Employment, Social Affairs & Inclusion

News 16/12/2016

Limiting profits in the welfare sector in Sweden?

A new Flash Report prepared by the European Social Policy Network provides information on the policy debate on limiting profits in the welfare sector in Sweden.

Wooden table with a white paper on, with the words 'Social Policy' written on it

© Shutterstock.com - lawryk2015

Sweden has a tradition of universal, tax-financed and publicly provided welfare services, but since the 1990s its welfare services have been increasingly carried out by private service providers.

In addition, the Swedish welfare sector differs from other countries because of its far-reaching deregulation and private for-profit sector involvement in basic education, healthcare and social services.

Whether private for-profit providers should be permitted to operate in education and welfare provision has recently become a controversial issue in Sweden. The debate has been fuelled by several highly publicised scandals in the welfare sector, for example

  • schools filing for bankruptcy,
  • grade inflation
  • drastically falling results according to PISA (Programme for International Student Assessment).

Especially under fire are large private corporations owned by venture capitalists that generate high profit margins while avoiding taxes through elaborate, but legal tax planning.

In 2015, the new social democrat-led coalition government commissioned an inquiry to investigate how publicly funded and privately run welfare services could be designed to ensure equity, quality, economic efficiency and transparency. This has resulted in several key proposals recommending increased regulation and limiting profits in the tax-funded welfare sector. The proposals intensified the debate on profits in the welfare sector and the issue is likely to remain contentious until the 2018 general election.

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