The Government published draft bills on health, social services and regional government reform

On 29 June the Government published draft bills on reforming health and social services and on establishing counties. The main legislative acts governing the reforms are the Counties Act, the Act on Organising Health and Social Services, the Implementation Act and the Act on the Financing of the Counties.

The health, social services and regional government reform serves to modernise services and to improve the sustainability of general government finances. The reform creates the conditions for a future model for health and social services in Finland. The new counties will adopt the most efficient and effective practices, so that services can be produced efficiently and cost-effectively. The aim is to narrow down the differences in people's wellbeing and to curb growing costs. The services will be integrated in a customer-centred way based on people’s needs. The scope of integration of services in the reform is very ambitious by international standards.

The draft bills are not yet complete. The draft Government proposal will be finalized during the summer. Because the matter is of major significance to  society and of interest to the general public, it was decided that they would be brought into public debate already at this stage. They will be compiled into a Government proposal and circulated for consultation in August.

The Acts will pave the way for a reform where 18 autonomous counties will be established in Finland. As of 1 January 2019, the counties will be responsible for all public health and social services, rescue services, environmental healthcare, the duties of the regional councils and selected other municipal and regional state administrative duties. In May, the Ministry of Finance started preparing county duties other than health and social services under the heading of the regional government reform. The draft bills related to this reform are not included in the material being published now.

All public health and social services will be brought under a single umbrella management, i.e. into the counties. The counties are in charge of integrating the services so that they form customer-friendly and well-functioning service and care chains. This applies to public health and social services both at the basic and specialised level. All financing will also be channelled via the counties to the service providers. The counties are responsible for making sure that public, private and third sector services within the scope of the customer’s freedom of choice work seamlessly together, that information flows smoothly and that the services meet quality criteria.

Counties Act to enable county autonomy

The Counties Act enables counties to be autonomous and allows county residents and service users to participate and exert influence. The Counties Act consists of provisions on the administration and financial arrangements of the counties and on the management of operations.

The Act on Organising Health and Social Services comprises provisions on how the counties should organise their health and social services for their residents. The Implementation Act comprises provisions on staff and asset transfers to the counties, for instance, and on transitional government, responsible for preparations for the commencement of operation at the start of 2019. 

The legislative package also includes legislative proposals on financing, taxation, central government transfers to local government for basic public services, the status and collective agreements of public servants, elections and the provision of health and social services. In the same context, the Ministry of the Interior will publish a draft bill for organising rescue services. Legislative proposals governing the freedom of choice of customers and the simplification of the multisource financing system will be completed as planned at the end of the year. These will be go on a consultation round at the same time as the Government proposal for reforming health and social services is submitted to Parliament.

Transferring public health and social services and their financial resources to counties at the beginning of 2019 will have a major impact on local government finances. Computation principles and preliminary calculations broken down into individual municipalities by the Ministry of Finance are being published along with the draft bill. Financial resources for the counties will be collected from citizens in connection with central government income taxation. To avoid higher taxation, local government tax rates and central government transfers will correspondingly be lowered. The parameters of taxation in the final preparations will be drawn up in such a way that taxation will not increase at all.

There are large differences in health and social services expenses between municipalities. The transfer of financial resources to central government will result in major changes in different municipalities, and they will be equalised by revamping the system of central government transfers to local government for basic public services. The impact on municipalities of the entry into effect of the reform will be mitigated by equalising the changes in central government transfers. This will ensure that imputed financial resources in the municipalities are equivalent to the level prior to the reform.

The transfer of expenses and revenue under the new financial model and the related equalisation elements will be determined definitively from 2020 onwards. The computations will be made at the level of 2018 on the basis of average expense outcome data for 2017 and 2018. The calculations in the draft Government bills are based on estimates for 2016. To ensure fair treatment of municipalities, they will be adjusted retrospectively based on the actual outcomes.

An assessment on the social impact and other effects of the legislation has also been completed. An assessment from the constitutional point of view will also be completed in the course of the summer. The assessments will be incorporated in the Government proposal that will be circulated for consultation in the autumn.

A formal consultation round will be organised in August

The drafting of the draft bills will continue over the summer. The draft Government proposal will be completed and circulated for consultation in August. The duration of the consultation period is ten weeks. After that the Government will make a final decision for a proposal and will submit it to Parliament.

The draft bills have been published on the alueuudistus.fi webpages. Should the webpages work slowly as a result of a peak in the number of users, the material is also available at julkaisut.valtioneuvosto.fi.

Inquiries:

Project Manager Tuomas Pöysti, Permanent State Under-Secretary, Ministry of Social Affairs and Health and Ministry of Finance, tel. +358 2951 63012

Päivi Laajala, Director General, Ministry of Finance, tel. +358 2955 30026

Hanna-Maija Kause, Special Adviser to Minister Rehula, Minister of Family Affairs and Social Services, tel. +358 2951 63109

Sami Miettinen, Special Adviser to Minister Vehviläinen, Minister of Local Government and Public Reforms, tel. +358 2955 30057

Draft bills and calculations broken down by municipalities in Finnish