Preparing for Demographic Change in Castilla y León, Spain

1. Assessment and recommendations

Castilla y León, a vast but sparsely populated region in north-central Spain, faces pressing demographic challenges. With a surface of 94 224 km² and approximately 2.4 million inhabitants distributed across 9 provinces and 2 248 municipalities, the region has one of the lowest population densities in the country and the EU, at 25 inhabitants per km², significantly below the EU average of 109 inhabitants per km². Over the past decades, Castilla y León has experienced much higher rates of sustained depopulation and accelerated ageing than in OECD regions. These trends, which are expected to persist in the future have profound implications for the regions’ economic vitality, its labour market dynamics and the provision of public services. A shrinking workforce and consumer base, coupled with rising demand for healthcare and elderly care, puts pressure on local economies and the financing of social infrastructure.

While reversing these trends is challenging, Castilla y León has taken significant steps to adapt and mitigate their impacts – in particular in areas such as healthcare provision, housing, and regional attractiveness. Strategic adjustments in land use planning, governance, finance, and service delivery continue to play a central role in maintaining quality of life for residents and enhancing the region’s attractiveness. Efforts to support entrepreneurship, invest in digital infrastructure, and promote youth innovation ecosystems offer additional opportunities to revitalise the regional economy. A forward-looking approach to demographic adaptation – leveraging technological innovation, improving service delivery, strengthening governance and fiscal capacities, and addressing critical issues such as housing – can support inclusive and sustainable development.

EU Cohesion Policy instruments can further reinforce these efforts through investments that are place-based and align with demographic needs. Castilla y León has already mobilised European Regional Development Fund (ERDF), European Social Fund Plus (ESF+), and cross-border INTERREG funding to address demographic change. New investments in innovation, youth employment, green infrastructure, and the care economy supported through these instruments are contributing to regional diversification and improved local opportunities. The region can take advantage of the 2025 mid-term review of EU Cohesion Policy programmes to realign existing funds with emerging and future needs, particularly in housing, skills development, and inter-municipal service provision. Building on ongoing efforts and adopting a strategic and adaptive approach, Castilla y León can build a more resilient economy and society, ensuring long-term well-being for its residents and future generations.

Regional profile and key trends in Castilla y León

Persistent population decline and accelerated ageing

Castilla y León is amongst the most affected OECD regions experiencing a sustained demographic decline and rapid ageing. Between 1990 and 2023, its population has shrunk by 7%, in contrast to the 27% growth recorded in the average OECD TL2 region, placing the region among the bottom 10% of TL2 regions for which data are available in terms of population growth. Depopulation has been widespread, affecting more than 86% of municipalities in the region, including large cities. The population decline is driven by two main factors: a persistently negative natural population change – with fertility rates below the 2.1 replacement rate at 1.1 live births per woman, combined with lower mortality leading to longer life expectancy and an ageing population – and sustained youth emigration. Castilla y León has the highest interregional mobility rate amongst young people in Spain, particularly university graduates who face limited local job opportunities.

This persistent outmigration of youth reinforces the need to expand career development opportunities in situ and better connect young talent with emerging sectors. While international migration has provided some relief, it has not been sufficient to reverse the overall population loss. At the same time, the region’s population is ageing more rapidly than both the national and OECD averages. In 2023, Castilla y León recorded Spain’s second-highest old-age dependency ratio with 43 individuals aged 65 and above for every 100 working-age inhabitants (15-64 years old), substantially above the Spanish average of 31. Rural areas are particularly affected by ageing trends, with one-third of elderly residents living in municipalities with fewer than 2 000 inhabitants. While some agricultural areas have attracted younger migrant workers, the overall demographic trends present significant challenges to the region’s sustainability and its public service delivery.

However, according to official data from Spain’s National Statistics Institute (INE), the region's population has shown modest but consistent growth over the past two years, increasing from 2.385 million in Q1 2023 to 2.395 million in Q1 2025 (INE, 2025[1]). This recent upturn suggests a partial reversal of previous demographic trends, although long-term projections still point to continued decline and ageing in most areas. Both depopulation and ageing are expected to continue in the coming decades. By 2050, the region is projected to lose 450 000 inhabitants. In addition, all the provinces will experience further population ageing. In Zamora, the old-age dependency ratio is projected to exceed 100, meaning there would be more elderly residents than working-age individuals.

Castilla y León is at risk of being in a ‘talent development trap’

In some regions, demographic decline is compounded by a shrinking base of highly educated individuals, leaving them without the talent needed to drive recovery and adapt to change. In its 2023 Communication on Harnessing Talent in Europe’s Regions, the European Commission distinguishes between two groups: 46 regions already in a ‘talent development trap’ – where a shrinking working-age population coincides with a low or stagnating share of tertiary-educated people – and 36 regions at risk of falling into such a trap, due to strong youth outmigration and related labour market pressures. Castilla y León is classified in the second group (EC, 2023[2]). In the region, persistent youth outmigration – particularly among university graduates – combined with negative natural population change and limited skilled employment opportunities, has led to sustained depopulation. Demographic shifts are likely to accelerate talent loss, increase pressure on already tight labour markets, and reinforce a vicious circle of lower attractiveness for younger workers and residents.

While Castilla y León is already taking steps through its Talent Strategy 2031 to improve workforce retention and address demographic decline, experiences from other regions can provide additional insights. For example, Portugal’s Norte region recently introduced a set of Active Employment Policies under a 2023 Decree-Law (República Portuguesa, 2024[3]). These nationally led measures target individuals under 35 and promote job creation, vocational training, and career development through programmes such as “+Talent”, “+Employment”, and “Start”. Such targeted approaches could inspire complementary action in Castilla y León, particularly in advancing talent retention at the regional level.

