Differences in Third Sector Welfare Models in Norway, UK and Germany

• In Event: Third Sector Organizations in Health and Social Care Services in Norway, UK and Germany

Abstract

The UK governments since the end of the seventies have sought to promote third sector organizations delivering publicly funded services, underpinned by shifting ideological motivations. This runs parallel with more market-based welfare policies, intended to expand the private sector delivery and to promote reformed and cost-effective services. In the last decade, government contracts have increasingly been distributed through a small number of large prime contractors who manage a supply chain of sub-contractors from both public, nonprofit and for-profit sector. The charities have somewhat reluctantly been pulled into these privatization and cost-cutting processes, because it puts pressure on their identity and independence.

In 2015, the conservative-liberal coalition government implemented a new EU-directive because it would make public procurement faster and less costly, while promoting economic growth in the private sector. The third sector also welcomed simplified procedures, smaller contracts more suitable for charities with limited access to external funding. A light touch regime for contracts below a threshold of €750,000 would give the contracting authorities more leeway. Overall, the push for marketization would continue as before, but the government’s tools for promoting the third sector would improve.

In Germany, the free welfare associations have since the nineties been exposed to increasing competition because the subsidiarity principle was moderated. However, a major part of the social and health services are defined outside of the public procurement regime. According to the social security statute books there is a “welfare triangle" consisting of 1) autonomous users vested with social rights choosing among 2) autonomous service providers, that apply for funding from 3) public agencies with an obligation to finance a social infrastructure. This procedure does not imply awarding public contracts after competitive tendering.

In Norway, the national laws of public procurement are in many ways stricter than the EU-directives. However, it was possible to have closed tenders for nonprofits only. This could not continue under the new EU-directive. In addition, the conservative coalition-government proposed not to implement higher threshold values in health and social services and other parts of the EU-directive that sheltered the nonprofits. Since tender calls are extensively used, this would imply a more burdensome process and tougher competition for the nonprofits. The parliament rejected this and passed a law using the full potential within EU-directive for promoting nonprofit providers.

As a result of differences in the welfare models and political goals, the third sector providers of health and social services were affected very differently by the implementation of the EU-directive in national laws.

Authors

• Karl Henrik Sivesind, Institute for Social Research

• Annette Zimmer, Münster University

• Jeremy Kendall, University of Kent