Response to interpellation 2023/24:195 on the Choice System Act
Translated from Swedish by AI; the translation may contain errors. The Swedish text is the original.
Summary AI, written in advance
M considers freedom of choice to be fundamental and that competition can improve quality 1. M argues that welfare crime should be combated without restricting freedom of choice and that the government strengthens control against unserious actors 1 2. M emphasizes that both private and municipal housing can be of high quality 2. M believes in the individual and freedom of choice 3 and argues that municipalities have tools to counter unserious actors 3. M argues that healthcare employees focus on their jobs regardless of the form of operation 4. S expresses skepticism towards profit-seeking and argues that freedom of choice systems complicate the organization 5. S argues that the right of establishment enables organized crime 6. S advocates that the law on freedom of choice systems should be fundamentally reformed 7. S wants to take back democratic control to ensure fair wages and working conditions 7.
Written by AI in advance and may contain errors. The numbers lead to the speech a statement builds on; check against the text below.
Statsrådet Anna Tenje (M)
Madam Speaker! Markus Kallifatides has asked the Minister for Social Affairs if he is prepared to take the initiative to abolish the right of free establishment. The work within the government is distributed such that it is I who am answering the interpellation.
The purpose of the Act (2008:962) on choice systems is that individuals shall have the opportunity to choose the providers of welfare services themselves. Markus Kallifatides states that companies can freely establish themselves if they meet the municipalities' minimum requirements. I want to emphasize that the municipalities' requirements can be high and that not all municipalities have choice systems. It is also possible for a municipality that has established a choice system to decide to terminate that arrangement. These conditions in themselves imply a limitation of the establishment opportunities.
Madam Speaker! The Government safeguards the freedom of choice and the individual's right to choose the provider of a welfare service. Functional competition in the care market can create better conditions for both municipal and private operations to continue working to improve quality and to increase competence in the operation. Freedom of choice can be of benefit for both users and staff. More providers mean that the staff have a variety of employers to choose from, but above all, it gives the individual an opportunity to choose who they want to receive care and nursing from. For me, freedom of choice is as fundamental as it is self-evident.
It is, however, serious that welfare crime has entered several areas of society, including in care. But using welfare crime as a reason to restrict freedom of choice cannot be the answer. Instead, we must combat unserious actors and welfare crime across all sectors. The Government has taken several initiatives in this area and is following the developments very closely.
I want to particularly highlight that since July 1, 2023, the municipalities are also responsible for crime prevention work. That work includes strengthening the preventive work against economic crime and welfare crime. For the government, it is important that tax revenue is used as effectively as possible. Municipalities, regions, and state agencies need to strengthen their knowledge of and receive better tools to detect and prevent unscrupulous actors in procurement, contract drafting, and also follow-up. The government has also given the Crime Prevention Council a mandate to develop the national support in crime prevention work (Ju2023/00472). The mandate includes, among other things, providing needs-based and practical support measures to municipalities and other actors.
I also want to emphasize that since 2019, a permit from the Inspectorate for Health and Social Services is required to operate activities within several welfare areas, such as home care, nursing homes, and assisted living for the elderly. At the same time, the government and I see that this is not sufficient.
It is important to address welfare crime, not least because we have other major challenges within elderly care, which Markus Kallifatides also mentions in his interpellation. The supply of competence within elderly care is a major challenge, Madam Speaker. The staff's conditions also need to be improved, which affects almost all municipalities and independent actors.
That is why it is important that we do not only discuss operating models but also can join forces to tackle the challenges that exist within this sector. In that case, everyone is needed – municipalities, private operators, and also the state.
The government therefore allocates 1.7 billion annually until and including 2026 for the so-called Äldreomsorgslyftet. In the budget bill for 2024, which has now been passed, the government also allocates approximately 16 billion kronor to the municipal sector specifically to strengthen welfare. Elderly care is a priority issue for the government and for me, and several measures have already been taken to improve the conditions.
