sou · GOB383 · 2001-01-01 00:00:00 — Ending indexation has been the most important way of reducing pension expenditures. The basic pension was reduced by 2 percent in 1993 and further cut in 1996. Qualifying conditions for early-retire- ment pensions were tightened, while compensation rates were decreased. 6 The description below gives a mere glimpse of the reforms. For more detailed information see and Wennemo 1998 and 2000. Adaptation in social policy 57 As in , sickness benefits have been under heavy attack. Cover- age, compensation rates and length of recipiency have all been renego- tiated. In 1993 the compensation rate was lowered from 90 percent to 80 percent. In 1996 a further reduction took place, this time to 75 percent. In 1998 the compensation rate was restored to 80 percent. The Bildt government tried to implement a number of changes in unemployment benefits. A compulsory fund was introduced, while terms for requalifying for unemployment benefit were tightened. The Social-Democrats abolished these changes when they came into power. As in sickness benefits, compensation rates have been lowered, first from 90 percent to 80 percent and then to 75 percent. In 1998 an increase to 80 percent was implemented. Housing allowances were cut considerably. One aim was to target the housing allowance more towards families. Housing allowances (like child benefits) were raised to compensate for the changes resulting from the taxation reforms. Following these reforms expendi- ture increased rapidly and cuts were introduced in 1995 and 1996 to decrease the allowance levels. Balance sheet on adjustments in income transfers in and The rhetoric of economic necessity prevailed in both countries in the early 1990s and the severe economic problems can also be claimed to have promoted a sort of general crisis consciousness in both countries. It is also hard to accuse governments of blame avoidance (Pierson 1994) with regard to cutbacks; in both countries cutting of expenditure became close to a political virtue in the changed condi- tions, which may help explain why some of the cutbacks were relatively easy to implement. Even lacking a detailed comparison, it can certainly be said that severe cutbacks have been implemented in both countries. Still there are major differences, although unfortunately to weigh these in more detail we need to wait for more comparable evidence. At present no detailed comparison exists, and the views expressed so far are somewhat conflicting. For instance, (1993) argues that social policy in has been more subordinated to economic necessities than in other Nordic countries (Kosonen 1993: 50, 1998). The present account of budget consolidation suggests some crucial differences in adaptation strategy, especially regarding the intensity of total cutbacks and of targeting of the social policy sector, with implementing more austere measures. 58 Adaptation in social policy On the other hand, when (1995) compared the 1996 budgets for and , he concluded that the solutions were very similar. Both countries were cutting expenditure in earnest, but view was that measures in were more gradual and less dramatic. He concluded by saying that as a result of cuts the Finnish welfare state appears less damaged than the Swedish (1995: 411). judgement is affected by the year of comparison, however, as his task was only to compare budgets for a certain year. This report reveals that the cuts in appeared mainly during 1993 and 1994, while in was one of the most intense cutback years. Also, so far there have been any real improvements in the social security system in , whereas in the cuts came over a shorter period (1994–96) and were followed by some expansive reforms (e.g. to increase compensation rates) from 1998. On the basis of this report a preliminary conclusion could be that heavier reductions, earlier timing and extending on of cuts over a longer period characterise , while a later, shorter and – within that period – tougher adjustment strategy characterises . What could be the explanation for these differences in timing and severity of cutbacks? Kosonen (1996) argues that differed from other countries, especially in the way savings were planned. Instead of a committee or working group appointed by the government, the planning of savings was left in the hands of one person and the savings programme was prepared and implemented by civil servants. It could be that this political neutrality also contributed to the quick passage of savings legislation. The fact that the savings were proposed by a civil servant and carried out by civil servants at the may also be important from the perspective of blame avoidance. In this way no political party had to bear excessive political responsibil- ity; the savings plan could be accepted as neutral. This may also explain why the cuts introduced by the coalition govern- ment were retained by the Social Democrat -led government. In addition, the majority governments in probably had an easier task than the minority governments in in passing savings laws through Parliament. Adaptation in social policy 59 4.4Case 2: Adaptation in elderly care From a Nordic model perspective and have long stood out as exceptionally public states in international comparisons. This feature arises from their unique scope of publicly provided services rather than from an exceptional programme of cash benefits (see e.g. 1981; Castles 1998; et al. Services make up a significant part of the GDP, and of all social expenditure the share of social and health services in 1997 was 41 percent in and almost one third (31 percent) in (Nososco 1999). These figures testify that both countries have invested hugely in services. The character of services differs from elsewhere, too; in comparison, there is a greater variety of public services that cater for a broader spectrum of the population. Access to services has been based on citizenship, and lately on , rather than on merit or