DEVELOPMENT TRENDS IN THE PUBLIC SECTOR IN NORWAY A quiet wave of reforms

In the past 20 years a number of changes and reforms have been made to the public sector in Norway. Some 60-70 public administrations have been made independent. For example, Televerket - the telecoms organisation - has become Telenor AS, quoted on the stock exchange. Statens bygge- og eiendomsdirektorat - the government’s buildings and property directorate - has been turned into Entra AS, a state-owned limited company. Luftfartsverket - the civil aviation authority - is now Avinor AS. Hospitals, which were largely managed by local authorities, have now been turned into state-owned enterprises. In line with this the management of many public administrations has also been changed. The enterprises that have been made independent are run by establishing framework agreements, contracts and monitoring. During the past ten years a range of new monitoring systems have been introduced to ensure that the independent enterprises follow legislation and regulations. Many local authorities have reorganised themselves and become two-tier systems in which individual undertakings (such as day nurseries or nursing homes) are turned into financially devolved units, are given a great deal of administrative freedom and subject to control by an administrative director. And so they are run more in line with private enterprises, becoming service delivery suppliers similar to those in the private sector. This also allows public services to be subject to market forces. New systems for distributing public resources have been introduced, in which various forms of unit pricing produces pressure towards marketisation and the use of private suppliers. This is particularly true of hospitals and in higher education. Changes have also been introduced in the care sector, based on the idea that "money follows the user". Some would even say that local authorities, following a neoliberal pattern, will be reduced to being professional purchasers, whose purpose is to help develop markets and competitiveness and provide people with money to cover the minimum amounts for the basic costs of the welfare state - education, care and health. Important changes have also been proposed and, in part, carried out in the labour market - hiring and hiring out workers, changes in regulations regarding working time, overtime and temporary employment. Elected representatives are daily made aware that hard-won rights are under pressure. The flood of reforms has continued under both right and left-wing governments. Following strong pressure from trade unions, the current red/green government has put considerable emphasis on its government programme to develop collective solutions and to strengthen public welfare services. Pension reforms. One of the prime political issues in Norway is the reform of pensions. In 2005 most political parties reached agreement on the major principles of a new pensions system. The new pensions scheme has been given the mellifluous title “Modernised Security for All.” Despite this name, it has the same purpose as all “modernisation” pension schemes in other European countries in recent years, which is to limit the growth of expenditure on old age pensions. The last - right-wing Bondevik - government proposed a pension scheme aimed at reducing the cost of the old age pension in 2030 by NKR 25 billion (in 2005 terms). That is, by a 14% reduction on today’s national insurance costs. By 2050 costs may reach NKR 38 billion, or by as much as 17% unless there are reforms. It is nevertheless worth pointing out that even that without reform the cost of state old-age pensions will more than double by 2050 when compared with today. The government is working on more detailed plans for this pensions scheme and plans to propose a new state old-age pension system to parliament in the autumn. It will include a model as to how pensions are saved for - that is how the right to an annual pension is earned throughout life - and how and when individual pensions can be taken up. It is assumed that these reforms will come into force on 1st January 2010. Increased participation in the labour market and the aim of full day nursery coverage A crucial trend in the labour market over the last 30-40 years has been the increased participation of women. Few countries have as large a proportion of women in paid employment as Norway. At the same time the birth rate remains high compared to most other European countries. There is broad unanimity amongst researchers that this unusual juxtaposition is due, to a large extent, to the fact that the conditions needed for women’s participation in the labour market have been sorted out, both in terms of the length of maternity leave and full coverage of day nursery provision, with an upper limit on nursery fees. It is believed these aims will be fulfilled during the course of 2007. New work and welfare administration Work has been going on for a long time planning a new work and social welfare administration known as NAV. The labour market and national insurance administration was replaced on 3rd July this year by the Work and Welfare Directorate. Unemployed, sick and disabled people, and those in need of income support will in future have just the one office to attend, the NAV. In cooperation with councils the government will establish new work and welfare offices in every single local authority in the country. These will also be able to provide intermunicipal solutions when necessary. This is the greatest administrative reform in the country’s history, affecting 16,000 posts in the labour, national insurance and social welfare administrations, disbursing NKR 265 billion in income support payments. The new administration has until 1 January 2010 to open the new work and welfare offices. The local authority social services will retain their duties. Increased investment in health and personal care The changing demographic pattern will create demands for a strong increase of resources to cover the demand for important welfare services over the next decade, even without increasing the