Innovation in Social Services

The Public-Private Mix in Service Provision, Fiscal Policy and Employment

Tomáš Sirovátka, Bent Greve

• Publisher: Routledge
• Year: 2016
• eBook ISBN: 9781317116400
• Edition: 1
• Topic: Politics & International Relations
• Subtopic: Social Policy
• Index: Politics & International Relations

EU member states have seen high levels of unemployment in recent years especially amongst young people. At the same time the fiscal crisis of welfare states has made it difficult for them to invest in new jobs and new economic growth. The EU, at least since the enactment of the Amsterdam treaty, has had a focus on how to support member states' development of an employment policy which aims for higher levels of participation, lower levels of unemployment and more gender equal approaches. Through exploring patterns in the recent development of financing and governance of social services and developments of social services and employment in the Czech Republic, Denmark, Germany and the UK, this volume provides readers with new knowledge and evidence of the options regarding social innovation in social services. Furthermore, it provides a comparative European perspective on how the interplay between a public and private mix of social service on the one hand might help in creating jobs, and, on the other, be a way of coping with the needs and expectations of higher level of services in the core areas of the welfare state.

Chapter 1
Introduction

Tomáš Sirovátka and Bent Greve

The Aim of the Book

Modern welfare states lack jobs and the ability to sustainably finance the welfare state and fulfil the expectations of their citizens. This combination raises new issues and new problems for welfare states in their ability to supply the expected welfare services, find the qualified persons to do the jobs in times of changing labour force supply and fiscal constraints. This book fills a gap by combining a clear-cut presentation of existing problems with ways to sustainably cope with them. As a consequence of the pressure on financing the welfare state and the ambition of ensuring high quality services and employment, the central issues point to how the welfare state can continue to be a social investment welfare state.

In the wake of the financial crisis and due to expected change in demography, there are also on-going debates about how to innovate and develop welfare states in a sustainable way and how to solve the present and expected financial pressure on the welfare states in the near future. This book tries to answer how governance, financing, social innovation and sustainability are interlinked issues in modern societies. This chapter will provide an outline of the book as well as some methodological choices, including a selection of countries serving as specific cases, allowing a comparative analysis presenting knowledge that can be interpreted in a broader European welfare state debate. The focus is on problems associated with social services in contemporary welfare states.

How fiscal constraints create pressure on the welfare states will be shown, including the continuing restructuring of welfare states in light of the financial crisis. We will discuss how these ongoing changes look, including changes in our perception and understanding of the public sector’s role in welfare states. These changes will have an impact on the public/private mix in service provision in core welfare state areas such as health, education and welfare service.

An overview of recent changes will be presented as well as the difficulties in measuring these changes, especially their effect on employment due to the direct/indirect impact on employment and the statistical difficulties in the division of responsibilities and activities between the public and private sectors. This also implies the need for a discussion of qualitative changes in policies concerning who is delivering the goods and services – especially any changes towards a higher degree of market delivery. This relates to the ongoing discussion on the healthcare and social service sector and the question of when a welfare good is open for competition in the private sector. Furthermore, there are discussions about how to ensure that the public sector innovates so as to deliver goods and services in the most effective way as well as how the governance ensures that evidence is included in the decision-making.

Central Issues

The intention, from a theoretical and comparative case-based approach, is to explore patterns of employment in social services and the public sector in different EU member states in the broader context of labour market and welfare state development. The analysis will explore how EU countries pursue their fiscal policies in social services, how they develop modes of governance and the change in the public/private mix in social services, and what the new patterns of employment in social services are, in light of the main challenges facing welfare states: the recent fiscal pressures and the expected demographic changes. This double challenge has repercussions on the way welfare states are governed and thus on how to ensure the sustainable development of the welfare state.

There are several reasons for investigating these issues. Comparative analysis of the welfare state has only recently concentrated more explicitly on social services (for example Seeleib-Kaiser 2008, Wollmann and Marcou 2010). Part of the reason for this is that the welfare state was historically developed with the intention of covering specific risks, thus ensuring economic security in the case of certain contingencies that would occur (unemployment, sickness, work-accident, retirement). For this reason, most investigations, including comparative analyses, have traditionally focused mainly on contributory and non-contributory benefit schemes. Similarly, patterns of employment and their changes in social services in different welfare states have not been intensively studied. This is so despite the fact that the development of several types of social services represents a key issue with respect to job creation in many welfare states, as well as to the expectations directed towards the welfare state effort and what citizens can expect to receive, including the reconciliation of work and family life (for example affordable and high quality day-care).

Social services are further expected to respond to the changing demography and new social risks. As such, they are becoming central pillars in the ‘welfare state architecture’. It seems that social services like health, elderly people’s services, child care, employment and life-long learning have become central to ensuring effective social protection, social justice/equity, social inclusion and cohesion. Thus finding ways to finance, steer and innovate these types of services in different kinds of welfare state is central.

