(November 2011) A report by the SNS Centre for Business and Policy Studies concludes that there is no clear evidence of any efficiency benefits arising from the private provision of welfare services or the increase in competition.
Konkurrensens konsekvenser. Vad händer med svensk välfärd? (The consequences of competition. What has happened to the Swedish welfare system?) provides background on the major restructuring of welfare services carried out in Sweden over the last 20 years.
There has been an increased role for the private sector through outsourcing or the creation of competition through voucher or choice systems that allow service users to choose their provider. Around a fifth of employees in the welfare sector – education and social services – are now employed by private companies.
Lack of evaluation
The centre-right governments promoting these reforms have argued that privatization and liberalization would help reduce bureaucracy as well as boost quality and choice by allowing citizens choice in service provision. The report stresses the fact that these changes have been implemented over a 20-year period without any serious attempt so far to evaluate the outcomes.
The SNS research examined a range of studies that had investigated privatization and liberalisation across several different services – preschool and school education, individual and family care, health care, social policy and help for the elderly and disabled. It stressed that there is a major challenge for researchers in arriving at reliable ways of measuring quality especially when assessing services dealing with different users who have different characteristics and requirements.
Question of choice
Choice of services can be seen as positive in itself but there is a real question as to how this works in practice for public services and whether citizens are able to form a clear opinion of and make informed choices between the services offered by different providers.
The report did find several studies suggesting that user satisfaction is slightly higher among people who have chosen to use private providers. However, the researchers are cautious about drawing conclusions because of the difficulty of making comparisons on quality and because of the possibility people will tend to justify the choice they have made.
Research from outside Sweden indicates that allowing more choice in welfare services risks creating a two-tier system, as the better off are more inclined to spend the time and resources on making an informed choice. So far there is only some evidence from the school sector of this tendency.
Need for regulation and monitoring
The report notes the special nature of welfare services and the importance of balanced regulation, monitoring by government and the need for people to be well-informed to make the right choices.
The researchers argue that in light of the vulnerability of many recipients of welfare services it is important to try to ensure that they are getting the best service. It is not enough to simply assert that privatization will deliver this as a matter of ideological certainty.
The SNS is committed to further research on the issue with the involvement of representatives of municipalities, county councils (regions) and private providers.
Konkurrensens konsekvenser. Vad händer med svensk välfärd?, Laura Hartman, Anders Anell, Eva Mörk, Jonas Vlachos, Kajsa Hanspers, Martin Lundin, Marta Szebehely, Stefan Wiklund, SNS, September 2011
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