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Sales activities by government agencies – how and why? (About the public sector)

According to its instruction, Statskontoret (the Swedish Agency for Public Management) is to assist the Government by means of documentation for the development of public administration. This assistance includes follow-up and regular description of trends in the public sector. The present report on sales activities by government agencies is part of that assignment.

Background

In the 2010 public administration bill, the Government pointed to the existence of potential problems and risks when government agencies conduct activities in competition with private companies. The Government terms this sales activities. The Government's assessment in the bill was that government agencies should not as a rule sell goods and services on the market and that the extent of sales activities should be reduced.

Against this background, Statskontoret's report presents a discussion and analysis of the motives for, and organisation of, sales activities by government agencies. The aim of the report is to furnish knowledge on why government agencies conduct sales activities and the way in which these activities are organised. The purpose is to promote further discussion on the assessments presented in the public administration bill.

Ten motives for why government agencies conduct sales activities

Statskontoret has identified ten different motives that exist or may exist for why government agencies conduct sales activities. These motives may be grouped into five different categories within which there are certain similarities that distinguish them from other motives:

Motive category   Motive for sales activities by government agencies
The sales activities…
The sales activities secure access to goods and
services that are not provided on the market

A
B

… ensure that services or goods are available in all parts of the country
… take place for reasons of preparedness
The sales activities develop the agency's
core activities

C

D
E

… provide knowledge of needs and demands in core activities
… develop personnel expertise
… retain personnel or facilitate recruitment
The sales activities contribute to the financing
of the agency's core activities

F

G

… constitute a source of income for the agency's core activities
… offer goods and services "between agencies" to save money or procurement resources
The sales activities contribute to the fulfilment
of overarching political goals

H

I

… represent a channel for disseminating information and knowledge generated in the core activities
… constitute an instrument of labour-market policy
The sales activities take place for
historical reasons
J … have been carried on by the agency for a long time

Statskontoret assesses motives A, C, F and H to be more common motives or explanations for why government agencies conduct sales activities than the other motives. In addition, Statskontoret perceives historical reasons to be a relatively frequent factor for the existence of sales activities.

The most common way for an agency to conduct its sales activities is to integrate them with other activities organisationally, but to separate them financially.

Statskontoret's conclusions and recommendations

In recent years, certain changes in sales activities by government agencies have been implemented in line with the Government's emphasis in the public administration bill. One example of this is the formation of Metria AB, whereby parts of Lantmäteriet's sales activities were converted into company form.

At the same time, Statskontoret's assessment is that there has not been any significant net reduction in sales activities. Statskontoret submits the following general recommendations for consideration by the Government and agencies that conduct sales activities:

  • Achieve a more explicit and uniform application of the concepts concerning sales activities
  • Review sales activities in the agencies' instructions.
  • Implement external structured analysis of the markets in which the agencies operate.
  • The agencies can themselves make their sales activities explicit and reduce the risk of distorted competition and a mix-up of functions. Examples of this are to draft policy documents on sales activities and to review the opportunities for financially and organisationally separating sales activities from other activities.