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Agreements as policy instruments (On the public sector)

In this report Statskontoret (the Swedish Agency for Public Management) analyses agreements between the state and the Swedish Association of Local Authorities and Regions (SALAR) and their function as policy instruments. The purpose of this study is to illustrate how agreements can be used as policy instruments by the government, when they are most effective and when it is more appropriate to use other policy instruments.

Agreements are concluded between two parties and are voluntary. The agreements thereby represent a form of governance which differs from prevalent policy instruments such as legislation and management by results. In a previous analysis of national coordinators, Statskontoret has claimed that the use of untraditional forms of governance has become increasingly common. In the framework of agreements, different forms of governance are often combined, such as specially destined state subsidies and initiatives to increase knowledge.

Through agreements, the state takes a more active role in the improvement of services which are managed by municipalities and county councils. Agreements also entail new roles and working methods for SALAR, for state authorities and for municipalities and county councils. Therefore it is important to clarify roles, responsibilities and processes as far as possible in the continued work on agreements.

Agreements between the government and SALAR occur within several different areas but the majority are within the area of health care and social services. The agreements we have analysed in this study are to be found in this area and comprise approximately SEK 5.7 billion from the state budget for 2014. The majority of these funds, approximately SEK 4.5 billion, are distributed among municipalities and county councils according to performance levels or results.

This study is mainly founded in policy evaluations which Statskontoret has conducted for two agreements within the area of health care and social services; the agreement on support for an evidence-based practice for good quality in social services and the agreement on coordinated health and social care for the most severely ill elderly. Within the framework of these evaluations, which run between 2010 and 2015, we have made observations on how agreements function as policy instruments in a general perspective. Together with previous reports on public governance, this study presents a comprehensive view of our observations in the area.

When should agreements be used?

The analysis of Statskontoret shows that agreements which aim to increase knowledge or systematise the work method has the condition to function well since they are voluntary in nature. Previous reports by Statskontoret show that these agreements have contributed to the development of activities, even if the goals of the agreements have not yet been attained.

Agreements can also be effective if the government wants to focus on one area, for example in matters which are normally managed and developed by municipalities and county councils. The fact that both parties have identified a particular area as important may be of great symbolic value.

The overall assessment of Statskontoret is that if the government wants to prioritise an area and at the same time make use of local conditions, agreements can be an effective policy instrument. However, the government should be relatively restrictive with the use of agreements, among other things, since the amount of agreements per se may counteract the purpose of the work itself, which is often to focus on a prioritised issue. Another reason for being restrictive with agreements is that the Swedish governance model already assigns the division of responsibility between the state, municipalities and county councils in a clear manner. Traditional policy instruments should be used as far as possible. Agreements should instead be used in cases when the government sees a need to supplement customary control with more collaboration, for example, in issues which need to be handled by all administrative levels and which require shared learning.

When should agreements not be used?

Statskontoret claims that agreements cannot replace the existing public governance model and the division of responsibility between the state, municipalities and county councils. Nor is it appropriate to use agreements to achieve compliance with laws and regulations. A special reward system for compliance with certain legal requirements entails the risk that other legal requirements will become less prioritised. It is also problematic if financial compensation is provided for requirements which are less ambitious than those stipulated by law.

Furthermore, agreements are not the most efficient way to manage fixed term projects, within which the responsible authorities will not continue work after the project ends. The management of agreements entails a greater workload for the Government Offices, SALAR and the responsible authorities alike. In order to justify the higher workload, the aim of the agreement must be such that the actors can continue to improve the work once the agreement has ended.

How should agreements be formulated?

Like all policy instruments, agreements have their weaknesses. For example, they are not formally binding and the parties which conclude agreements do not have the direct responsibility for implementation. Furthermore, SALAR gets partially conflicting roles as it acts as a standard-upholding authority for its members, whilst at the same time being a special interest group. SALAR's status within civil law as an interest group also entails that the government's opportunities for control and insight are not the same as for state authorities. When formulating an agreement and when managing the work, efforts should be made to mitigate or compensate for the weaknesses inherent in agreements. There are also measures which can be taken to strengthen the policy effects of agreements. For example, it can entail ensuring that the problem view is shared and the selected initiatives are accepted by the parties as well as by responsible authorities and services.