The paper is based on the observation of the process of reviving the forgotten culture of household economy, horticulture and livestock farming in disadvantaged rural areas and, through this, to develop a new service model for rural communities to strengthen the role of grassroots initiatives and enhancing the mechanisms of the co-operative model of local economy and democracy. Our research has shown that bottom-up models have several barriers to local governments in rural areas. The change in the political and governmental model of the last ten years has resulted in the restraint of local government autonomy and the vacancy of the role of local governments as public service providers. In this system, we can observe the strengthening of administrative dependence, the devaluation of the local elected political leadership (mayors) and the emergence of new rules of local power. In small settlements with less than 2,000 inhabitants, central state and political dependence intensified. Attempts to strengthen local communities have proved to be a major challenge in a highly centralised model of government. The present study gathers the factors that hinder the success of co-creative approaches in the local context and shows how the public service innovations organised by local governments are determined by the political and economic culture prevailing at the national level.