Markus Kallifatides (S)
Madam Speaker! I thank the Minister for the answer to my interpellation. My interpellation concerns the law on choice systems and the right of free establishment for private actors according to that legislation. My interpellation does not concern the possibility for citizens to choose between different providers of welfare services. For that purpose, there is otherwise another fully functioning legislation: the law on public procurement.
According to the latest government investigation in the area, freedom of choice according to LOV has at some point been introduced in 179 of 290 municipalities. 21 of these have chosen to abolish their systems. In October 2022, there were 158 municipalities that operated at least one freedom of choice system in their municipality. It is primarily within the home care area that municipalities establish freedom of choice systems according to the Act on Freedom of Choice Systems.
Madam Speaker! For such a mandate relationship between the public sector and a private contractor to be able to function as intended, three conditions must be met: a carefully specified contract, information on what has actually been performed, and sanctions if the contract has not been followed by the contractor. This is completely fundamental economic organization theory, which I have taught for 25 years of my life.
These challenges also exist when activities are carried out in-house, but solutions such as choice systems with free freedom of establishment complicate the whole matter. The conditions change when the public procurer is no longer the employer of the person who performs the actual work. The employment agreement is a completely different type of agreement than the procurement contract. To that is added that democracy, objectivity, legality, freedom of opinion, equal treatment, freedom of information, and the principle of public access are neither a norm nor a paragraph in the Companies Act, Madam Speaker.
For that reason, I have a fundamental skepticism towards profit-making in the tax-funded welfare system. Here, Madam Speaker, there is likely a deep-seated difference in worldview between the Minister and me. It is, as the Prime Minister usually says, okay to think differently.
Something that often disappears from the debate is the cost of establishing and administering choice systems for the free establishment. In recent years, a number of municipalities, as I said earlier, have terminated their choice systems precisely with reference to the administrative costs of the systems.
In the investigation report Municipalities' and regions' costs for choice systems - a knowledge base, it is shown that there is generally a noticeable lack of knowledge regarding specifically the administrative costs of regions and municipalities for the choice systems. But that investigation simply did not have the mandate to also attempt to estimate how large these costs are in reality. That in itself is, of course, striking and a direct result of the market fundamentalism that has characterized this chamber for decades. It seems there is almost a kind of thought ban in the area.
My follow-up question to Minister Anna Tenje is: Is it not time to at least find out what the entire market system in the welfare sector costs the taxpayers?
Eva Lindh (S)
Madam Speaker! In the spring of 2014, I was an opposition councillor in Linköping. We were visiting Södertälje. The municipality of Södertälje had encountered major problems with unscrupulous contractors and costs that had skyrocketed. It was evident that LOV, the Act on Choice Systems, opened the door for fraudulent companies that exploited people to enrich themselves at the taxpayers' expense. Despite the municipality strengthening its controls, they had not succeeded in curbing the fraud. Then, the LOV system was abolished in Södertälje.
We were in opposition in Linköping at the time, so there wasn't much that could be done about this then. But when we won power in the autumn of 2014, we prepared a decision, which we passed immediately when we took over in 2015, to audit all companies within LOV. We didn't know it then, but we soon became aware that even in Linköping Municipality, there was a very large amount of cheating among the home care companies.
Since then, 16 of 21 home care providers have been terminated because they did not meet the requirements in the agreements. They have, among other things, systematically invoiced the municipality incorrectly, which has led to increased costs for the municipality. Due to the deficiencies we had found, Linköping Municipality later decided to abolish the LOV system within home care. But a corresponding choice to abolish it does not exist within the regions.
The trade union Kommunal has warned several times that the law has resulted in companies competing with poor working conditions. Some municipalities that have introduced stricter controls have also found extensive abuse. We can state that the right of free establishment enables organized crime. So we cannot have that. We need to review the rules for the right of free establishment. As a first step, we should at least abolish the compulsion that the regions have. Since it is mandatory for them to apply the law on choice systems, they have no freedom of choice.
