Experiences of the Liberalisation of Public Services in Sweden A short overview
What the presentation will cover Liberalisation of state services Responsibilities of local authorities and regions in Sweden ”Liberalisation” of local and regional services »Liberalisation or market use? »Facts and figures »Development »Debate
Liberalisation* of markets in Sweden Network industries Railways (partly)1988 Domestic aviation1992 Postal market1993 Telecom market1993 Production and sale of electricity1996 *Markets are deregulated or more precisely regulations that promote competition are imposed.
Some effects of the liberalisation Prices has decreased where new competition has managed to get a sizable market shares. Prices has gone up where the previous state monopoly company maintans a dominant market share.
Some effects of the liberalisation Telecom »Lower prices and more and better services. Postal services »Higher cost for letters, lower cost for packages. »Restructuring of state postal service that improved accessibility and service. Energy market »Lower prices when tax and production costs are deducted.
Responsibilities of local authorities and regions Compulsary Social services Care for the elderly and disabled Kindergarten, nurseries Primary and secondary schools Town and country planning Waste management Rescue services Crisis management/readiness Volontary Leisure and sport Culture Housing Energy Business promotion County Councils Health care Economy 20% of GNP
The law and external provision of services - anything but exercise of authority Local Government Act, 3:16 Municipalities and county councils may... transfer the management of a local government concern, for the conduct of which no special procedure has been prescribed, to a limited company, a trading partnership, an incorporated association, a non- profit association, a foundation or a private individual. … however, the management of a concern which includes the exercise of authority may only be transferred if there is statutory support for so doing….”
Privatisation or Market Use? Public financingPrivate financing Public production 1 Publicly managed 2 e.g. waste collection Private production 3 Procured services ”outsourcing” 4 Privatised e.g. electriciy company is sold
Public control and private providers Democratic control Control and financing Service provision
How much is provided by private service providers?
Camparison between Sundsvall and Solna Towns - Care for the elderly in private hands Solna: inh. Sundsvall: inh.
Solna Town – external providers - Child care
Solna Town – external providers -Infrastructure
Why outsourcing? Reasons in the beginning Need to save money Ideology
What are the effects? Initially costs where reduced. In the long run, costs increase to previous levels. Demands on the quality of services rise. Management, cost and quality control is improved. Effectiveness is improved. Better management of internal operation. Spill over effect from the control of external activities.
Current development From strategy for rationalization… …to strategy of development. From shortsighted cost chasing… …to a long term focus on sustainable quality.
The challenge To guarantee the citizens good quality. To ensure development of services. To ensure long term solutions.
Current debate Costs will increase due to aging population. There are rising demands on quality. Near consensus on public financing of services. Public services must be more effective… …and private providers will play an important role. Profit making hospitals? (County councils) Controversial issue. ”Stop law” issued – under legal review.
Summary: Local and regional public services and the private market in Sweden Freedom to choose how to provide services. Public services are not privatised, they are outsourced through public procurement. 15% of services are outsourced today. Large difference between authorities. Outsourcing not a clear ”left-right” issue. Focus on developing both in-house and outsourced services.