The system of budget decentralization risks in Ukraine is defined. Major problems of budget decentralization are outlined as following: unbalance of local budgets’ income and expenses due to the lack of sources to cover the liabilities transferred to the local budgets; absence of social standards and criteria on liabilities set and delegated by the state to local self-governing bodies in descriptive and value terms; violation of social justice principle in terms of repayment of privileges approved by Verhovna Rada of Ukraine; initiative on elimination of excise tax on retail trade in excisable goods; unfinished process of territorial communities combining stipulates additional burden in terms of budget system balancing. The ways to improve the mechanisms of budget regulation for maintenance of further accomplishment of budget decentralization reform’s tasks and achievement of its goal are suggested. The major directions are: development of state social standards; maintenance of correspondence between local budgets’ financial resources and the delegated liabilities; assurance of social privileges targeting; improvement of local taxes and fees efficiency; maintenance of inter-budgetary relations efficiency; solution of the issues on debt repayment of State Budget on Privileges and Subsidies; assurance of sectoral decentralization in the health care sphere; maintenance of sectoral decentralization in the educational sphere; provision of budget costs’ efficient management. 

budget decentralization, expenses, income, local budgets, local self-governing bodies 

At present, socio-economic development of Ukrainian regions is gradually stabilizing, which is manifested in the increase of positive development trends (including improvement of the construction sector, investment, industrial and agricultural production) as well as in the increase of number of regions where these indicators are improved. Foreign trade orientation of regional economics is gradually changing too; new markets for goods appear, expanding the geography of goods supply of Ukrainian regional producers. Stabilization of the socio-economic development can successfully decentralize power and strengthen the legal and financial potential of communities. In this way, a lot has been done, in particular, new special grants were introduced, the scope of public-private partnership for projects of local importance was expanded, the assistance from international financial institutions was involved. However, the implementation of regional policy and decentralization process have a number of shortcomings that block the successful development of communities and regions. A lot of shortcomings can be observed in using of the State Regional Development Fund, the financial capacity of communities is not strong enough (despite the transfer of a number of new revenue sources to local budgets), and also, the increasing of grant amount to local budgets only reinforces the dependence of communities on the government and the state budget.
These problems are added to the necessity of interaction of the occupied territories of Donetsk and Lugansk regions and annexed Crimea; and to rebuilding of the destroyed areas after the fighting of Donetsk and Lugansk regions, and search for mechanisms to restore economic activity and industrial and trade ties with other regions of Ukraine.
In this regard, regional policy and decentralization in Ukraine are under the pressure of necessity to create new mechanisms for its implementation and ways of its improvement in order to be able to give an adequate response to challenges faced during the current two years. These questions determine the relevance of this article. The subject of this article is to study the socio-economic trends of regional development and outline the course of decentralization process in Ukraine today. The purpose of this article is to outline mechanisms for updating regional policy and decentralization. The objectives of the article is to analyze the socio-economic development of the regions, to characterize the decentralization of power flow; to identify challenges and threats of regional development; to create new mechanisms for the implementation of regional policy and improving of the process of decentralization and strengthening the legal, material and financial viability of communities. Results of the study can be used in the formulation of regional policies, decentralization of power and the practical activities of executive bodies and local authorities. 

decentralization, local governance, regions, territorial communities 

The problems of conducting the administrative and territorial reform in Ukraine and its legislative maintenance are examined. It is defined that territorial administrative units should have sufficient financial, economic, institutional and human resources potential in order to maintain high level of granting social services to population and of social and economic development of the relevant territories. Legal regulation of the issues related to administrative and territorial division is poor and controversial. The necessity of administrative and territorial reform as the basis of new territorial management model grounding on the principles of decentralization, subsidiary, balance of state interests and the interests of regions’ population and territorial communities, efficient development of state management and local self-governance, capability and independence of territorial communities in solution of local issues is stressed. The analyses of preconditions, risks and obstacles that can emerge in the course of the reform implementation will contribute to successful forming of capable territorial communities. The following are the most probable risks and obstacles: possible weakening of controllability at the bottom management level during conducting the reform; opposition of local management elites, for the reform provides considerable growth of responsibility at bottom management level and optimizing (decreasing) of the amount of rural, town, city, and at the next level – regional councils that leads to losing the job by some part of managers; possibility of disputes over the land and estate issues; lack of sufficient financial resources for stimulation of territorial communities integration stipulated by law. In order to neutralize the abovementioned risks it is necessary to create relevant institutional maintenance of reforming process. This stipulates adopting of the range of legislative acts to form the system of organizational-legal and financial-economic mechanisms directed at establishment and development of capable territorial communities. While conducting the reform, it is necessary to use the experience of other countries – Ukraine’s neighbours that have already successfully conducted the reform of territorial management systems. In this regard the Ukrainian-Polish consulting group is created in order to develop the proposals for improvement of legal management of the local development and local self-governance reforming issues in Ukraine. The group has to conduct the assessment of decisions implementation state over financial decentralization, prepare proposals over making amendments to the Budget and Tax Codes of Ukraine on financial decentralization and strengthening of local self-governance financial basis taking into account the performance of local budgets and to elaborate the mechanisms of public finances population and state control maintenance.The reform of administrative and territorial division and territorial authority organization in Ukraine is one of the fundamental reforms that encompass pretty much every sphere of society activity. That is why the broad public support is necessary for its conducting. This, in its turn, requires objective and broad presentation of the process and problems of reforming in the mass media. 

administrative-territorial reform, administrative-territorial division, decentralization, local self-governance, models of territorial governance, territorial communities 

The article is devoted to coverage of the scientific and practical aspects of decentralization as a rational alternative to the federalization and the mechanism of Ukraine’s rapprochement with the European standards development. It is established Ukraine during the last ten months of consistent decentralization as part of the modernized regional policy, enshrined in the basic normative legal acts of the constituent and programmatic character. In particular, in the Concepts and Action Plan of reform of local self-government and territorial organization of government in Ukraine, the Coalition Agreement of the current parliamentary coalition, “Sustainable Development Strategy “Ukraine – 2020”, the Programme of activities of the Cabinet of Ministers of Ukraine etc. The risks of decentralization, namely the limited funds of local budgets, weak capacity of local communities to attract financial resources, low efficiency of use of financial resources are analyzed. The necessity of solving the tasks of economic strengthening of small regional communities, as well as reducing their dependence on budgetary support is emphasized in the article. Towards solving this problem should be considered as implementation of administrative-territorial reform and the Acts “On Cooperation between Territorial Communities” and “On a voluntary association of territorial communities”. The basic directions of reformation of administrative services in Ukraine is proposed: regulatory optimization for obtaining payment of administrative services; unification of administrative procedures and the improvement of administrative services; the gradual transfer to the competence of local authorities a wider range of services. Maintaining balanced approach to decentralization, the impossibility of the appearance of “preferred” regions, ensuring equal conditions for regional development, the formation of viable and competitive territorial entities that can implemented an active economic policy are noted on. The prerequisites of self-development and growth of local entities is revealed. A wide implementation at the local level mechanisms and instruments of rational use of internal capacity development, which is based on decentralization, is proposed. 

decentralization, local government, regional policy, fiscal decentralization, administrative services