At the same time, since social services are labour-intensive, they also meet the expectations of job creation, thereby potentially providing ways to cope with the lack of jobs and the high levels of unemployment in many countries. However, job creation is not only dependent on the overall effective labour demand, but also relies on how to ensure the sufficient sustainable financing of social services. Under the conditions of European and globalised economies, ageing societies and fiscal pressures on welfare states – all aggravated by the economic crisis, the sustainable financing of social services and their provision – have become more problematic and might thus work against the development of new social services unless new innovative solutions are examined.

One of the key perspectives is to analyse the inter-relationship between the two issues that are central to welfare state and labour market development: the financing and governance of social services, on the one hand, and employment in social services, on the other. This question has been investigated only marginally up until now. The approach in itself is thus innovative in the sense that it integrates two streams of literature. One of them deals with social services as such: their financing, governance and performance (accessibility, scope, quality and the effects/outputs/consequences for their beneficiaries). The other deals with employment in social services and labour market performance: job creation, scope and structure of employment in social services in the public sector, implications for unemployment, labour market mobility and so on.

Preliminarily, it can be assumed that the size and forms of financing social services and their governance can have strong implications for the scope and structure of employment in social services. At the same time, the existing patterns of employment in social services and the public sector may represent an important background for the development of their financing and governance. The complexity of the relationship between the financing and governance of social services, on the one hand, and employment patterns in social services, on the other, represents a challenge.

Furthermore, the complexity arising from the multiple roles/functions of social services in contemporary societies is having the effect that all the possible outcomes resulting from the input will be less clear. Therefore, another central issue also concerns whether the potential for job creation in social services is possible in light of the contemporary developments in financing and the organisation of service delivery, and the potential for sustainable employment and social innovation in social services. Sustainability in the financing of the welfare state is thus also central.

Summing up, the above ideas imply that the following key questions will be covered:

1. What are the ways and trends in financing the welfare state, especially under the fiscal pressures emerging from Europeanisation, globalisation and financial crises?

2. What are the trends in the governance of social services associated with change in the fiscal regime and with other policy changes?

3. What are the consequences of the changing fiscal regime and governance for employment in social services and job creation in social services – either public or private, and for the performance of contemporary labour markets?

4. What are the consequences for the ‘production’ of the services in terms of their scope, accessibility and in meeting social needs and expectations?

5. What is the impact of these changes of the welfare mix on the understanding of welfare states, including issues related to the convergence/divergence of welfare states in Europe?

Methodological Considerations

A combination of desk-top studies, quantitative data and case analyses is used to depict changes and developments regarding the five central questions presented above.

The approach thus combines several streams of literature in different fields: first, literature on the overall development of the welfare state and its regimes; second, literature on the economics of the welfare state and public finance; third, literature on the governance and recent shifts in governance in social services and innovations in their financing and delivery; and fourth, literature on the dynamics of employment and labour markets with explicit focus on social services. This broad approach is necessary in view of the research issues outlined.

In order to provide an in-depth analysis, there is a focus on the situations in four countries that represent examples of various welfare state regimes: the Czech Republic (post-communist/Central-East European), Denmark (Scandinavian), Germany (conservative) and the UK (liberal). The book thus also uses welfare regimes as a heuristic device to paint a broader picture of the developments in European welfare states (compare Greve 2013). To put the information into a wider framework, Chapters 2 to 7 include data for all EU-27 member states, whereas Chapters 8 to 11 focus on data for the four member states, comparing them with each other as well as with the EU-27. This methodological approach is preferred as it allows the use of both quantitative and qualitative data, ensuring an overview of the similarities and differences in the various types of welfare state.

The empirical data will be based upon the following:

1. Aggregate information on the development of employment in social services 2000–2010; the changes of employment structures in health and social services – divided by gender, age, education; and the structure of financing (expenditure in specific fields of social services).

2. Information on the level, structure and change in the financing of social services (expenditures and sources of financing including user fees) during 2000–2010.

Finally, governance structures and mechanisms will be examined in selected fields of social services (long-term care, child care and employment services) in four selected countries (Czech Republic, Denmark, Germany and United Kingdom).

These different choices will be elaborated throughout, presenting arguments for the understanding and interpretation of the data.

Delimitations

There are multiple functions of social services in contemporary society and of their role in meeting the social needs of people, raising the quality of life and securing the principles of human rights, social citizenship, social justice and cohesion. These central purposes of social services are not the core of the analysis; nevertheless, they may be relevant for governance, financing and employment in social services.

The quality of the services will be included in the analysis only to a certain extent due to the limitations of data and to the lack of a clear concept and understanding of what quality actually means in several areas. However, as the quality of welfare services is important, some elements related to quality will be included.

