that all corners of Finland remain vibrant,” says Minister of Economic Affairs Wille Rydman.

The definition of regional development as an activity combining different operators and branches of government based on cooperation has been successful. Setting cooperation between operators as a premise for development makes the implementation of regional development more flexible in changing situations. The objectives defined in the act on regional development are still current. However, it is important that rising trends, such as security, biodiversity or regional segregation, are evaluated during the legislative reform.

Coordinating the preparation of national and EU programmes has turned out to be difficult, which undermines the consistency of planning. The regional programmes serve as good strategic tools for regional development, but it would be useful to assess the rhythm of programme preparation. Strategic planning extending beyond electoral terms would be beneficial to long-term regional development, but a link to the rhythm of political decision-making is also important.

The complexity of the programme structure and the extent of the forms of support have reduced customer orientation and slowed down digitalisation. Simplifying administration requires that the content of programmes are prioritised more clearly and the roles of operators are clarified. Seamless cooperation between the regions and central cities is important, because both of them play a key role in policies on regional vitality. The role of the regional council as both a lobbyist and a developer may sometimes appear conflicting.

The simplified cost models of the funding act have reduced administration, but the large number of models has burdened both the authorities and beneficiaries. The group project model, which aimed to ease project administration, has proved challenging to implement.

The report evaluated how well and effectively the system and funding of regional development functions. The assessment will be used as a basis for the legislative reform that will begin in 2026. The new legislation on regional development and the EU’s regional and structural policy is intended to enter into force at the beginning of 2028 when the new EU programming period starts.

Inquiries:

Teemu Hartikainen, Special Adviser to the Minister of Economic Affairs, tel. +358 50 563 0200
Johanna Osenius, Director for Regional Development, Ministry of Economic Affairs and Employment, tel. +358 295 064 937
​​​​​​​Petra Stenfors, Chief Specialist, Ministry of Economic Affairs and Employment, tel. +358 295 047 282

The Ministry’s email addresses are in the format [email protected]