LO strategy for restriction of profits in the welfare system

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In mid-January, the LO Executive Council submitted its action plan for restrictions of profits in the welfare system. The model is based on a row of measures which jointly aim at securing our welfare financed by taxpayers’ money to be of high and even quality and based on the principle of non-profit.
The proposal is supported by a unanimous LO Executive Council and all the 14 LO national unions. Together we represent one and a half million members, Tobias Baudin, LO 1st Vice-President, who has chaired the work on the LO welfare study, says.

LO suggests, among other things, a new type of companies: public corporations. These corporations are to be, together with other non-profit operations, the basic principle for private actors within the welfare sector financed by taxpayers’ money.

Within the public corporations, the public interest is to be accentuated and the withdrawals of profits restricted to value transfers corresponding to the interest rate of Government loans in addition to one percent of the total capital. Exceptions to this main principle may only be made in case of special operating agreements which are signed by the municipality and the county council.

Eight out of ten Swedes want tax money, which is intended for welfare, to be spent on welfare, and that any possible excess profits are to be reinvested in the operation. Our proposal is to guarantee that private actors do no make economic profits at the expense of the quality of people’s welfare, Tobias Baudin says.

Other measures required by LO concern staffing and the staff’s training, free insight into account books – which implies that every school, health care centre and elderly care facility are obliged to give an account of their economy – a certification that guarantees the performers’ competence, seriousness and long-term planning. The welfare system must also be granted more resources.

LO also suggest that the law on the system of freedom of choice is abolished, and that municipalities and county councils are granted the right to decide on the extent of independent actors’ establishment within nursing, schools and care.

This proposal clearly shows that the labour movement has a joint view on the problems and challenges within the welfare system. Our intention is to create rules and order within the welfare system in order to fulfill the objective, i.e. welfare of high quality to everybody, Tobias Baudin concludes.