Besides the fact that this would mean better governance, we would also get increased quality and need to allocate fewer resources to extensive controls, which are very difficult to perform. We also saw that in Linköping – even though we saw the cheating, it was difficult to find evidence.
Everything indicates that the methods for bypassing the system have evolved, and it is evident that the cheating continues on a fairly large scale. This year, a joint agency report from among others the police, Skatteverket, Säkerhetspolisen, and Arbetsförmedlingen described a deeply worrying development. Economic crime is becoming increasingly common among organized criminals, and healthcare is on its way to becoming a new so-called "cash cow." Gang criminals have begun to operate health centers and vaccination clinics.
We agree that we need to tackle gang crime and criminality. This is not worthy of Sweden. Here is a simple thing one could do to really get rid of a lot of the cheating that exists: Abolish LOV! Or at least reform the law on choice systems.
Statsrådet Anna Tenje (M)
Madam Speaker! It is quite obvious that it is ideological differences that also underlie this interpellation. Perhaps welfare crime will become yet another pretext for discussing the abolition of free choice.
Freedom of choice is a very prioritized issue for the government, but welfare is even more prioritized. In a tough economic situation, we have had to be cautious in order to bring down inflation as quickly as possible, but in tough times, the government chose to allocate the largest part of the reform space to precisely welfare.
We have also, among other things, commissioned inquiries into introducing language requirements, expanding support for relatives, and strengthening medical competence within elderly care - precisely so that the content of elderly care shall be stronger. We also support the development of welfare technology and are developing, not least, the Elderly Care Boost (Äldreomsorgslyftet), which I touched upon in my opening remarks. Strengthening the quality of welfare is something that I and my ministerial colleagues work on daily.
I do not share the interpellator's description of reality regarding the private alternatives in welfare. Contrary to what the interpellator states, competition is something that can benefit both the elderly patients and the employees. By strengthening the individual's options, for example, an elderly person in need of home care is given the power to choose the provider themselves based on their own needs. In the same way, employees in the same situation get a variety of employers to choose from instead of only having, for example, the municipality or the region to choose between.
Unfortunately, this does not work flawlessly. There are private actors who do not meet the standard, which was obviously the case in Linköping, just as there are municipalities that do not always maintain the level that is desirable. In my role as Minister for Seniors, I have visited very many special housing units, and I can state that there are fantastically good private residences - just as there are fantastically good municipal residences. However, there are also less good residences in both municipal and private management. We need to counteract all bad actors, completely regardless of whether they are private or public.
When it comes to criminal elements within the welfare sector, they must, of course, be combated with the full force of society. The Government has also taken this very seriously. There have been, and for a long time have been, alarms that organized crime is present and exploiting the systems – draining the welfare sector of money and, above all, participating in the activities as unserious actors. I agree with the interpellor that this has been known for a very long time.
It is only to be regretted that the previous government, which was governed by the interpellant's party, did not take this seriously enough and was slow in its actions. Now, instead, we are increasing the pace of the work against subsidy fraud, and we take welfare crime seriously - among other things by reviewing Ivos's prerequisites and through the establishment of a payment authority.
Tax money must definitely not go to organized crime, but at the same time we must safeguard the free choice. In this case, it is a matter of holding two thoughts in mind simultaneously, and there is no contradiction between them.
Markus Kallifatides (S)
Madam Speaker! I must remind you of what I said initially: My interpellation did not concern freedom of choice, but it concerned the law on freedom of choice systems.
The Expert Group for Studies in Public Economics stated in the 2017 report *Dags för omprövning* that choice systems of various kinds have resulted in an increased supply and influence for users in some areas, but that this influence is unevenly distributed across the population and furthermore gives rise to a number of undesirable effects.
In the same report, it is stated that choice systems based on school fees and other flat-rate payments have the characteristic that the entire profit from any potential increase in productivity remains with the company owners and is therefore less interesting from a public finance perspective. It simply does not result in any efficiency for the taxpayer, even if the operation were to be made more efficient as a result of competition.
