There are many reasons why municipalities with systems of choice must employ open and clear financial follow-ups for their own operations subject to competition. This is emphasized in a pilot study, where the Swedish Competition Authority investigates the competition in three municipalities.
An increasing number of municipalities have introduced systems of choice that make it possible for its residents to choose between different service providers for home care. In 176 of the country's 290 municipalities, residents are able to choose if their home care services should be carried out by the municipality or by an external provider.
A well-functioning competition between the external and municipal providers requires clearly outlined tasks and similar remuneration. Municipalities need to account for how resources are allocated amongst their own operations. The pilot study shows that it is not always clear how the resources are allocated.
Three municipalities have been investigated to see whether it is possible to compare how financial resources are allocated among the providers. The municipalities that participated in the study were Borås, Boden and Järfälla. Of the three municipalities, only Järfälla had clearly outlined the municipal tasks within the system of choice. In the other two municipalities, there is evidently room for improvement.
The study shows that the three municipalities account for the revenues and costs of their municipal operations within the system of choice to varying extent and in different ways.
“We believe that this is roughly the case around the country.“ ”The municipalities will gain in many ways by establishing a better understanding of the costs of their municipal operations.“ ”Lacking this, it will be difficult for the municipalities to impose competitively neutral levels of remuneration for municipal and external providers,” states Director General of the Swedish Competition Authority Dan Sjöblom.
“I recommend all municipalities with systems of choice to be open and clear in the financial accounting of their own operations within the systems of choice. All stakeholders will gain from this.”
In the report Konkurrens på likvärdiga villkor i kommunernas valfrihetssystem [Equal conditions for competition within the municipal systems of choice], the Swedish Competition Authority issues three recommendations to municipalities with systems of choice:
- Clarify the missions for the municipal provider and the external providers within the system of choice in order to allow comparison.
- Disclose the pricing, based on the municipality's own providers’ operational COSTs.
- Provide for open and clear financial reports for the municipal provider’s operations within the system of choice.
For further information, please contact:
Jimmy Dominius, Press Officer, tel +46(0)8 700 15 80, or
+46(0)76 542 15 80
Per Jonsson, Project Manager, tel. +46(0)8 700 16 76