More than one hundred Finnish municipalities have been taking back some of their outsourced services, according to the Trade Union for the Public and Welfare Sectors JHL. Finland has 313 municipalities.
The main reasons for cancelling contracts have been due to problems with quality and price.
This information is based on a survey done by the public pension institution Keva and can be found in a letter JHL sent in October to some 7,500 members and deputy members of municipal councils. The letter is sent four times a year.
The municipal council is the highest decision making body of local governments and is elected by secret ballot for a four year term. The number of councillors vary from 17 to 85 depending on the number of inhabitants in each municipality.
And even though many municipalities have had a change of heart and recalled some of their outsourcing the total value of outsourced services is growing, especially in health and social care services. The total value of outsourced services in these sectors is already five billion euro.
Outsourced health and social care services are mainly bought from the major providers in the market. The five biggest providers of private health services together account for 72 per cent of the market. Smaller providers do not have the resources to accommodate this kind of major outsourcing.
This leads to a paradox: when it concerns the largest part of their services municipalities have undertaken to outsource, the less competition there is.
JHL strongly advises local government decision makers to think carefully before going down the path to major outsourcing of health and social services. These services can also still be produced by the public sector.
Finland has two national languages, Finnish and Swedish. The letter is also available in Swedish .