However, it could result in a saving if the flat-rate compensation is lowered, Madam Speaker, and perhaps this is the core of the matter. Could it possibly be that the real goal with many of the freedom of choice reforms from the Alliance years 2006-2014 was, in practice, to lower the municipal and state expenditures for the operations and enable responsible politicians to lower taxes and maintain an arm's length distance to the increasingly harsher reality in welfare?
Thus says the municipal worker and safety representative Anna Collin in the newspaper Arbetet: "We can no longer guarantee the individual care that is promised. We also cannot contribute with safety and continuity because we are affected by chronic understaffing. We rush through our shifts and there is zero room to see an individual. We have to leave those who are facing death alone for longer periods and hope that the person does not pass away before we have time to return. It is hell. It is undignified. It is Swedish elderly care 2023."
Professor Marta Szebehely has reported that the number of users that home care staff manage per work shift has increased from four to twelve per day since the 1980s, Madam Speaker. Twelve in one work shift, compared to four!
Madam Speaker! Is it possibly for that reason that right-wing politicians care so much about precisely the law on choice systems and the right of free establishment? The Minister is mixing up the question of this specific legislation with the broader question of choice and actually talks about quite many different things in his interpellation answer to me.
Is it about moderate ministers and local politicians of various party colors across the country being able to continue cutting back on elderly care - and furthermore receive help with the marketing of this misery from profit-seeking entrepreneurs with insecure and vulnerable part-time employees who do not have the strength to fight back? Is that why, Anna Tenje, I cannot get a concrete answer to my fairly simple question about whether the government is prepared to limit the right of free establishment within the law on choice systems? I want a yes or a no.
Eva Lindh (S)
Madam Speaker! Yes, the question is certainly ideological – but perhaps not in the way the Minister means.
We are, as said, not against freedom of choice. We think it is good that both municipalities and regions can choose for themselves how they want to manage care and healthcare. But as my colleague Markus Kallifatides has said, it is possible to have freedom of choice with the help of different legislation. However, we prioritize welfare. For us, welfare is so incredibly important. The money that goes to welfare should go to welfare and not to anything else; it is an important issue.
Gustav Möller, former Minister for Social Affairs, has been quoted earlier today. I want to quote him again: "Every wasted tax krona is a theft from the people." Therefore, we must be careful with the money. If we see that money is now going to something else, we must put a stop to it. That is why we think it is so important, ideologically and morally, that the money we send into the system and which is to be used for such important healthcare is not cheated away.
We have seen it time and again. I want to highlight Region Stockholm, because there they have really focused on this and scrutinized it over the past year. Already, 125 million in suspected fraud has been discovered. We must take this seriously, because as was said, these are funds that should go to the welfare system.
Again: Is it not time to review, at least reform, this legislation to limit the possibilities for fraud within our important welfare?
Statsrådet Anna Tenje (M)
Madam Speaker! There is obviously a clear dividing line in Swedish politics between those who believe in the individual and see the human being and those who believe that the state always knows best.
The interpellator raises, among other things, in their question the welfare crime, which we have touched upon several times, and that it should be a reason to abolish the law on choice systems. Welfare crime is definitely a serious problem, and I take it most seriously. Our government has done more when it comes to combating welfare crime and benefit crime than the previous government managed to do during eight years. It was seen coming, but it was chosen not to do anything about the matter. I think that is serious.
I believe in the individual, and I believe in freedom of choice. We give municipalities and regions the freedom of choice to introduce LOV or to abolish LOV, which many municipalities have also done, just as the member said earlier. But there are also municipalities that choose to introduce it again.
We give municipalities and regions tools to counter unserious actors. Municipalities that have LOV can set requirements for the individual actors who establish themselves in the municipalities. They can also choose to terminate the agreements they have had. I expect municipalities and regions to use the tools available to ensure good quality and that agreements with individual actors who are unserious are terminated. At the same time, the government also strengthens the work against welfare crime in other ways. Freedom of choice and security are not opposites.