Balancing economic strengths and structural weaknesses

Despite its demographic challenges, Castilla y León’s economy outperforms 10 of the 17 Spanish TL2 regions, in terms of GDP per capita. However, structural limitations persist. The region’s GDP per capita remains slightly below the national average (96%), reflecting an economic model that largely depends on traditional industries and the public sector. Agriculture and public-sector-related services continue to be the main sources of employment in the region, while knowledge-intensive industries – such as information and communication technologies (ICT) and professional services – remain underdeveloped.

Unemployment is lower than the national average, and labour force participation is relatively high among working-age residents. However, persistent youth emigration has resulted in skilled labour shortages and mismatches in the job market. Employers struggle to recruit technicians, engineers, and healthcare professionals, with some vacancies proving difficult to fill despite non-negligible unemployment levels. This outflow of skilled workers – often referred to as a ‘brain drain’ – further limits the potential for economic diversification and innovation. Supporting youth-led entrepreneurship and better linking higher education institutions with regional innovation strategies can help retain talent and foster local dynamism. Yet a persistent challenge remains: attracting high-value industries requires a critical mass of skilled professionals, while difficulties in retaining and attracting young talent limit economic growth and economic diversification. Addressing this challenge will be crucial for Castilla y León to boost competitiveness and ensure long-term economic sustainability.

Governance fragmentation and complex policy framework

Spain is a quasi-federal country with a highly decentralised and asymmetric governance structure, where subnational governments play a major role in public spending and service delivery. Castilla y León operates under the “common regime” shared by most Autonomous Communities (ACs), in contrast to the “foral regime” of the Basque Country and Navarra, which enjoy broader fiscal autonomy. In Castilla y León, the multi-level governance system both enables and complicates the regional response to demographic challenges. As one of Spain’s 17 AC’s, the region has competences in policy areas that include education, health, social services, land use planning, and economic development. However, governance remains highly fragmented: the region is divided into nine provinces – each with its own provincial council – and contain more than 2 200 municipalities, nearly half of which have fewer than 500 inhabitants and limited administrative capacity.

The region has taken important steps to address demographic change through a comprehensive policy framework that engages multiple levels of government and a wide range of stakeholders. In addition to aligning with Spain's National Strategy for the Demographic Challenge in 2019, Castilla y León developed its own strategies, including the Strategy for Demographic and Territorial Sustainability, which remains to be formally adopted. Additionally, the Talent Strategy 2031 focuses on workforce retention and economic resilience through public-private collaboration.

The region also actively leverages EU Cohesion Policy programmes to support demographic and territorial objectives. Castilla y León has used European Regional Development Fund (ERDF) and European Social Fund Plus (ESF+) resources during the programming period 2014-20, and is continuing to programme these funds in 2021-27, to invest in infrastructure, health and care services, digital connectivity, and workforce upskilling – particularly in areas facing depopulation and ageing. Emerging priorities include supporting innovation in SMEs, green transition projects, and inclusive digitalisation measures targeted at youth and seniors. Projects include the deployment of broadband in low-density zones, support to integrated on-demand rural transport systems, and investments in education and healthcare facilities in small municipalities. The region also uses ERDF and ESF+ to co-finance local employment and training schemes linked to the care economy and digital transition. In cross-border areas, initiatives such as the Plan de la Raya have been supported through INTERREG programmes with Portugal, targeting shared service access, mobility, and demographic resilience. These actions are often embedded in broader territorial strategies, such as the demographic sustainability annex in the regional budget, which channels regional and EU funds to small municipalities.

Ensuring continued co-ordination efforts across all levels of government will be essential to translating these initiatives into concrete, place-based solutions that address the region’s demographic challenges. Cohesion Policy funds can act as an enabler for these place-based approaches, particularly through support for inter-municipal planning, integrated service hubs, rural housing rehabilitation, and strategic infrastructure aligned with demographic and territorial strategies. Castilla y León’s ongoing effort to update its ERDF and FTJ programmes, including the incorporation of STEP priorities, reflects its intent to align EU funding with emerging needs. Targeted EU support for youth employment, skills development, and regional innovation capacity under the current mid-term review could reinforce the region’s ability to adapt and diversify. The mid-term review presents an important opportunity to strengthen this alignment, despite continued uncertainties regarding project eligibility and implementation timelines.

Adapting land use and spatial planning in Castilla y León

Updating spatial planning to align with population projections to improve land use efficiency and create more attractive rural areas

Castilla y León’s land-use planning does not adequately reflect demographic realities, leading to inefficient urban expansion despite population decline. Many municipalities lack up-to-date plans, leading to sprawl, infrastructure strain, and underuse of existing assets. The region must update its Territorial Planning Guidelines to align local plans with population trends, promote urban regeneration, and curb low-density development. Simplifying and streamlining planning instruments will enhance efficiency, sustainability, and territorial cohesion. Castilla y León could also explore using EU Cohesion Policy funds related to Policy Objective 5 (a Europe closer to citizens) to support more granular spatial planning that reflects its demographic reality. Key actions addressing these challenges include:

• Updating Territorial Planning Guidelines to reflect demographic trends. The region can consider updating its 2008 Essential Territorial Planning Guidelines to better integrate population projections into local plans and prevent inefficient land use. Updated regulations must promote urban regeneration while limiting low-density sprawl. Updates should also align with strategic priorities at the EU level, as evidenced in the proposed mid-term review of Cohesion Policy for the 2021-2027 period which emphasises the importance of streamlined permitting and land use decision making.

• Ensuring all municipalities have updated local land-use plans. All municipalities should have an up-to-date land-use plan, such as a General Urban Development Plan (PGOUs), Municipal Urban Regulations (NUMs), or Territorial Urban Planning Regulations (NUTs), that reflect population trends, ensure flexibility for urban regeneration, and restrict new land consumption. The incorporation of demographic trends into local planning and classifications can be made mandatory and updated frequently. Height allowances can be adjusted to support vertical rather than horizontal expansion, thereby promoting denser development of multi-family dwellings.

