The term “in-house providing” is used to indicate the entrusting of a public contract to a subject “part” of the same administration without the prior conduct of a public tendering procedure[1].
In-house companies indeed are those companies that are so intimately linked in organisational terms to a public administration that they are comparable to an in-house office of that administration.
Since the well-known Teckal judgment of 18 November 1995, Case C-107/98, companies must meet two requirements to fall into the category of “in-house”: the first one is the so-called “analogous control” while the second implies that the performance of most of their activities are carried out for the benefit of public administrations.
The requirement of “analogous control” refers to the fact that the public shareholder must have the power to influence the strategies and fundamental decisions of the company in order to control its activity. This does not mean that the private shareholder may not hold minority private shareholdings, but it cannot be in a position that allows him to influence the company or control its decision-making process.
The second requirement implies that the company must perform at least 80% of its work for a public administration[2]. Alternatively, this mechanism would distort free competition, since companies that carry out similar activities would be disadvantaged.
This model has represented the freedom for public administration of self-organisation in the management of local public services for decades.
However, in recent years, this traditional public model governance has been challenged.
Communities want to be involved in the management of urban assets left to decay, as a response to the crisis of political representation too.
In other words, the public governance entrusted to the in-house companies should leave room for other forms of co-governance, that enables citizens to participate in the decision-making process of its own city[3].
However, it is important to underline that the public partner does not lose its own functions; to the contrary, it is called upon to manage these forms of subsidiarity and collaboration.
These new issues cannot be addressed with old instruments. Even from a pure legal perspective, art. 4, co. 5 of the Legislative Decree n. 175/ 2016 (“Testo unico in materia di società a partecipazione pubblica”) prevents in-house companies from acquiring stakes in other new companies. In other words, this model seems to have been designed only for organizational purpose and it does not fit for other targets.
As a result, the new governance model for cities should change from the traditional public governance to a collective governance scheme that results in a shared, collaborative, and polycentric model.
The theoretical framework behind this new governance model is represented by the so-called Quintuple Helix model: this model implies a shift to a multi-stakeholder cooperation between social innovators, civil society organizations, knowledge institutions, public authorities, and businesses[4].
To date, this led to the development of the Co-City Protocol, first codified in the Bologna Regulation for the Care and Regeneration of the Urban Commons and tested later on in other Italian cities in a multi-year research project known as Co-Cities[5].
One of the last examples of the Co-City Protocol is Co-Roma.
Specifically, Co-Roma is a Rome-based platform that maps common goods and, in the next future, it will support the development of energy communities[6].
This project can involve the stakeholders mentioned in the Quintuple Helix model and can represent a concrete step in the application of the Co-City Protocol in a challenging city like Rome.
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References
[1] “Le Società in-house. Contributo allo studio dei principi di auto-organizzazione e auto-produzione degli enti locali”, Christian Iaione, Jovene, 2012, p. 117.
[2] art. 16, co. 3, Legislative Decree n. 175/ 2016.
[3] The meaning of the right to the city is explained in “Co-Cities. Innovative Transitions toward Just and Self-Sustaining Communities”, Sheila R. Foster and Christian Iaione, The MIT Press, 2022, p. 15.
[4]“The City as a Commons”, Sheila Foster and Christian Iaione, Yale Law and Policy Review, 2016.
[5] “La Co-Città. Diritto urbano e politiche pubbliche per i beni comuni e la rigenerazione urbana”, Paola Chirulli e Christian Iaione, Jovene, 2012.
[6] www.co-roma.it