Public service merger stalls payment of unemployment benefits

The Norwegian Welfare and Labour Administration (NAV) is currently unable to cope with the increasing number of applications for unemployment benefits. Lack of capacity to deal with the situation is being connected to the ongoing restructuring of the NAV services as well as the rising number of unemployed people due to the global economic crisis. In March 2009, the government announced extraordinary funding and simplified procedures to manage the problem.

Background

The restructuring of Norwegian public labour market and welfare services involves the merger of employment, national insurance and social security services into a single organisation – the Norwegian Labour and Welfare Administration (Ny arbeids- og velferdsforvaltningen, NAV) (NO0610069I, NO0409106F). The main purpose of the NAV reform has been to coordinate the frontline services of all three public services at local level and thereby encourage more people into employment. Other important objectives are to create a more user-friendly welfare service, to enhance coordination among the various service agencies and to increase welfare service efficiency. The reform was approved by the Norwegian parliament (Stortinget) in 2005 and the first NAV office opened at the end of 2006. The NAV reform involves about 16,000 employees and the merger process is due to be completed by 2010.

The creation of NAV has been more demanding than first expected. For instance, the agency has experienced major difficulties in trying to coordinate different computer systems and data networks. Many employees have had to learn new tasks; at the same time, the regulatory framework that they are to manage and monitor is changing. Following reports of increasing sickness absenteeism in NAV offices and working environment hazards throughout the country, the Norwegian Labour Inspection Authority (Arbeidstilsynet) decided in November 2008 to monitor more closely the merger process in NAV.

Increased challenges in wake of financial crisis

At the beginning of 2009, there were mounting reports of difficulties at NAV in dealing with the increasing number of applications for unemployment benefits. Unemployed people in the southern counties of Hordaland and Oslo have had to wait several weeks in order to get their applications considered by NAV; in many cases, they have been asked to apply for social welfare benefits to cover their day-to-day expenses until the unemployment benefit application is processed.

Details of new measures

On 20 March 2009, the Minister of Labour and Social Inclusion, Dag Terje Andersen, put a proposal before parliament recommending new measures in order to cope with the present situation (St.prp. No. 51 2008–2009 (in Norwegian, 513Kb PDF) and press release (in Norwegian)). NAV will receive increased resources in the form of an additional grant of NOK 710 million (€81.7 million as at 27 April 2009). This will enable the agency to maintain the number of personnel at current levels and, if necessary, augment its workforce if unemployment continues to rise. In addition, part of the increased grant will be used to implement measures to rectify the problems experienced in relation to NAV’s internal computer system.

Furthermore, the regulatory framework will be simplified in some areas to ensure that unemployment benefits are paid quickly in cases where the consideration process is protracted. If an application for unemployment benefits has not been considered and been subject to a decision within 21 days – which is the deadline placed on NAV to make decisions on such issues – unemployment benefits will nevertheless be paid.

Moreover, some parts of the NAV reform will be postponed until 2010, and efforts will be directed at organisational measures and competence development with a view to simplifying procedures and improving services.

Trade union views

The trade unions supported, in principle, the creation of NAV but are now increasingly critical of the way in which the reform is being implemented; as noted, the restructuring involves the merging of three previous regulatory agencies – two state agencies and one municipal agency. The unions have highlighted the apparent failure to take into account the challenges posed by employees having to learn new tasks while at the same time maintaining normal services. For that reason, the trade unions argue that NAV must be granted increased funds to deal with the challenges arising in the course of the restructuring process.

The Norwegian Civil Service Union (Norsk Tjenestemannslag, NTL), which is the largest trade union for NAV employees – organising around 6,000 employees – has criticised the reform for lacking governmental control, as well as the extensive use of consultants and temporary agency workers. However, NTL, along with other trade unions representing workers in NAV, is satisfied with the latest proposed measures, although some unions point out that further provisions may be needed in the future.

Kristin Alsos, Fafo Institute for Applied Social Science