• Revising urban development and municipal planning regulations. PGOUs and NUMs should prioritise high-density development, rehabilitation incentives, and urban regeneration while restricting low-density sprawl, ensuring more efficient land use, infrastructure, and service delivery.

• Expanding NUTs for small municipalities. The region can evaluate the effectiveness of NUTs in rural areas and expand them where relevant. These plans should encourage compact development, repurposing secondary homes, and limiting low-density housing growth.

• Replacing outdated subsidiary and delimitation plans to streamline planning. Outdated Municipal Subsidiary Regulations and Land Delimitation Plans can be replaced with modern land-use plans. This would simplify the planning framework, reduce bureaucracy, and ensure efficient urban development.

Supporting smart densification to enhance environmental sustainability and public service efficiency

Despite population decline, Castilla y León continues to experience increases in land consumption due to low-density development and limited availability of underused properties. Many municipalities lack the tools and/or technical capacity to incentivise densification and urban regeneration, resulting in inefficient land use, infrastructure strain, and greater per capita costs to delivery services. To address this, the region can introduce a combination of fiscal incentives, land readjustment policies, and developer obligations as appropriate to promote compact, sustainable development while discouraging land hoarding and speculative vacancies. Castilla y León could explore using Cohesion Policy funds related to Policy Objective 2 (a greener, low-carbon Europe) to support more rational land use and settlement patterns aligned with its demographic reality.

Smart densification can help address the challenges mentioned through approaches aligned with the New European Bauhaus principles, creating attractive, sustainable and inclusive spaces that appeal to the educated, mobile workforce essential for escaping the talent development trap. Efficient spatial development is essential to protect Castilla y León’s precious and valuable environmental landscapes that form the region's identity. Higher densities in designated areas can also facilitate the provision of affordable and social housing, a recognised priority in the EU Cohesion Policy mid-term review, directly addressing the housing challenges often lead to youth outmigration. Smart densification can also deliver climate-related co-benefits by reducing emissions, preserving natural capital, and creating inclusive, vibrant communities that can successfully compete for talent in an increasingly mobile European labour market, in line with Cohesion Policy Objectives 1 (a smarter Europe) and 2 (a greener Europe).

Key actions include:

• Reforming fiscal policies to reduce property vacancies. A progressive vacancy tax could be introduced to discourage long-term empty properties. Incentives could encourage converting secondary homes into rentals or community spaces, reducing unnecessary new construction.

• Facilitating land readjustment, transfer of development rights, and demolition. The region should enable landowners to consolidate fragmented plots for better-serviced and more compact developments, and transfer development rights in exchange for contributing land parcels. NUTs can embed incentives for repurposing land for sustainable agriculture, eco-tourism, or industrial parks. Stronger fiscal and technical incentives could be introduced for demolishing and replacing unfit properties with dense, multi-use developments, industrial parks, or nature reserves. Streamlining expropriation procedures for long-abandoned properties would also support efforts.

• Leveraging developer obligations to limit urban sprawl. The region can use developer obligations to internalise the externalities that arise from sparse development patterns to deter low-density sprawl in remote areas. Where relevant, density bonuses and differentiated fee structures can also be applied to encourage urban regeneration and compact growth. Proceeds can be reinvested in housing rehabilitation and support, especially for young people, as well as infrastructure improvements.

Matching housing supply with demand to alleviate housing pressures and support labour needs in rural areas

Housing development in Castilla y León has not been effectively aligned with demographic realities, leading to over-construction in shrinking areas while secondary properties are kept vacant. Many municipalities continue to approve low-density housing developments without considering population decline, infrastructure capacity, or existing housing stock. Many rural areas have succeeded in attracting investments and creating jobs, but potential workers often lack housing options due to sparse development and the prevalence of secondary homes unavailable for rent. A more strategic approach is needed to evaluate construction permits based on demographic trends, promote urban regeneration, and scale up housing rehabilitation programs to make better use of vacant properties and attract new residents. The upcoming Cohesion Policy mid-term review presents an opportunity to channel ERDF resources toward strategic housing rehabilitation and rural housing projects that address both demographic decline and affordability challenges – pending clarification of eligibility criteria from the European Commission. Castilla y León has already piloted programmes such as REHABITARE and TUYA using regional funds and could build on these models with EU co-financing. Key actions include:

• Evaluating housing permits based on current and future demographic trends. Castilla y León should require municipalities to evaluate housing construction permit approvals based on independently produced demographic projections contained in local land-use plans, limiting new and low-density construction and prioritising renovation, rehabilitation, and dense and vertical development in well-connected areas.

• Establishing mechanisms to manage vacant land and housing. Castilla y León can establish a fund and use land banks or community land trusts to acquire and manage unused land from private owners or municipalities and promote strategic development. A dedicated regional agency can provide administrative and financial support and incentives to municipalities and private owners for acquisition, demolition, renovation, and/or management of vacant properties. Social rental agencies (SRAs) can be used to facilitate renovations and rental agreements.

• Reassessing REHABITARE and TUYA programmes. The region can revisit how REHABITARE and TUYA align with demographic trends by targeting funding, supporting strategic rehabilitation or demolition, prioritising construction over subsidies, and offering technical assistance to municipalities with limited capacity. Castilla y León could explore using Cohesion Policy funds (e.g. ERDF) to complement regional resources, while also preparing for their better integration in the post-2027 programming period. Synergies with ERUCyL and third-sector actors can help scale impact.

