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Top Social Democrat slams centre-right's "unrealistic" welfare remedies

Published tisdag 9 maj kl 11.50
Ilmar Reepalu arrives at the Swedish government's  Rosenbad building to deliver his final conclusions on Tuesday.
Ilmar Reepalu arrives at the Swedish government's Rosenbad building to deliver his final conclusions on Tuesday. Credit: Jonas Ekströmer/TT

Tighter regulation and improved monitoring will fail to prevent companies skimming off excess profits from running schools, health, and elderly care in Sweden, the author of last year's government enquiry has said.

Ilmar Reepalu, who was tasked in 2015 with proposing reforms to the privatised welfare sector, on Tuesday hit back at proposals from the opposition centre-right Alliance group of parties to use higher quality requirements to stop companies exploiting the system. 

"To use quality requirements to reduce welfare companies' high profits is... not realistic," Reepalu wrote in an article for the Dagens Nyheter newspaper.

Reepalu led the 20-month investigation into welfare which last year called for the profits of private companies providing services to be capped at seven per cent of their investments.

The proposal has generated sharp criticism from companies that stand to be affected, and from Sweden's centre-right opposition.

On Tuesday at 12:00 PM Reepalu responded to announced the final conclusions of the study, responded to these criticisms, as he published the final conclusions of his study.  

The issue of companies profitting from welfare, or Vinster i Välfärden, is a key dividing issue in Swedish politics.

Whether Sweden's Social Democrats decide to back or water down Reepalu's proposals is an important strategic question in the run up to next year's election.

Following Reepalu's suggestions would help secure the backing of the Left Party, but would make it more difficult for prime minsiter Stefan Löfven to achieve his long-stated goal of breaking the centre-right Alliance, and doing deals with the Centre and Liberal parties.

In his DN article, Reepalu argued that welfare was different from other areas where local and national government used private companies to provide services, such as building or waste collection.

"In more technical industries... The most important thing is what gets done, in healthcare, schools and elderly care what matters is how it is done," he said.

"Reliable quality measurements in these sectors are therefore more difficult to implement."

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