• Sweden edition
 

Social Democrats: no ban on welfare sector profits

Published: 26 Oct 2012 17:02 GMT+02:00
Updated: 26 Oct 2012 17:02 GMT+02:00

The Social Democrats said on Friday they would not advocate for an outright ban on profits by companies working in the welfare sector, arguing instead for stronger regulations, increased transparency, and tougher demands on quality.

“We have found a good, effective solution,” party leader Stefan Löfven said at a press conference on Friday, the TT news agency reported.

The issue of curbing profits earned by companies that operate schools and hospitals has been the subject of heated debate with the Social Democratic party in recent months, with some factions arguing for an outright ban, while others countered that doing so was impractical and counterproductive.

But on Friday, Löfven announced that the party's governing board had come together around a compromise solution that would help ensure companies operating in the public sector were more accountable and used taxpayer money more effectively.

“The goal with this is to maintain freedom of choice and develop private providers of public services,” he said.

"It would have been oversimplifying things to propose a ban on profits."

Instead, the party wants to place indirect limits on profits though increased transparency, tougher regulations, and more stringent quality requirements.

The Social Democrats also wants companies to refrain from trying to avoid paying tax in Sweden through the use of complicated intra-firm lending and other tax planning schemes.

Higher demands would also be placed on exactly who can run a company in the welfare sector, another part of what Löfven referred to as “a very balanced proposal.”

In addition, the party wants to scrap current rules which allow companies to start up freely, and instead give final say on establishment of new welfare sector firms to the municipalities themselves.

For example, for a publicly-funded, privately-managed free school to open, it would need to go through a compulsory consultation with the municipality to look more closely at the number of students as well as situation in the municipality as a whole.

Löfven also called for a more effective, needs-based distribution of taxpayer funds to companies operating in the welfare sector.

“Today’s compensation system is ineffective,” Löfven said, emphasizing that schools that need extra resources because they have students in need of extra support would receive additional funds.

The Social Democrat head also explained that a transparency requirements would apply equally to all firms operating in the welfare sector and that private firms wouldn't simply be able to provide a statement of accounts at the corporate level.

“Trust me, I know how money gets moved around in corporations,” he added, stressing that it would not be possible to get funds for ten teachers but then only hire seven.

While the Commercial Employees' Union (Handelsanställdas förbund - Handels) welcomed the proposal, the union argued that more could have been done.

“We have nothing against the proposal, but we don’t think it’s enough. We want to have a profit limit,” said spokeswoman Kristina Jogestrand to TT.

Meanwhile, Göran Hägglund, head of the Christian Democrats, accused Löfven of bowing to pressure from left-wing factions within his party, pointing out that, according to the Social Democrats' proposal, municipalities would have too much say in whether new firms could start up.

"It means that power is shifted away from citizens, patients, and students to political bodies. And that surprises me considering signals sent out by Löfven earlier in the week," Hägglund told TT.

TT/The Local/og

Follow The Local on Twitter

The Local (news@thelocal.se)

Don't miss...X
Left Right

Your comments about this article

19:06 October 26, 2012 by intrepidfox
Pathetic. If a private company is going to invest and run schools or care institutes they want to see a profit otherwise why bother. Personally i believe that the local authorities should run these institutions to save money and have a far better control over the situation.
03:28 October 27, 2012 by Eric1
Limiting a private company's profits? This is immoral. How about limiting government taxation! Now that's where the real greed is.
15:11 October 27, 2012 by Skåne-American
@Eric1

If a company's entire business model relies on payments from the government, then yeah, maybe there should be a limit.

Corporate welfare: it's not just for Americans anymore.
23:31 October 27, 2012 by entry
@15:11 October 27, 2012 by Skåne-American

"Corporate welfare: it's not just for Americans anymore."

Now isn't that the pot calling the kettle black!

Take a look at EU industry(manufacturing, agriculture, energy, etc) and then have the nerve to point a finger anywhere else in the world with regards to corporate welfare.
Today's headlines
Florida 'mystery knight' dies in Sweden
Michael Boatwright (R) and Medieval knight re-enactors.

Florida 'mystery knight' dies in Sweden

The "motel mystery" American who baffled US authorities by only speaking Swedish when he woke up from a coma last year has passed away, Swedish media reported on Wednesday. READ () »

Swedes open coffin of 850-year-old king
Photo: Bertil Ericson/TT

Swedes open coffin of 850-year-old king

UPDATED: Scientists pried open the 850-year-old casket of King Erik the Holy on Wednesday, hoping to find out more about the king, his crown, and his eating habits. READ () »

TeliaSonera announces first-quarter profit drop
TeliaSonera CEO Johan Dennelind. File photo: TT

TeliaSonera announces first-quarter profit drop

Stockholm-listed telecom operator TeliaSonera on Wednesday said profits had fallen in the first quarter, but hoped offering customers more data solutions in the future would turn things around. READ () »

'Imperfect EU better than revolting nationalism'
Fredrik Reinfeldt. File photo: TT

