How aiming for the ideal threatens future welfare provision

The report recently presented by the Avkommersialiseringsutvalget could lead to at least three serious problems that threaten to undermine welfare provision in our country.

Reduced diversity and innovation

In 2016, a bar was opened at Paulus nursing home in Oslo. The nursing home was run by Norlandia, and a simple life enhancing initiative such as a bar was met with great enthusiasm among the residents.

Private actors have, among other things, contributed family home models and technology and digitisation in child welfare services, innovative behavioural therapy and evidence-based models that help children process trauma. The list of vital innovations is long. They have contributed to raising standards in welfare services in Norway. This shows how private providers can play an important role in the development of the sector.

Non-profit organisations do not have sufficient capacity and resources

The results of the so-called “mutual” reform in Great Britain, where non-profit organisations and social enterprises were given advantages in public procurement, have been mixed. But the reform has increased the number of public services provided by non-profit players, and these providers have contributed increased social value and customised services for users. However, challenges such as lack of consistency in implementation, weak measurement of results and lack of long-term funding have limited the reform's overall effect.

Many organisations have struggled to scale up and maintain financial sustainability. Non-profit organisations within the welfare sector are generally both more numerous, larger and stronger in Great Britain than in Norway. The UK has a long tradition of voluntary organisations and social enterprises playing a central role in delivering welfare services, and wider experience of delivering services on a large scale. Nevertheless, the reform has not gone well. A look at the figures for well-known Norwegian non-profit organisations in welfare shows that several of them are struggling with staffing, quality and finances. It is unclear whether Norwegian non-profit organisations have the capacity and resources to meet the significant need that commercial players currently meet.

A health system without flexibility

Norway currently provides world-class health and welfare services, but we face major challenges in the future. The Health Personnel Commission pointed out last year that the way we organise, deliver and finance health services will not function adequately in the future. This is because we will have a shortage of health personnel, and more elderly people and people with chronic diseases will need more help. In such a future, it is absolutely essential that the healthcare system is as flexible as possible. We have to adapt and use the opportunity in the right way. To put it more directly: in the future of Health Norway, we will need all hands to the pump. That means organisational limitations must not put obstacles in the way.

In an attempt to “save” welfare from profit, we may end up with a system that lacks the flexibility necessary to adapt to the challenges of the future. These are not just unfortunate side effects, they are structural weaknesses that can have serious consequences for the entire Norwegian welfare system.

Read the article in Norwegian here.