Promoting inter-municipal spatial planning to optimise service provision and resource allocation

Spatial planning in Castilla y León faces co-ordination challenges across municipalities, which can result in low density development, inefficiencies in service provision, and underused housing stock. Many local urban plans are outdated and thus not aligned with regional strategies of densification and sustainability. Fragmented land use planning permits low density development patterns to continue among rural, shrinking municipalities, undermining climate resiliency goals by reinforcing private car use and increasing artificial land cover and dispersing the population in ways that make service delivery more difficult. To address this, stronger inter-municipal co-ordination (IMC), cost-sharing mechanisms, and integrated sectoral planning are needed to ensure land use policies support sustainable development and efficient service delivery. Key actions include:

• Embedding IMC in planning updates. Updates to the Territorial Planning Guidelines should include financial incentives and technical support mechanisms for inter-municipal planning. Inter-municipal planning can be achieved by ensuring all municipalities ineligible for PGOU or NUM plans are subject to Territorial Urban Planning Regulations.

• Finalising UBOST map, incentivise inter-municipal plans, and establish rural service centres. Co-locating services in regional service centres (e.g., the largest settlements within a 30-minute drive, which offer more services than other settlements of comparable size) and improving access to them has been shown to increase the efficiency of rural service delivery (OECD, 2024[4]). The region could fund joint planning efforts through grants and implementation bonuses, backed by technical and legal support. Interim planning could use NUTs to establish rural service centres. Cohesion Policy funding – particularly under ERDF’s Objective 5 (Europe closer to citizens) – could prioritise investment in service infrastructure and governance capacity tied to shared inter-municipal plans and functional geographies such as UBOSTs. Castilla y León could expand the use of integrated territorial tools to support rural service centres and joint planning efforts, leveraging technical assistance and implementation bonuses to overcome capacity gaps in small municipalities.

Adapting multi-level governance and subnational finance in Castilla y León

Strengthening fiscal resilience to demographic change

Demographic change poses a significant challenge to the long-term fiscal sustainability of Castilla y León. The region’s ageing and shrinking population is driving up healthcare costs while limiting revenue growth. A fragmented subnational fiscal framework across regional, provincial and municipal levels restricts flexibility, while reliance on intergovernmental transfers amplifies vulnerability. Declining capital investment and limited infrastructure and employment spending further undermine the region’s efforts to retain and attract residents and businesses. Key actions addressing these challenges include:

• Strengthening own-source revenue to reduce fiscal vulnerability. The regional government of Castilla y León could strengthen own-source revenue by optimising the use of ceded taxes and exploring new levies, such as environmental or tourism taxes, within its competencies. Municipalities could improve local tax bases, particularly property taxation, and enhance fee collection, within the limits set by national regulation. Demographic scenarios, particularly the old-age dependency ratio, can inform medium- and long-term revenue forecasts.

• Adjusting intergovernmental transfers to reflect demographic pressures. The national government should consider adapting fiscal equalisation mechanisms to better reflect the higher costs associated with depopulation and ageing in sparsely populated regions such as Castilla y León. Revising funding formulas for healthcare and social protection will be essential to sustain service provision and ensure adequate support for rural municipalities.

Maintaining public investment aligned with demographic change

Castilla y León’s regional and local public investment faces growing challenges from ageing and rural depopulation. Rising healthcare and long-term care demands strain resources, while transport, digital infrastructure, and economic revitalisation remain underfunded. Fiscal constraints and reliance on national and EU transfers create planning uncertainty, risking deeper urban-rural disparities, talent loss, and weakened territorial cohesion. While Castilla y León continues to rely on EU transfers to finance regional and local investment, the mid-term review offers a window to rebalance programmes toward investment areas that match demographic trends – such as rural infrastructure, ageing-friendly public services, and affordable housing. Key actions include:

• Developing a long-term public investment strategy incorporating demographic trends at the regional level. Castilla y León would benefit from a long-term public investment strategy that explicitly integrates demographic trends into planning and decision-making. This framework should prioritise sectors critical to economic resilience and service accessibility. Alignment with EU Cohesion Policy goals can also ensure synergies with broader European priorities and access to co-funding opportunities.

• Improving public investment planning and delivery at the local level. Municipalities across the region, many of them small and with limited administrative capacity, could be better equipped through simplified administrative procedures, expanded use of digital project management tools, and technical support for project planning, budgeting, and execution.

• Linking conditional funding to inter-municipal co-operation. The regional government of Castilla y León may consider linking conditional regional funding, including investment and service-related grants, to inter-municipal co-operation. This would help reduce service duplication, enhance economies of scale, and optimise infrastructure investment, especially in sparsely populated areas. National transfers, such as the Participación en los Ingresos del Estado (PIE), are unconditional and regulated by the national government, and thus cannot be linked to inter-municipal co-operation by the region.

• Align public services and infrastructure with demographic realities and talent retention goals. To further improve service efficiency and regional attractiveness, Castilla y León should continue strengthening investments in infrastructure and services adapted to an ageing population (e.g. accessible housing, mobility solutions, and care facilities), while also reinforcing rural infrastructure and ensuring that schools, hospitals, and care facilities are aligned with demographic trends to prevent inefficiencies and optimise service provision.

Strengthening the policy framework for demographic change

The policy framework for demographic change in Castilla y León spans multiple government levels and sectors but lacks co-ordination. While regional, provincial, and municipal governments implement measures, these often lack clear problem definitions, causal analysis, or intervention logic. There is no unified system to assess demographic impacts, with monitoring focused on outputs. A more integrated, evidence-based approach would enhance effectiveness and ensure long-term demographic resilience. Key actions include:

• Updating and spatially targeting the national population strategy. Revising the 2019 population strategy to better reflect the diverse demographic realities across Autonomous Communities could enhance the strategy's impact. This includes enabling more flexible, region-specific measures – particularly for areas facing acute ageing and depopulation – through improved funding mechanisms and better co-ordination with subnational governments.

