The Finnish flag at Helsinki City Hall

The Finnish Government should commission an independent assessment of how the national reform of social welfare and health care will impact the economy and investment capabilities of cities

The mayors of Finland’s 21 biggest cities: The Finnish Government should commission an independent assessment of how the national reform of social welfare and health care will impact the economy and investment capabilities of cities 

The Finnish Council of Regulatory Impact Analysis issued a statement on 9 November 2020 on the Finnish Government’s updated proposal concerning the national reform of social welfare and health care. The Council’s view is that the assessment of the proposal’s impact is characterized by an exceptionally high level of uncertainty, and it is difficult to determine the total effects of the proposal on the public economy.

In their statement, the Finnish Council of Regulatory Impact Analysis expresses their opinion that the draft proposal concerning the national reform of social welfare and health care should elaborate on the possible impact of the narrowing of municipal tax revenue on the investments of municipalities and on the preconditions for their industrial policy. The Council states that, in addition to a decline in municipal tax revenue, the relative indebtedness of municipalities will increase and their operational economy will be reduced by half, which will affect their ability to raise funds and to make investments as well as their preconditions for carrying out their industrial policy.

The 21 biggest cities of Finland, known as C21 cities, have repeatedly raised these questions. There is a great risk that the national reform of social welfare and health care, when implemented, will weaken the preconditions of municipalities and cities to pursue their industrial policy, and that the reform will weaken their competitiveness and their opportunities to invest in sustainable growth. In this way, the reform will markedly impact the national economy.

The mayors of the C21 cities insist that the Finnish Government act on the statement of the Finnish Council of Regulatory Impact Analysis by commissioning an independent and extensive assessment of the impact of the national reform of social welfare and health care on the economy and on the investing capabilities of municipalities and cities. Cities are ready for cooperation in the implementation of this assessment. Although the statement of the Council, which is an independent and impartial body, is not binding to ministries, it is clear that the portentous observations of the Council underscore the need to analyze in more detail what possibilities cities and municipalities have to carry out their responsibilities and duties, to manage their loans and to meet their other obligations as the national reform of social welfare and health care is implemented. 

Read more:

C21 network – the network of the 21 biggest cities of Finland (page in Finnish)

Photo: Paavo Jantunen