Overview of the Book

The book tries to grasp the interrelated central issues related to the above-mentioned core questions. This also reflects the way the book has been organised. Chapter 2 focuses on the theoretical debate about what social service actually means, as well as what its role is now and what it is expected to be in the future. This includes the following question: How can social service and sustainability in the delivery and financing of the welfare state be understood from a theoretical perspective?

This involves a review of literature on the key aspects of the dynamics of social services, including various explanations for growth in services. Especially three different types of explanation will be highlighted:

1. Demand-side explanation.

2. Supply-side interpretation.

3. Structural explanations.

Types of governance and service delivery in selected fields of social services (for example employment services, care of the elderly, child care) are also included due to their centrality with regard to the analyses of changes.

The chapter will include a short discussion on the chosen methodological approach, including arguments for the choice of the four countries. This was based upon their welfare state typologies, including the fact that work and de-commodification, on the one hand, have been central and, on the other hand, that having a job has come more into focus in dealing with welfare state developments. The welfare typology debate will be touched upon very briefly.

Given the importance of employment, financing and governance, the next three chapters deal with these issues. Chapter 3 focuses on the actual current knowledge about employment in social services. The main issues and discussion points relate to who is employed in the area and the types of employment, as well as how they influence employment levels in societies in general and the possible options for future sustainable development.

The financial crisis and expected fiscal pressures on the welfare states in the near future are core issues that will determine how to proceed and develop sustainability in the financing of welfare states, including the creation of new jobs (which is discussed in Chapter 4). The fiscal pressure due to globalisation and changes in demography is one issue; another is the expected outcome of the fiscal crisis leading to an even more prudent fiscal policy than earlier. This chapter will first present some theoretical positions on how to finance the welfare state and then proceed to a discussion on how to ensure and cope in a sustainable way with the fiscal pressure on the welfare state. The chapter will further analyse whether convergence in the choice of instruments and changes in financing have taken place within the EU since 2000. This will relate to a discussion on how to ensure the sustainable financing of the European welfare states both now and in the future in light of the impact of increasingly open economies and global economic development.

Chapter 5 discusses the changes in governance and innovation in the public sector. This includes changes in the boundaries between state, market and civil society, which have for a long time been undergoing change. This chapter will briefly outline what social innovation is and how it may influence development in the social services.

Building especially on the presentation of the concepts in Chapters 3 and 5, Chapter 6 focuses on the role of employment in social service and the expectations regarding different types of jobs in the future. A central question is asked: What are the factors influencing the development of social service and especially employment in social services? This chapter also links the issue of change in governance, especially the new social risks involving possible development in employment in the social services in the future.

The analyses in the first six chapters generally reflect on nation states. However, in recent years there has been an increase in the focus on whether welfare and the delivery of welfare are national prerogatives alone. Chapter 7 looks into the concept of Europeanisation. Some core issues involve the free movement of workers and how social services (compare regulation on the free movement of goods and services and the service directive) are regulated, as well as the delimitation between the role of the nation state and the supranational institutions. There is a focus on how governance, financing and regulation can be implemented in the border areas between the various actors, as well as how this might have an impact on the nation states’ options and possibilities for sustainable development in social services, or on the welfare states generally. There is an analysis of whether supranational development changes the role of national welfare states, including pressures on the ability to finance the welfare state (thereby continuing the discussion from Chapter 4) given the conditions of global and regional economic integration. The chapter thus scrutinises the development of supranational and national welfare states in the contested field of social services.

The following chapters contain four case analyses representing four countries. These four chapters (8 to 11) on the Czech Republic, Denmark, Germany and the United Kingdom highlight the restructuring and changes in the public/private mix in the four countries with a focus on the impact on employment. National data are used to supplement comparative data from the EU and OECD. There is a focus on social services especially (child care, elderly care and employment services). The choice of these four countries covers four distinct clusters of ‘worlds of welfare services’ as distinguis...

Table of contents

• Cover Page
• Title Page
• Copyright Page
• Contents
• List of Tables, Annexes and Boxes
• List of Abbreviations
• Preface
• Notes on Contributors
• 1 Introduction
• 2 Social Services and the Public Sector
• 3 Employment in the Health and Social Services: Evidence and Problems
• 4 Financing the Welfare States – Changes and Challenges
• 5 Social Innovation in Social Services
• 6 Factors Shaping Employment in Social Services
• 7 The Role of the EU on Welfare States – Focus on Social Services
• 8 Governance, Financing and Employment in Social Services in the Czech Republic
• 9 Governance, Financing and Employment in Social Services in Denmark
• 10 Governance, Financing and Employment in Social Services in Germany
• 11 Governance, Financing and Employment in Social Services in the United Kingdom
• 12 Comparing the National Cases
• 13 Conclusions
• References
• Index