Social partners criticise plans to decentralise measures for unemployed

In April 2004, the Danish government proposed, as part of a wider administrative reform, that responsibility for measures to get unemployed people back into work should be devolved to municipal authorities. The proposal has been heavily criticised by the social partners.

On 27 April 2004, the government issued a proposal for the future administrative structure of Denmark, entitled 'The new Denmark' (Det nye Danmark). This proposal - which is based, among other elements, on an extensive report on the Danish county/municipal structure - has been drawn up by a so-called Structure Commission (Strukturkommissionen) and aims to reform the present administrative structure in the direction of fewer and larger counties and municipalities. Presently, Denmark has 13 counties, 269 municipalities and three areas with special status as both county and municipality (Copenhagen, Frederiksberg and Bornholm)

The proposal also deals with measures in relation to unemployed people. The government believes that measures to get this group back into work should be joined together in a single system 'for the benefit of the unemployed'. The municipalities should set up job centres to offer services to all unemployed people, whether they are insured or not. The state should monitor and lay down the framework for these measures. Since it came to office in September 2001, the coalition government of the Liberal Party (Venstre) and Conservative Party (Det Konservative Folkeparti) has sought to concentrate employment measures for unemployed people in a single authority, replacing the previous dual system of separate provision for those with unemployment insurance and those without such insurance, who receive only social assistance benefits (DK0210102F). The aim of the new proposal is to complete the steps which have already been taken in this direction, with municipalities taking over the responsibility for a single system.

The Danish Confederation of Trade Unions (Landsorganisationen i Danmark, LO) and the Danish Employers’ Confederation (Dansk Arbejdsgiverforening, DA) have strongly criticised the proposal on measures for the unemployed, which they call 'meaningless and grotesque'. The government’s plan for municipalities to take over responsibility for these measures will, it is claimed, help neither people on social assistance nor people on unemployment benefits. According to both LO and DA, the proposal will lead to higher unemployment instead of reducing it, because the municipalities are not geared to thinking across municipal boundaries. If the government’s proposal is adopted, the future will be characterised by less mobility, lower flexibility and a poorer match between the unemployed and job vacancies, the social partners argue.

'It will be impossible to draw up a national employment strategy if the responsibility is split up among the municipalities,' said Hans Jensen, president of LO, at a meeting with local and regional LO representatives: 'All analyses, including the report of the Structure Commission, show that the municipalities are not sufficiently qualified to be responsible for employment policy. Furthermore, the analyses show that there are wide differences among the activities of municipalities and that the big municipalities are not better than the medium-sized and small municipalities when it comes to bringing people into employment. There is nothing which seems to indicate that a new municipal structure with fewer and bigger municipalities will create a better basis for improving employment measures. This is to gamble with the unemployed.'

According to Henrik Bach Mortensen, a DA director, the proposal 'implies a significant risk that employment policy will turn into local policy and will not contribute to a solution to the long-term economic and structural challenges'. He stated that employment policy should be the responsibility of the government and parliament (the Folketing) and not the 100 or more new municipal councils.

Political negotiations over the 'new Denmark' proposals are expected to be concluded before parliament's summer recess. The intention is that the new legislation should come into operation on 1 January 2007.

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