quality of the provision. The general pace of social progress and increased prosperity also increases expectations of local authority services, and will further strengthen the need for improved resources. In order to meet this challenge the new "red-green" government has determined that there shall be 10,000 new posts in caring services before 2009. This objective will be followed up by increasing the free part of local authority income in the government’s budget for 2006. It has also been decided that a plan is to be worked out to redress the lack of balance which local authority finances was saddled with during the previous period of rightwing governments. In the health service as well as in the caring services there is a debate about using private providers. Rightwing governments have aimed at increasing the use of private providers, but the present red-green government’s objective is to strengthen public responsibilities within central welfare provision such as health, care and education. It is interesting to note in this context that it was a social democratic government which rapidly reformed hospitals (in 2001) so as to make plain the government’s ownership and responsibility for hospital services to the public, but which would clearly contain elements of New Public Management. Financial arrangements have been put in place which enable the use of private service providers, including performance related financing for certain hospital treatments (1997). Several local authorities have adopted similar arrangements for their care services. The majority of the larger councils organise these services on the lines of purchaser-provider principles. Quality indicators The "red-green" government wishes to invest in developing quality services in the public sector: Central government The Modernising Department is to establish a system known as StatRes to develop and provide knowledge about public sector production, quality, results and use of resources. StatRes will be made available through an internet portal which will make data available for the whole of the state sector regarding organisation, use of resources and results. All information should - insofar as is possible - be comparative over time and sectors. According to the plan the information will be available over the internet in 2007. During the 2005-2009 parliament all government administrations will carry out regular user surveys which will be made public. Local authorities Work to establish good systems for measuring the quality of local authority services is currently undertaken in several areas, including efforts to develop quality indicators based on key figures in KOSTRA (KOSTRA is the national information system providing information about management of local authority services. Information about local authority services and the use of resources in various service areas is registered and compiled to provide relevant information to decision-makers at the national and local level). A working party consisting of the Local Authorities’ Association, the Statistical Central Office and the Department for Local and Regional Government has brought out a framework for quality work. This is the basis for the 16 KOSTRA working parties which are to provide proposals for quality indicators in the various services areas for which they are responsible. The working parties will conclude their work in 2006. The Statistical Central Office is aiming to publish quality indicators for the first time by the spring of 2007. It may be expected that the preparation of these quality indicators in the public sectors will eventually have considerable influence over both the formulation of service provision and the management of the sector. Administrative reforms The Soria Moria declaration lays down that there shall be three tiers of administration elected by popular vote in Norway, and that a new, strengthened regional administrative level is to be established. The administrative reform is considered an important part of the government’s renewal of the public sector. The principal aim of the reform is to ensure a three tier public sector which works well. The reform is also meant to be a realistic response to the challenge that local authorities have currently taken on as to their legitimacy, the need for energetic action and their role as a local development player. It is assumed that duties, power and authority will be transferred to the new regions, whilst the changes and outcomes will be evaluated for the whole administration. The administrative reforms are meant to contribute to achieving the following objectives of the political leadership of the Local and Regional Authority Department:
  Strengthening democracy at the local level by decentralising power and authority and providing a clear division of responsibility between administrative levels.
  Creating value and employment, based on local and regional advantages and conditions, to the benefit of residents and business, to secure the future basis for well-being in society.
  A more coordinated and effective public administration so that different sectors are seen as a connected whole within individual regions.
  Effective protection of national objectives such as sustainable development, provision of services of equal value and legal rights for individuals. These are strong political signals which will have a significant influence over the development of public services. Designing public transport in major towns and cities In Oslo and Akershus a cross-party group has recently finished planning the 3rd Oslo Package. This is a transport plan comprising of new roads, a public transport and an environmental initiative, in which the last element will be the most important. The whole of the 3rd Oslo package has financial implications of NKR 53.4 billion, and will be the largest investment ever in transport in Norway. It is of enormous importance and will lead to a considerable improvement for the welfare of very many people in the most densely populated areas of the country. And in Bergen it has recently been decided to build a light railway system.