prepaid rights, and services are provided according to need. To satisfy all needs, it has been the aim for services to be of high quality, and run by professional staff. With these characteristics, service provision in the Nordic countries can be said to be founded on the principle of universalism. As publicly arranged social care services are a distinguishing feature of the Nordic model (e.g. Sipilä et al. 1997), elderly care and childcare services are examined here; they form the core of social care services, whether measured in expenditures or numbers of people served. Did the nineties mean changes in the way these services are resourced? Are the services as as before? First comes an overview of developments in both countries regarding expenditures and personnel numbers. Thereafter follows a look at changes in the cover- age of services. We start with elderly care services. There is no one correct picture of old age -related expenditure, as statistics are not formed on the basis of age, but rather on functions. Sometimes the responsibility for functions is renegotiated, as for example in , where old age services were shifted from the health to the social sector in 1992 (Ädelreform). This has had some repercussions on the way statistics are compiled. As a consequence, estimates on elderly care expenditure development during the 1990s differ depending on the source (Szebehely 2000). Statistics are also being revised following a shift to the Esspros system coordinated by . The Esspros system is now guiding EU countries to classify their social expenditures in a similar way, and 60 Adaptation in social policy the latest statistics both in and are compiled accord- ingly. For this reason Esspros statistics are chosen for comparison, although due to the on-going revision of older data, the figures presented for only start from 1993. A further crucial limitation on comparability is the practice in not to include the costs for long-term care of the elderly in health centre bed-wards in elderly care expenditure, which leads to a picture of unrealistically low expenditure on elderly care in Finland.7 Nevertheless, in Esspros statistics an attempt is made to classify expenditure items according to various social risks, old age being one of them. The classifications should also be consistent over time. As Esspros statistics on old-age related expenditure include income transfers and services, they provide a way to compare the division of costs and their development over time, even if some doubts are reserved about the possibilities of comparing levels between countries. In all countries expenditure related to old age forms the biggest spending category. However, there are major differences in the way this expenditure is divided between pensions and other income transfers and services. According to Esspros statistics, expenditure in related to old age accounted for about 9 percent of GDP in 19978 (about 55.4 billion in 1998), and 30 percent of all social expenditure. In the weight is clearly on the cash benefit side: pensions and other transfers absorb 89 percent of the expenditure, while social care services account for 11 percent. In expendi- ture related to old age accounted for close to 13 percent of GDP in 1997 (222,), and 36 percent of all social expenditure. Of all old-age related expenditure the share of services is 22 percent. (STM 1998:15, 1999.) The differences between the countries in overall expenditure levels are substantial, and the same discrepancy emerges in Nososco statistics (1998:123) covering expen- diture of services to elderly and disabled people; the spending figure for is 10 billion and for . Even taking account of exchange rate differences and population size we have a great disparity in spending levels. Explanations have been sought from among user fees, wage levels and staff ratios, since the discrepancy cannot be explained solely by a different practice of 7Care in health care centre bedwards is comparable to care in nursing homes in . As in the Swedish Esspros statistics costs for nursing homes are included, Esspros statistics show a major difference in expenditure levels, which is not warranted by reality. 8Again it should be remembered costs for long term care services are not included in this category, which affects the balance and level. Adaptation in social policy 61 Finnish elderly care expenditures are simply markedly lower. On the other hand, a recent Swedish report describing service expenditures for the elderly (Ds 1999:61) gives more similar public net spending figures (purchasing power parity corrected) for services for the elderly in the two countries: per elderly per year in and in . work is clearly needed to explain the disparity in levels. Instead of delving deeper into the expenditure figures, the Esspros figures are here indexed in order to focus on trends (Figure 16). The figure shows no decreases in resources for , and for the trend since 1993 is a slowly increasing one.9 After 1993, the data suggest a more pronounced relative resource increase in . Development of expenditures on elderly care services in and –97, 1993=100 Source: Calculations based on STM 1998:15 and 1999 Esspros figures. Here it should be pointed out that due to the major difference in expen- diture levels, a trend comparison like this also becomes problematic. has a much lower starting level, both for institutional care and home help services, and increases in expenditures may just reflect this initial disparity. A country-by-country examination based on national statistics is therefore a more appropriate way to proceed. 9 For the bump in Esspros figures for 1995 may be explained by an equivalent bump in expenditures related to disability, more than by an actual decrease in spending that year. Yet the possibility of a real decline should not be ruled out as 1995 was the year of the most pronounced cutbacks in . 