• Formally adopting the already developed regional strategy for demographic change. The already developed framework strategy on demographic change should be adopted by Castilla y León as an official government strategy with clear measures, responsibilities, and a dedicated budget to improve co-ordination across regional, provincial, and municipal levels.

• Strengthening governance, co-ordination and evidence for demographic challenges. Castilla y León could create a co-ordinating body for demographic policies and require demographic impact assessments in policymaking to ensure alignment with demographic challenges. The region could also establish a permanent Observatory for Demographic Change. This body would monitor population trends, centralise research, and support policies. It would enable local governments to anticipate demographic challenges, design evidence-based interventions, and assess policy effectiveness over time.

Optimising inter-municipal co-operation

Castilla y León faces major challenges in delivering public services amid demographic decline. One third of municipalities have fewer than 100 inhabitants, leading to inefficiencies and fragmented service provision. Sparse populations across vast areas make maintaining high-quality, cost-effective, and equitable services and infrastructure increasingly difficult. Although responsibilities are differentiated according to municipal size, rapid population decline in small municipalities worsens the issue. While inter-municipal co-operation is well-established through mancomunidades and other collaborative arrangements, it often remains fragmented, voluntary, and service-specific. Strengthening strategic, long-term co-operation structures is therefore crucial. Key actions include:

• Reinforcing strategic inter-municipal co-operation (IMC). A more strategic and institutionalised form of IMC should move beyond the current functional co-operation. A critical step in this direction is the full implementation of Law 7/2013 (LORSERGO) and to finish the map of UBOSTs to operationalise rural mancomunidades of general interest, enabling a governance structure that allows a more strategic approach.

• Prioritising inter-municipal solutions for smaller municipalities. Rather than relying primarily on municipal consolidation, Castilla y León could focus on strengthening inter-municipal partnerships as a pragmatic and locally acceptable path to improve service efficiency, reduce fragmentation, and support fiscal sustainability. Voluntary mergers could still be encouraged in selected cases, but a broader approach would involve offering incentives and technical assistance for deeper collaboration in areas such as waste management, mobility, or health and social care.

• Investing further in public sector capacity in rural municipalities. Building on existing efforts, expanding training for local officials would improve governance, budgeting, and planning skills, strengthening decision-making and municipal service delivery in rural areas.

• Strengthening rural-urban governance mechanisms to address talent outmigration and demographic imbalances. Castilla y León could reinforce governance mechanisms that enable rural municipalities and nearby towns to work together in retaining and attracting people, particularly young talent, even if the municipalities and towns are in different provinces within the region. Strengthening inter-municipal co-operation and establishing institutional frameworks for shared service delivery, mobility, and economic development can help smaller municipalities offer more competitive living conditions.

• Introducing a rural regulatory sandbox. Testing flexible regulations – such as adjusting social venue hours, reducing telecom costs, and revising service fees – could support economic activity and improve quality of life in rural areas.

Adapting service provision and accessibility in Castilla y León

Optimising rural service provision and school networks

Castilla y León faces persistent service gaps in healthcare, education, and digital connectivity, particularly in rural areas, due to low population density and demographic decline. A fragmented service network leads to inefficiencies, staff shortages, and declining quality. Some schools operate with only a few students across different levels, making them costly to maintain. In addition, delivering services in sparsely populated areas involves higher per-unit costs, which calls for policies that promote economies of scale and scope. At the same time, Castilla y León remains a leader in educational quality, consistently exceeding national, EU, and OECD averages in PISA scores. Preserving this strength while adapting the school network is crucial to ensuring equity and resilience in the education system. A structured approach, including the consolidation of services where appropriate to achieve scale and ensure efficiency, is essential to ensuring service quality and financial sustainability. Key actions addressing these challenges include:

• Strengthening regional service centres to improve access and efficiency. To establish regional service centres in rural areas and consolidate essential services, geospatial analysis should guide placement and EU funding should support infrastructure and improved service accessibility, especially in depopulated areas.

• Optimising the school network while ensuring equitable access. Small, unsustainable schools could be consolidated while maintaining reasonable access. Transport solutions and subsidies would ensure students from remote areas can reach better-equipped schools without excessive travel burdens.

• Enhancing transparency and stakeholder participation in school network reforms. A structured decision-making framework should ensure transparent school restructuring. Mandatory impact assessments and stakeholder consultations will improve trust and encourage municipal collaboration in education planning.

Strengthening healthcare and social services for an ageing population

Ensuring adequate healthcare and elderly care services in the region is increasingly difficult due to persistent labour shortages. The ageing population increases demand for medical and social care, while recruitment challenges limit service availability. Telemedicine and home care have helped but require a larger workforce and further infrastructure investment to remain sustainable. Castilla y León must introduce targeted recruitment incentives, expand rural medical training, strengthen elderly care services, and push for structural reforms to ensure a sustainable healthcare system. Key actions include:

• Attracting and retaining healthcare and elderly care professionals. Castilla y León could offer financial incentives such as salary top-ups, housing subsidies, and relocation assistance. Municipalities could also allocate vacant housing to healthcare workers, ensuring affordable housing options in underserved areas.

• Expanding rural medical training and career pathways. Offering service obligation contracts for students committing to rural healthcare could help address workforce shortages. Strengthening collaboration between universities and healthcare providers may also support better alignment of training with the needs of elderly care and chronic disease management.

• Improving elderly care through community-based and hybrid models. Integrating home care with shared spaces, day centres, and local support networks can enhance quality of life for older residents. Financial support and training for informal carers may also contribute to better care outcomes and help prevent caregiver burnout.