'Imperfect EU better than revolting nationalism'

Swedish Prime Minister Fredrik Reinfeldt on Wednesday urged young voters to head to the European parliamentary polls on May 25th "to cure the European disease of nationalism". READ () »

Ericsson quarterly profit defies sluggish sales
Ericsson CEO Hans Vestberg at the first quarter press conference. Photo: TT

Ericsson quarterly profit defies sluggish sales

Swedish telecom giant Ericsson on Wednesday announced a drop in sales but posted a sharp rise in first-quarter profit, which nonetheless fell shy of analyst predictions. READ () »

Fatal Norrköping brawl
Four brothers held as cops fear brawl reprisals
Photo: Johan Nilsson/TT

Four brothers held as cops fear brawl reprisals

Swedish police fear that several people involved in a brawl in eastern Sweden on Monday night may be seeking revenge after two brothers were shot dead. READ () »

Sponsored Article
Beautiful pearls of southeast Sweden
The town of Västervik.

Beautiful pearls of southeast Sweden

Ask a Swede, and they are likely to say that their favourite holiday spot is in the southeast of Sweden. Eastern Småland and Öland offer a smörgåsbord of all the things dearest to the Swedes - from the beloved children's book author Astrid Lindgren to deep forests, long sandy beaches, perfect spots for that all-important 'fika', and a surprising amount of space, peace and quiet. READ () »

Weekend weather to bring summer warmth
Swedes enjoy hot dogs and cherry blossoms in Stockholm's Kungsträdgården. Photo: Jessica Gow/TT

Weekend weather to bring summer warmth

The sun is set to stick around and temperatures could climb into the twenties over the weekend, Swedish meteorologists said on Wednesday READ () »

'Day-care rapist' admits molesting eight kids

'Day-care rapist' admits molesting eight kids

A 21-year-old man confessed on Wednesday to sex crimes against eight children at a day care where he was working as an intern. READ () »

Swedish cops nab man for having big muscles
An unrelated bodybuilder. File photo: Ann Törnkvist

Swedish cops nab man for having big muscles

Police in Sweden's south who hauled a muscular man in for steroid testing have had their knuckles rapped, after it was ruled that big biceps cannot be grounds for narcotics suspicions. READ () »

RECEIVE OUR NEWSLETTER AND ALERTS
TT
Gallery
Inside the 850-year-old king's coffin
Features
Sponsored: South-eastern Sweden offers Öland beaches and more
Gallery
Swedish underwear shop puts staff in front of the camera
Gallery
IN PICTURES: The Local's Property of the Week - Täby
Sponsored: India+Sweden Week - India Unlimited
Features
Sponsored: India+Sweden Week - A film, food, and finance feast
National
University applications rocket to record high
finest.se
Gallery
People-watching April 18-20
TT
Society
Kids in Victorian garb mark Swedish Easter
Shutterstock
National
Swedish MP ordered chemtrail probe
Society
Swedish supermarket Ica pulls contested Easter commercial off air
Kungahuset
Society
Swedish royals set baptism date for princess
finest.se
Gallery
People-watching April 16
Advertisement:
Politics
Who's the prime minister's heir?
Alfie Atkins
Society
Are children's books the key to families integrating in Sweden?
National
'Sweden Dem protests cater to party's martyr image'
National
'Swedish research grants were fantastic, but now it's like Australia'
Society
Only in Sweden: The ten problems you'd never encounter elsewhere
National
Swedes stopped to take my picture, but didn't look me in the eyes
Business & Money
A swipe of the hand replaced cash and cards in Lund
YouTube
Features
Video: Oliver Gee finds out how to embrace The Swedish Hug
TT
National
Abba duo hints at reunion
Private
National
Flash mobs hug it out across Sweden
Finest.se
Gallery
People-watching April 11-13
Stockholm School of Economics
Sponsored Article
Why a bachelor's degree is no longer enough
Latest news from The Local in Switzerland

More news from Switzerland at thelocal.ch

Latest news from The Local in Germany

More news from Germany at thelocal.de

Latest news from The Local in Spain

More news from Spain at thelocal.es

Latest news from The Local in France

More news from France at thelocal.fr

Latest news from The Local in Italy

More news from Italy at thelocal.it

Latest news from The Local in Norway

More news from Norway at thelocal.no

Blog Update: The Diplomatic Dispatch

28 October 15:16

The Green Growth Group Summit »

"Today on the 28 October in Brussels, a large group of key EU Ministers and business people, including UK Secretary of State for Energy and Climate Change Edward Davey, and Swedish Environment Minister Lena Ek, will meet to discuss green growth. They all have a stake in resolving a challenge which, although it is crucial..." READ »

718
jobs available
Swedish Down Town Consulting & Productions
Swedish Down Town Consulting & Productions is an innovative business company which provides valuable assistance with the Swedish Authorities, Swedish language practice and general communications. Call 073-100 47 81 or visit:
www.swedishdowntown.com