62 Adaptation in social policy national data for expenditures did not increase much during the economic crisis years. On the other hand, no decrease in expenditures occurred either. Since 1994, expenditures have again started to increase. According to national sources (STM 1998:15) expenditure for institutional care is more than double that for home help. Expenditure on institutional care has increased modestly over the period. Home help expenditures in turn were stable in 1990–94, followed by faster growth thereafter. For , a picture emerges of slowly increasing expenditures over the 1993–97 period. The difference from seems to be that in expenditure on home help has developed at a slower rate than expenditure on institutional care (1999.) As a great deal of the expenditure on elderly care services stems from personnel costs, it is appropriate to balance the picture of resource development with a figure describing the development in personnel between 1990 and 1998. As many needs of the elderly are answered by the health care sector, both health care and elderly care personnel are included. Since no comparable statistics on personnel exist, Figure 17 should be interpreted only as a rough estimate of trends concerning personnel development in and . The Swedish data are from data with no adjustments for full-year employees, while the Finnish data are register based. to discrep- ancies in sources, information on number of employees has been indexed. Adaptation in social policy 63 Personnel in the health care and elderly care sector in and –98, 1990=100 Sources: Stakes Statistics, Note: The number of employees for is the sum of workers in health care and elderly care services according to labour force surveys. The number for is calculated from social and health care personnel statistics so that the child care personnel number is subtracted from the sum of all social and health care workers. These give only rough estimates of the development for each country, not comparable ones. Figure 17 suggests personnel development has been more favourable in , which accords with the description of public employment development earlier. While the trend in has been very stable over the period, there has been a smoothly diminishing trend caused by reductions in personnel in between 1990 and 1997. The trend seems to reverse after 1997. specifically, for it is apparent that there have been some reductions in personnel in health care, although not very pronounced, whereas personnel numbers in the social care sector have on the whole increased a from 1990 to 1998, with some fluctua- tion in between. It is worth noting that at no point in time did social care personnel fall below the number in 1990. The number of person- nel in the health care sector in 1998 almost equals that in 1990 (111 700 in 1990, 111 100 in 1998), while the overall number in the social care sector (not taking into account child day-care personnel) increased from 41 000 in 1990 to 45 300 in 1998. While the situation has been stable in institutional care, there has been growth in the number of home help workers, as suggested by expenditure data. For , the figures for developments in expenditure and personnel thus provide a similar picture to the development in resources during the 1990s: until 1993–94 resources remained fairly , followed by a slow increase since then. 64 Adaptation in social policy Owing to different ways of classifying personnel and also to the substantial administrative changes, no similar information is readily available for . Yet it seems clear that the development in personnel has been different from . According to Szebehely (2000) the number of persons employed in the health care sector and within elderly care and care for the handicapped decreased by 94 000 people between 1990 and 1998. Most of this reduction occurred in the health sector. For the expenditure rise after 1993 is not reflected in increases in personnel, at least until 1998. Summing up resource development the main message is that the economic downswing did not result in a similar downturn in the resources for elderly care in , while it was more straightfor- wardly associated with expenditure and personnel reductions in Sweden.10 Perhaps surprisingly, the index-based examination of resource development adopted here shows a more favourable overall development in than in , which is interesting given the different economic background and this account of the differing way the cutbacks were implemented. Certainly, in the search for explana- tions the different starting levels should be kept in mind. Yet, even for the overall surprisingly positive picture of resource development hides some less positive developments. It should be remembered that although no jobs were lost during this period practically no new recruiting happened, either, and workers have become older and the client group has continuously expanded. Produc- tivity has increased, but so also has the amount of work done. Part-time and temporary work have become more common, there have been organisational changes, and for some groups of workers work tasks have undergone rapid changes. As a consequence, there are research findings of increasing psychological stress and fatigue among social care and health care personnel (Elovainio and 1997).11 Similar findings come from Swedish sources (SOU 2000:3). It is also important to realise that in both countries the reductions in state subsidies were compensated by an increase in other revenue sources, and without that the picture portrayed above would look much more gloomy. During the 1990s the tax revenues of the municipalities indeed were important to compensate for the subsidy losses, although the tax roof imposed on Swedish municipalities at the beginning of the 10 Although Esspros expenditure data is not available for prior to 1993, national expenditure data for confirm reductions between 1990 and 1993 (see SOU 2000:3, figure 2.2:1). 