• Expanding digital healthcare and preventive services while ensuring accessibility for the elderly. Castilla y León should expand digital healthcare and preventive services while ensuring elderly accessibility. Telemedicine can improve access and reduce costs but must be balanced with in-person care. AI-powered tools could also support pre-screening, patient-service matching, and reduce administrative burdens, especially in rural areas with limited staff.

• Advocating for structural reforms in healthcare policy. Castilla y León could play a key role in encouraging national-level reforms, such as expanding training in family medicine and geriatrics, promoting workforce mobility, and simplifying certification processes for healthcare professionals and informal carers.

• Facilitating international recruitment and qualification recognition. Streamlining recognition of foreign qualifications and supporting targeted international recruitment strategies – while ensuring ethical recruitment practices and successful workforce integration – could strengthen ongoing efforts at the regional level.

Aligning skills and talent with future labour market needs

Castilla y León’s vocational education and training (VET) system provides a solid foundation for workforce development, but stronger alignment with labour market needs is required. Healthcare, elderly care, and assistive technology are expected to grow as the population ages, requiring expanded training opportunities and digital skills integration. To address these gaps, Castilla y León must strengthen vocational pathways, promote digital and healthcare upskilling, and position itself as a hub for ageing-related industries to attract and retain skilled professionals. Key actions include:

• Expanding and modernising vocational training in healthcare and elderly care. Castilla y León could expand VET programmes in elderly care, physiotherapy, and assistive technology. Strengthening dual VET models through partnerships with healthcare providers would enhance hands-on training, making these programmes more attractive by offering students practical experience and financial support while they study. VET curricula should also incorporate digital health components, such as telemedicine, remote patient monitoring, and assistive technologies, to better prepare future care professionals.

• Developing flexible training pathways and digital learning. The region would benefit from micro-credentials and modular certification to enable continuous upskilling. Digital learning tools would help expanding remote and hybrid training opportunities, improving access for rural students and adult learners.

• Promoting innovation and entrepreneurship in the silver economy. Castilla y León should reinforce its ageing-focused innovation ecosystem, attracting start-ups and investors in digital health and assistive technology. Events such as the International Fair of Innovation and Technology at the Service of Care (FITECU) can position the region as a European leader.

• Strengthening intergenerational mentorship and active ageing. The region should expand mentorship programmes that connect retired professionals with young entrepreneurs in healthcare and ageing-related industries, while also promoting flexible work, targeted reskilling, and volunteering opportunities for older adults. Multi-functional senior centres co-located with local services can serve as hubs for these activities, fostering intergenerational exchange, social inclusion, and labour market reactivation.

Enhancing transport and mobile services to improve accessibility

While Castilla y León’s on-demand transport system has improved rural mobility, further optimisation is needed to better align services with user needs. Many remote villages lack essential services, such as banking, grocery stores, and pharmacies, exacerbating economic decline and social isolation. Strengthening transport connectivity and expanding mobile services would improve access, reduce rural depopulation, and enhance quality of life, particularly for elderly residents and young families considering remaining in shrinking areas. Key actions include:

• Optimising on-demand transport with data analytics. Castilla y León should leverage the predictive analytics from its current on-demand transport system to optimise transport schedules, reducing waiting times and improving efficiency. Aligning transport with users’ appointments will enhance accessibility for rural residents.

• Integrating multimodal transport to improve connectivity. The region could synchronise village transport with regional bus and rail networks. Implementing integrated ticketing and better transfer co-ordination, including on-demand taxis where applicable, will ensure convenient, cost-effective mobility for rural residents.

• Expanding mobile retail and service delivery in underserved rural areas. In remote villages lacking essential shops or pharmacies, Castilla y León could support mobile grocery units, pharmacies, and postal services, particularly through local partnerships or co-operatives. Financial support or logistical co-ordination could help ensure regular service and uptake.

Expanding broadband access and strengthening digital skills

Ensuring universal broadband access and enhancing digital literacy are essential for reducing regional disparities and improving social and economic inclusion. Many rural areas in Castilla y León still face connectivity gaps, limiting access to online healthcare, banking, and education, while an ageing population struggles with digital literacy. To address these challenges, the region should expand broadband infrastructure, support community-led broadband initiatives, and implement digital training programs to ensure all residents can benefit from online services. Key actions include:

• Expanding broadband infrastructure through coverage obligations, public-private partnerships and other incentives. The region could support broadband expansion in rural areas by bundling urban-rural coverage obligations into public contracts. Infrastructure-sharing agreements and investment incentives can encourage providers to serve low-density areas.

• Simplifying regulations to accelerate broadband deployment. Streamlining permits and rights-of-way processes will reduce barriers to rural broadband expansion. Encouraging telecom providers to use grouped project approvals can help to speed up network rollout in urban and rural areas.

• Promoting alternative broadband solutions in remote areas. Castilla y León could support satellite and fixed wireless broadband where fibre is not viable. Rural digital hubs can contribute to improved connectivity, co-working opportunities, and digital inclusion.

• Strengthening digital skills for the ageing population and beyond. While older adults face particular barriers to digital inclusion, expanding free digital training in libraries, community centres, and adult education hubs would benefit the wider population. Tailored programmes for seniors, including help with navigating online services and using digital health tools, could be complemented by intergenerational mentoring programs and a digital helpline.

Action plan

Table 1.1 outlines a series of targeted actions linked to the policy recommendations developed for each policy sector in the report. These reflect the levers available to national, regional and local authorities in adapting to demographic change. Each recommendation is broken down into concrete actions, specifying the relevant actors and indicative timelines. The proposed lead actor, typically the institution with legal authority or technical competence, is listed first, followed by key partners involved in the delivery of the action. Timelines are classified as short-term (1-2 years), medium-term (3-5 years), or long-term (beyond 5 years), which has been determined based on a judgement of the regulatory, financial, and institutional requirements of the action.

