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Municipalities to take over TE services in 2024 – ministerial working group decides on principles of reform

Ministry of Economic Affairs and Employment
Publication date 1.9.2021 8.45 | Published in English on 1.9.2021 at 16.04
Press release

In its mid-term policy review in spring 2021, the Government decided to continue preparations for the transfer of employment and economic development services (TE services) to municipalities. The services will be transferred to municipalities in 2024. At its meeting of 31 August 2021, the Ministerial Working Group on Promoting Employment decided on the principles that relate to the employment base of municipalities providing services, cooperation between municipalities and the transfer of staff.

“Transferring TE services to municipalities is a major and historic reform, which aims to strengthen employment through services that are better targeted and tailored to meet the needs of local labour markets. The transfer of TE services to municipalities brings them closer to customers. Giving the responsibility for employment, municipal education and business services to one organiser promotes the objective of faster employment,” Minister of Employment and chair of the ministerial working group Tuula Haatainen says.

Services to be provided by one or more municipalities with sufficient workforce

The working group decided that the services would be transferred to a municipality or a cooperation area consisting of several municipalities, which have an employment base of at least 20,000 persons. This corresponds to the minimum size of the local government pilots on employment, which are currently under way. This will ensure that sufficient resources are available for organising TE services and that the services are equally accessible to jobseekers throughout Finland. 

If a municipality does not fulfil the criteria for organising services alone, it should form a cooperation area with one or more municipalities. The cooperation areas should be functional in terms of the labour market and employment and they should border each other. 

Municipalities required to cooperate could decide on the form of cooperation in accordance with the Local Government Act, for example, whether to set up a joint municipal authority.

Municipalities could also decide on the area in which cooperation is to take place, while considering the above criteria.

In order to ensure that municipalities cooperate, legislation would lay down deadlines by which municipalities should decide on cooperation. If they failed to decide on the matter, the Government would decide on their behalf.

Transfer of services to consider customers and staff

Ministries, TE services, ELY Centres, KEHA Centre, municipalities and other stakeholders are currently preparing the transfer of TE services together.  As preparations continue, the Ministerial Working Group on Promoting Employment will outline more policies.

“The reform has been prepared in good cooperation with various operators and this close cooperation is set to continue throughout the preparation,” Haatainen says.

The reform will cause changes in regional administration. To the extent that the services of TE Offices are not transferred to municipalities, they will be transferred to ELY Centres or the KEHA Centre. More detailed policies on the services that will be transferred will be outlined in autumn.

“The transfer of services will be prepared in a controlled manner, taking account of customers and in accordance with good personnel policy, so that TE Offices can remain operational until the final transfer of duties,” Haatainen adds.

The working group stated at its meeting that the staff of TE Offices would be transferred to municipalities applying the transfer-of-business principle in accordance with the Civil Servants Act along with their duties and, as a rule, with existing job descriptions. 

“Our starting point is to safeguard the staff’s positions. Skilled, motivated and committed staff will continue to be the most important asset in providing effective and impactful TE services,” Minister Haatainen says.

More resources will be allocated to TE services during 2022. The Nordic labour market service model, which the Government decided on earlier, will increase the resources of TE services by EUR 70 million a year. More than 1,000 experts will be hired for customer service. This represents an increase of 40% compared with the resources in 2019.

The government proposal on the transfer of TE services is scheduled to be submitted to Parliament in September 2022. The responsibility for providing services would be transferred to municipalities during 2024.

The local government pilots on employment, which began on 1 March 2021, will be extended until the permanent transfer of TE services to municipalities. 

Iiris Niinikoski, Special Adviser to the Minister of Employment, tel. +358 295 047372
Jan Hjelt, Senior Ministerial Adviser, Ministry of Economic Affairs and Employment, tel. +358 295 048940

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