11 Quality of services (not considered in this section) could have been affected, too. Adaptation in social policy 65 1990s should be kept in mind as a possible explanation for the resource cutbacks there. Also, there have been savings in other than personnel expenditures, especially in health care. From a clients perspective one of the most important changes over the decade was in user fees; a growing share of the costs was shifted to service users. In , for instance, according to Lehto (1997) municipality revenues from user fees grew between 1993 and 1995 by 23 percent in home help services and by 7 percent in institutional care. From a Finnish service users perspective the shift from institutional towards non-institutional care has also meant an increase in user fees, as these are more prevalent in non-institutional services (for instance, service housing is usually more expensive for the client than being in an old-age home). In user fees do not depend on the type of institution. Of course, there is local variation in both countries regarding user fees. Moving from resources to outputs provides a further view of the development. Elderly care can be examined from various , yet one of the most common ways is to make a distinction between institu- tional care and home-based or residential care. Old-age and nursing homes are traditional forms of institutional care, service housing being developed as a service form that offers more home-like housing with easily accessible care when in need. Home help has been the most common form of residential care. Again there are difficulties in obtaining comparable data on the development; even national time-series are not 100 percent trustworthy due to the changes that have taken place. To solve these problems we here present a figure that groups together different forms of institu- tional elderly care, i.e. for , places in nursing homes, old-age homes and service housing, and for , places in old-age homes and long-term bed-wards for the elderly at health care centres, and service housing. In order to achieve some comparability the sum of institutional care places available has been divided by the number of people 80 years of age and over. To distinguish trends between traditional institutional care and service housing, total figures have been decomposed. The ratios obtained make it easy to compare the developments in traditional institutional care and service housing. The results of this exercise are displayed in Figure 18. 66 Adaptation in social policy Institutional care in and –98, number of places per elderly over 80 years of age Sources: Stakes statistics for , Affairs 1999 for , Szebehely 2000 for the elderly population, own calculations. Note: For , traditional institutional care includes places in nursing homes and old-age homes, for , places in old-age homes and long-term bed-wards for the elderly at health care centres. It is evident that the countries have developed quite similarly when we take the totality of institutional care, i.e. both traditional institutional care and service housing, into account. The absolute numbers of places have slowly increased, although the overall pattern revealed by the figure is a slightly diminished supply of services when we take the growing elderly population into account. Yet the way this overall development has taken place differs somewhat. In deinstitutionalisation has occurred quickly. Places per number of elderly in service housing have increased rapidly, while the number of places in traditional institutional care has decreased over time. National statistics furthermore reveal that this decrease has mainly focused on places in old-age homes, as the numbers of elderly in long-term care in health care centre bed-wards looks stable. In addition to the information given in the figure, has experienced a significant fall in the number of elderly in psychiatric hospitals (from 1700 in 1990 to 200 in 1998 according to Stakes statistics) and there has been a move to abolish care functions from hospitals. For a relatively similar broad development pattern of institutional care can be detected. Along with the goals of de-institutionalisation there has been a move towards more service housing, especially since 1994. Finally, it is Adaptation in social policy 67 worth noting how, after differing trends, the two countries seem to be more alike in their pattern of institutional care in 1998. In most countries there has been a deliberate move from institutional care towards more residence-based care, and this has also been the case in and , although not accompanied by such an efficient build-up of support services. In fact, the coverage of home help services seems to have decreased sharply. According to Nososco statistics, home help services are on an equal level in and , and for the more elderly population perhaps even slightly to the advantage of (Table 6). Home help for the elderly in and , percentage of the age group Source: Nososco 1999: 109. However, this table may be misleading. In the search for trends it proved to be difficult to present comparable figures on the development of home help due to large differences in statistical reporting and changes in reporting practice. classifies services for elderly households, for elderly persons. Categories for age groups also differ. In addition, there is no comparable information on how often home help service is given, nor on the length of visits. Moreover, for the practice of having auxiliary services (support services such as cleaning, bathing and meal services are not included in the figures for home help) as an additional category blurs the picture, as recipients of auxiliary services may or may not simultaneously receive home help services. And in there is some confusion concerning the extent of home help given to elderly in service housing. Since 1995 home help to elderly living in service housing is not reported if there are personnel on site, so longitudinal data for the nineties are not comparable in this respect.