New employment initiative to combat social exclusion and foster employment

In order to combat social exclusion and to increase company growth and entrepreneurship, the Swedish government has initiated a concept of ‘New Start Offices’ located in areas of high unemployment. As these areas also contain large immigrant communities, the new initiative takes into account aspects of integration policy, according to the Ministry of Enterprise. The social partners gave a mixed reaction to the initiative.

Background

The Swedish government plans to set up so-called ‘New Start Offices’ (Nystartskontor) in local areas where social exclusion largely prevails and people depend on forms of public financial support, due, for example, to unemployment or sickness. The initiative aims to create the preconditions for more jobs by increasing the number of new companies throughout the country. If this objective is achieved, the New Start Offices will play a crucial role in combating social exclusion.

New Start Offices

The government is currently investigating how to develop the New Start Offices. Various organisations will cooperate in order to increase regional growth and employment, including the following: the Swedish Business Development Agency (Nutek stärker svenskt näringsliv, Nutek), the Swedish Social Insurance Agency (Försäkringskassan, FK), the National Labour Market Board (Arbetsmarknadsstyrelsen, AMS) and the National Tax Board (Skatteverket). This cooperation between public authorities to establish local offices is a way of coordinating public resources to ensure the best integrated service provision for facilitating business start-ups, akin to a ‘one-stop shop’ or an office combining all relevant services in one place.

Additional actors like the municipalities, county councils (landsting), sectoral organisations, non-governmental organisations (NGOs) and companies could also be involved in the set-up and implementation of the New Start Office. One of the ideas is to include the local businesses currently operating in the neighbourhood where the offices are to be based in order to promote the start-up of more enterprises locally.

Location and costs

The offices are to be strategically located in areas around the country – in municipalities and some city districts – where the employment rate is particularly low, sickness rates are high and many people are dependent on public financial support. These intended locations for the New Start Offices coincide with areas where many immigrants live and, therefore, the initiative also includes a dimension of integration policy, according to the Ministry of Enterprise, Energy and Communications (Näringsdepartementet).

Initial costs of the project are about SEK 30 million (€3.1 million, as at 27 March 2008) from the budget bill from 2007 and 2008. The possibility of gaining additional financing from the European Structural Funds is also being investigated.

Views of social partners

Both the trade unions and employers support the aims of combating social exclusion and increasing employment rates. However, they are doubtful whether the New Start Offices will be the most efficient method to do so, even if the offices could be helpful in some ways to foster business enterprise.

Trade unions

The Swedish Trade Union Confederation (Landsorganisationen i Sverige, LO) is in favour of more general labour market policies, such as greater investment in vocational education and training for all workers and individual support for immigrants as soon as they arrive in Sweden.

LO considers that there is a risk that the New Start Offices will focus too much on ethnicity in particular, as they will be located in areas with a large immigrant population. Instead, LO would like more general public support for more jobs directed to all people who are long-term unemployed. The confederation is concerned that the New Start Offices may tend to become a ‘quick fix’, poorly financed and without solving social exclusion.

Furthermore, LO believes that, even if the public agencies are located in a one-stop shop, this does not necessarily mean increased cooperation; the need also arises to change general regulations and administrative routines. In other words, the presence of different governmental agencies within one office will not be sufficient to ensure cooperation – the various bodies will have to adjust the way they work and how the diverse responsibilities are organised.

Employers

Meanwhile, the Confederation of Swedish Enterprise (Svenskt Näringsliv) concludes that this project could be one of many additional reforms to foster entrepreneurship. The employer group considers that the initiative is most positive if the New Start Offices will function like a one-stop shop providing all the necessary services and information for potential entrepreneurs. The employers are, however, critical of the fact that this national effort might spread public enterprise policy support too widely and thinly. Therefore, the confederation suggests first establishing a small number of offices – perhaps two – and then to evaluate the progress of these after some time.

The employer organisation emphasises the importance of combating social exclusion; however, it is uncertain if New Start Offices are the right method to achieve this objective. Furthermore, the confederation questions whether the best way to promote entrepreneurship is to target socially excluded groups in order to encourage them to start their own business.

Paul Andersson, Oxford Research