The interpellator does not want to talk about freedom of choice and repeatedly claims that the interpellation is not about freedom of choice. But I believe we all actually know that this is just a convenient excuse for the interpellator. To say that one should limit the freedom of choice for citizens is, of course, quite uncomfortable, but that is the consequence of saying that one is no longer allowed to have LOV.
In the municipalities, one has the right to introduce LOV but also the right to remove LOV. I think that is the height of democracy and freedom of choice.
The interpellator, however, does not think that there should be private alternatives within the welfare sector. He has previously been clear that he believes all private companies should be removed from the welfare sector. Freedom of choice is not something the interpellator believes in; rather, it is the public sector that should choose for you.
There are today approximately 40,000 Swedes who receive home care in private management and 17,000 Swedes who live in a special housing facility operated by a private actor, and this is only within elderly care. In addition, there are others who have made many private choices within welfare.
I respect these people's choices, and I want us to resolve the deficiencies we have within the welfare sector while simultaneously ensuring the individual's freedom of choice to decide who they should receive care from and who should visit them in their home to perform the care that our welfare system has arranged for.
The interpellor wants to undo these choices instead. I truly regret that, but it shows the very clear difference between us.
Markus Kallifatides (S)
Madam Speaker! I cannot get across the obvious truth that this was about the law on choice systems and not about the possibility of establishing different options for citizens in welfare - they are two different issues. But I cannot get across.
I have also asked two concrete questions. One was whether it is not time to investigate the administrative costs for the management of the choice systems. I am waiting for an answer. The other was the simplest question of all: Is the government prepared to do something about the right of free establishment – yes or no? I think I hear a no, but the minister is welcome to confirm it.
Madam Speaker! After these 14 years with the Act on Choice of Care System, why not take a lesson? The Minister emphasizes in his answer to me that since 2019, a permit from the Health and Social Services Inspectorate, Ivo, is required to operate activities within several welfare areas, and that this in itself constitutes a limitation of the free right of establishment in LOV, but that the government sees that this is not sufficient. It must also be a major restriction of freedom of choice that the state forces regions to use LOV within primary care and so on.
I would like to thank the Minister for the debate and wish her a Merry Christmas. Christmas is the festival of light and hope, so I hope that the Moderates will also come to a more profound insight during the Christmas break regarding the difference between public organizations, where one serves the citizens, organizations where one serves, for example, God, and private organizations, where one serves the shareholders.
We Social Democrats are determined to take back democratic control over the welfare system and ensure that all citizens receive the welfare services they are entitled to, distributed according to need and financed according to ability to pay, that welfare workers have the right salary, the right competence and the right working conditions, and that criminal gangs are not even allowed anywhere near our tax-funded welfare, Madam Speaker. The law on choice systems and the right of free establishment should be reformed fundamentally.
Statsrådet Anna Tenje (M)
Madam Speaker! I also, of course, want to thank the interpellor for a very good debate and now, as it is almost Christmas, wish that the interpellor gains a little deeper insight and also comes up with some better thoughts, just as he wished for me.
One can observe that there is a very clear dividing line in Swedish politics. It has been so for a long time and will well likely remain so. I still think it is pleasing that the Social Democrats have finally woken up now regarding welfare crime and benefit crime and are willing to use the heavy hand when it comes to the criminal elements and organized crime, which profit at the expense of the taxpayers and the welfare system. This is very pleasing.
This government takes these issues very seriously. We have already taken many measures and will, of course, return shortly with significantly more.
Unlike the interpellor, I am completely convinced that the employees in healthcare and elderly care, and in our special housing, regardless of whether these are municipal or private, serve and support our elderly and those in need of care and support. They do not primarily think about in which operating form, within which company or within which municipality they work, but they are there to do their job, that which they are trained for and on which they have their strongest focus. Whatever housing I have visited, whether it is municipal, private, or run by non-profit forces, this is the employees' focus. I also hope that the interpellor does not believe anything else.
Source: The Swedish Parliament. The speeches come from the open data of the Riksdag, translated into English by AI, which may contain errors.