Given the breadth and complexity of the proposed actions, it is recommended that the region develops an implementation roadmap. This roadmap should set out a prioritisation matrix based on each action’s expected impact (low, medium, high) and feasibility, including political will, administrative capacity, and financing availability. It should also identify funding sources, such as own-source revenue or EU funds, designate a clear lead institution for each action, and provide a realistic timeline for implementation. Establishing such a roadmap would support effective sequencing, foster alignment across government levels, and enhance transparency and accountability in the delivery of strategies to address demographic challenges.

Table 1.1. Action plan for Castilla y León

Policy sector	Recommendation	Action	Actors	Timeline	Priority
Land use and spatial planning	Update spatial planning to align with population projections	Update the Territorial Planning Guidelines to reflect demographic trends, promote urban regeneration, and limit low-density sprawl.	Regional parliament, Regional government (Regional Ministry of the Environment, Housing, and Territorial Planning, DG for Housing, Architecture, Territorial Planning and Urban Development)	Medium-term
		Ensure all municipalities have updated local land-use plans	Regional government (DG for Housing, Architecture, Territorial Planning and Urban Development), Provincial councils, Municipalities	Medium-term
		Revise urban development and municipal planning regulations	Regional government (DG for Housing, Architecture, Territorial Planning and Urban Development), Municipalities	Medium-term
		Expand Territorial Urban Planning Regulations for small municipalities	Regional government (DG for Housing, Architecture, Territorial Planning and Urban Development), Provincial councils, Municipalities	Medium-term
		Replace outdated subsidiary and delimitation plans to streamline planning	Regional government (DG for Housing, Architecture, Territorial Planning and Urban Development), Municipalities	Medium-term
	Support smart densification	Reform fiscal policies such as taxes and fees to address land underutilisation	Regional government (Regional Ministry of Economy and Finance, Regional Ministry of the Environment, Housing and Territorial Planning)	Long-term
		Facilitate land readjustment, transfer of development rights, and demolition	Regional government (Regional Ministry of the Environment, Housing and Territorial Planning)	Medium-term Long-term
		Leverage developer obligations to limit sprawl	Regional government (DG for Housing, Architecture, Territorial Planning and Urban Development)	Short-term Medium-term
	Match housing supply with demand	Evaluate housing construction permits based on demographic projections in spatial plans	Municipalities	Short-term
		Establish mechanisms to manage vacant land and properties	Regional government (Regional Ministry of the Environment, Housing and Territorial Planning)	Medium-term
		Reassess REHABITARE and TUYA programmes	Regional government (DG for Housing, Architecture, Territorial Planning and Urban Development)	Short-term Medium-term	Talent – through accessible and affordable housing
	Promote intermunicipal spatial planning	Embed intermunicipal co-ordination in planning updates	Regional parliament, Regional government (DG for Housing, Architecture, Territorial Planning and Urban Development)	Medium-term Long-term
		Finalise UBOST map, incentivise inter-municipal plans, and establish rural service centres	Regional parliament, Regional government (Regional Ministry of the Environment, Housing and Territorial Planning)	Medium-term Long-term
Multi-level governance and subnational finance	Strengthen fiscal resilience to demographic change	Conduct a comprehensive review and optimisation of property taxation, including updating property registers and valuations.	Regional government (Regional Ministry of Finance), Municipalities	Short-term
		Use medium- to long-term revenue forecasting that incorporates demographic scenarios, youth-related indicators (e.g. youth out-migration, school-age population trends, workforce entry rates)	Regional government (Regional Ministry of Finance), Technology providers, Research Institutes	Medium-term	Talent – through better forecast instruments
		Review and advocate for updating fiscal equalisation mechanisms to explicitly integrate demographic and ageing criteria.	National and regional government (Ministry of Finance)	Medium-term
	Align public investment with demographic realities .	Conduct a comprehensive demographic and infrastructure needs assessment.	Regional government (Regional Ministries of Finance and Economy), Universities, Research institutions	Short-term
		Formulate a regional investment strategy explicitly addressing demographic change, infrastructure priorities (incl. youth infrastructure), and funding sources	Regional government (Regional Ministry of Territorial Development and Cohesion), Regional parliament, Municipalities	Medium-term	Talent – through better investment planning
		Link funding to conditionalities and inter-municipal co-operation.	Regional government Regional Ministries of Economy and Finance), Municipalities, Public investment departments	Medium-term
		Map gaps in public service delivery and infrastructure responsiveness in rural and ageing communities. This mapping exercise can also identify barriers faced by young people, such as access to childcare, education, digital services, or housing in shrinking municipalities.	Regional government (Regional Ministry of Territorial Development and Cohesion), Technology partners	Short-term	Talent – through better mapping
	Formalise and strengthen the policy framework for demographic change	Officially adopt the existing framework strategy as a binding regional strategy, outlining clear objectives, timelines, and responsibilities.	Regional parliament, Regional Ministry of the Presidency (Directorate-General for Demographic Policy) Regional government	Short-term
		Advocate at the national level for an update to Spain’s population strategy to explicitly target areas experiencing significant demographic challenges.	Regional and national governments (Ministry for Ecological Transition and Demographic Challenge)	Short-term
		Strengthening governance and institutional capacity: Establish a dedicated co-ordinating body for demographic policies at the regional level.	Regional Ministry of the Presidency	Short-term
		Mandate demographic impact assessments for significant new policies and regional investments.	Regional government, Municipalities	Long-term
		Set up a regional Observatory tasked with monitoring demographic trends, assessing impacts, and advising policymakers on strategic responses.	Regional government	Short-term
