Cities across Europe are responsible for far more than their respective core municipal administrations. Public transport operators, utilities, housing companies, infrastructure providers and other municipally owned (semi-public/private) entities often manage significant assets, investments and essential public services. How these organisations are governed therefore matters not only for city finances, but also for the quality, resilience and affordability of services residents rely on every day.
This was at the heart of the 12th meeting of the European Cities for Sustainable Public Finances (CSPF), held in Tallinn in June 2026. Bringing together finance and public-sector experts from European cities, the meeting explored a key question: how can cities give municipal companies enough autonomy to operate effectively while maintaining accountability, financial control and a clear focus on public value?
There is no single European model. Some cities organise large parts of their services through municipal holding companies, while others maintain more direct relationships with individual entities. The structures also reflect different legal systems, political traditions, local markets and histories. What cities share, however, is the need to make these arrangements work under increasingly demanding conditions.
Financial space is tightening, capital costs have risen, and major investments are required in areas such as climate transition, energy, mobility and infrastructure. At the same time, residents expect high-quality services and greater transparency about how public resources are used. The challenge for city finance leaders is therefore not simply to control expenditure. It is to design governance systems that enable cities to pursue long-term strategic goals while understanding and managing the risks across the wider municipal group.
From organisational charts to strategic questions
The discussions in Tallinn showed that municipal governance quickly leads to wider questions about the role of the city as an owner.
How should responsibilities be divided between elected representatives, the municipal administration, company boards and management? Which decisions should remain with an individual company, and where is stronger group-wide coordination needed? How can cities see their total debt, investment needs and financial risks rather than looking at each organisation separately?
And importantly: how do cities measure success when financial performance is only one part of the mission?
Public companies frequently operate in areas where profitability, affordability, accessibility, environmental objectives and service quality have to be considered simultaneously. This makes governance fundamentally different from managing a conventional private-sector group. The Tallinn discussions repeatedly returned to the need for clear mandates, useful performance information and governance mechanisms that connect financial sustainability with broader public objectives.
Another topic was the potential for shared services across municipal organisations. Finance, procurement, IT, legal services, treasury and other functions may offer opportunities for economies of scale, specialist expertise or stronger risk management. Yet centralisation is not automatically the answer. Cities also have to consider service quality, legal requirements, liability, organisational acceptance and whether individual entities need the freedom to respond to their specific operating environment.
The same tension becomes particularly visible when cities undertake major investments. The meeting considered how local governments can reconcile ambitious public-policy goals with their own financial capacity and risk appetite – especially in capital-intensive sectors such as energy infrastructure.
A network for comparing approaches, not always finding one template
Perhaps the most valuable aspect of the CSPF exchange is precisely that participating cities do things often differently.
The meeting brought perspectives from cities including Amsterdam, Barcelona, Bordeaux, Hamburg, London, Tallinn and Trondheim, alongside experiences from other European municipalities and external experts. Their organisational structures vary, but many of the underlying questions are remarkably similar: how to retain strategic control without micromanaging, how to make financial information decision-relevant, how to prioritise investments, and how to ensure that public companies continue to serve the purpose for which they were created.
Rather than searching for one “best” structure, CSPF provides a space to compare the choices behind different models – and to understand what may be transferable from one city to another.
That exchange is particularly important at a time when city CFOs are increasingly becoming strategic stewards of the wider municipal system. Sustainable public finances depend not only on balancing an annual budget, but also on understanding assets, companies, liabilities, investments and policy ambitions as interconnected parts of a city’s long-term financial position.
Over the coming weeks, we will share examples from our CSPF cities – stay tuned via our newsletter, social media channels and www.cspf.eu.
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