	Strengthen Inter-Municipal Co-operation (IMC)	Officially define and adopt governance structures for rural mancomunidades of general interest by finalising the implementation of IMC legislation (rural mancomunidades).	Regional parliament	Short-term
		Provide technical, legal, and financial support packages for municipalities engaging in inter-municipal co-operation or voluntary consolidation processes. Support to small municipalities can help ensure youth services (schools, sports, digital access) are maintained or expanded through co-operation.	Regional government (across Ministries), Provincial Councils, Municipalities	Medium-term	Talent – through better IMC and service provision for the youth
		Expand tailored training programmes for local officials on governance, budgeting, and strategic planning in rural contexts.	Regional government; Provincial councils, Municipalities, Training institutions	Long-term
		Streamline project approval procedures and introduce digital project management tools for municipalities to improve investment execution for Eu funded projects	Regional government (Regional Ministry of Territorial Development and Cohesion), Municipalities, Technology providers	Medium-term
		Introducing a rural regulatory sandbox: Pilot flexible regulatory schemes (e.g., adjusted business hours, telecom pricing) in rural municipalities to enhance economic viability to attract young people or enable them to stay	Regional government (Regional Ministries of Economy and Finance), Municipalities	Short-term	Talent – through increased rural attractiveness
Service delivery	Optimising rural service provision and school networks	Strengthening regional service centres to improve access and efficiency	Regional government ((DG for Housing, Architecture, Territorial Planning and Urban Development, Regional Ministry of Finance and Economy), Provincial councils, Municipalities, EU funding bodies	Medium-term
		Optimising the school network while ensuring equitable access	Regional government (Regional Ministry of Education), Provincial councils, Local education authorities	Medium-term
		Enhancing transparency and stakeholder participation in school network reforms	Regional government (Regional Ministry of Education), Municipalities, Parent associations	Short-term
	Strengthening healthcare and social services for an ageing population	Attracting and retaining healthcare and elderly care professionals	Regional government (Regional Ministry of Health), Municipalities, Healthcare institutions	Short-term	Talent – through better job opportunities
		Expanding rural medical training and career pathways	Regional government (Regional Ministry of Education, Regional Ministry of Health), Universities, VET institutions	Medium-term	Talent – through better job opportunities
		Improving elderly care through community-based and hybrid models	Regional government (Regional Ministry of Family and Equal Opportunities), Municipalities, Elderly care institutions	Medium-term
		Expanding digital healthcare and preventive services while ensuring accessibility for the elderly	Regional government (Regional Ministry of Health), Healthcare providers	Short-term
		Advocating for structural reforms in healthcare policy	Regional (Regional Ministry of Health) and national governments (Ministry of Healthcare, Ministry of Education)	Long-term
		Facilitating international recruitment and qualification recognition	Regional (Regional Ministry of Health) and national governments (Ministry of Healthcare, Ministry of Education)	Medium-term
	Aligning skills and talent with future labour market needs	Expanding and modernising vocational training in healthcare and elderly care	Regional government (Regional Ministry of Education, Regional Ministry of Family and Equal Opportunities), VET institutions, Healthcare and elderly care providers, Tech firms	Medium-term	Talent – through adapted training
		Developing flexible training pathways and digital learning	Regional government (Regional Ministry of Education, Regional Ministry of Family and Equal Opportunities), VET institutions, Healthcare providers	Medium-term	Talent – through adapted training
		Promoting innovation and entrepreneurship in the silver economy	Regional government (Regional Ministry of Family and Equal Opportunities, Regional Ministry of Finance and Economy), Business incubators, Private investors	Long-term
		Strengthening intergenerational mentorship and active ageing	Regional government (Regional Ministry of Family and Equal Opportunities), NGOs, Professional associations	Short-term	Talent – through intergenerational initiatives
	Enhancing transport and mobile services to improve accessibility	Optimising on-demand transport with data analytics	Regional government (Regional Ministry of Mobility and Digital Transformation), Transport authorities	Short-term
		Integrating multimodal transport to improve connectivity	Regional government (Regional Ministry of Mobility and Digital Transformation), Municipalities, Transport authorities, Private operators	Medium-term	Talent – through better mobility
		Expanding mobile retail and service delivery in underserved rural areas	Regional government (Regional Ministry of Mobility and Digital Transformation), Municipalities, Private companies	Short-term
	Expanding broadband access and strengthening digital skills	Expanding broadband infrastructure through public-private partnerships	Regional (Regional Ministry of Mobility and Digital Transformation) and national governments (Ministry of Digital Transformation and the Civil Service, Ministry for Ecological Transition and Demographic Challenge), Telecom providers	Long-term
		Simplifying regulations to accelerate broadband deployment	Regional and national governments (same as above)	Short-term
		Promoting alternative broadband solutions in remote areas	Regional government (Regional Ministry of Mobility and Digital Transformation), Telecom companies	Medium-term
		Strengthening digital skills for the ageing population and beyond	Regional government (Regional Ministry of Family and Equal Opportunities, Regional Ministry of Education), Municipalities, Community centres, NGOs	Short-term

Source: Author’s elaboration

References

[2] EC (2023), Harnessing talent in Europe’s regions, Communications, 17 January 2023, https://ec.europa.eu/regional_policy/information-sources/publications/communications/2023/harnessing-talent-in-europe-s-regions_en.

[1] INE (2025), Datos de la estadística continua de la población, Demografía, Castilla y León.

[4] OECD (2024), Getting to Services in Towns and Villages: Preparing Regions for Demographic Change, OECD Rural Studies, OECD Publishing, Paris, https://doi.org/10.1787/df1e9b88-en.

[3] República Portuguesa (2024), Retain talent, support young talent, 8 August 2024, https://www.portugal.gov.pt/en/gc24/communication/news-item?i=retain-talent-support-young-talent.