Questions and answers about municipalities’ responsibility to organise services - Ministry of Economic Affairs and Employment

Can individual duties encompassed by the municipalities’ responsibility, such as employer services, be assigned jointly to several municipalities?

Under the Local Government Act, the party responsible for organising services ensures the equal availability of services and other measures, determines their need, amount and quality, sees to the method of provision and monitoring of provision, and exercises the powers vested in the authorities.

In practice, this means that the party responsible for organising services decides how these duties are handled in its area. Therefore, individual duties can generally be transferred to member municipalities. As municipalities are authorities, it is also possible for the party responsible for service organisation to conclude an agreement with them on the handling of official duties. This requires that the party responsible for organising services makes a decision on the matter and agrees on it with the municipalities in question.

What kind of a funding base does the responsibility to organise services imply?

Municipalities will receive funding for the duties as general central government transfers to local government. This means that funding will be allocated to each municipality, and the municipalities remunerate the party responsible for organising services in the form of a) a member contribution to the joint municipal authority, or b) a payment share to the host municipality.

Should the scope of financial responsibility and the responsibility for organising services be the same?

Ideally, yes. However, as the local government structure is still quite heterogeneous and a significant number of municipalities have very limited resources, this is not possible for services such as those now being transferred from central government, which are inherently linked to fundamental rights. Instead, the provision of services must be ensured through municipal cooperation.

What role will municipalities that are not involved in the local government pilots on employment play in the provision of employment services after the introduction of wellbeing services counties at the beginning of 2023 and before the entry into force of the TE services reform 2024?

The local government pilots on employment will continue until the responsibility for organising TE services is transferred to municipalities. The pilots provide a solid basis for the creation of future employment services areas. However, the creation of new areas responsible for organising services requires cooperation agreements to be concluded either on joint decision-making bodies (the host municipality model) or on the establishment of joint municipal authorities.

How will local government collaboration areas be defined if the municipalities themselves fail to agree on them?

The government has the ultimate decision-making authority. However, it will exercise this authority only if the municipalities have not concluded cooperation agreements within the period of time provided by law. In this case, the government will determine the area, ensuring that the criteria for the responsibility to organise services are met.

Will the areas responsible for employment services be encouraged or instructed to carry out joint procurement? Or will they instead be given free rein to separately acquire all outsourced services, including TE services, such as labour market training, integration training and coaching services?

How will the reform ensure that customers have access to equal and lawful services?

Who will oversee the statutory nature of municipal employment services?

When the responsibility for organising services is transferred to municipalities, the duties will, in all respects, come under the scope of legislation applying to municipalities. In practice, this means that the provisions of the Local Government Act concerning municipal activities and oversight will be applied.

Does the responsibility to organise services include the option for contractual cooperation?

Many aspects related to employment services can be agreed by the party responsible for organising services and the member municipalities. However, it is essential that the party responsible for organising services retains the option to assume full responsibility for the services, if required.

How will the reform account for changes in the labour force?

Is the labour-force criteria of 20,000 people set in stone?

The Government may authorise a municipality or municipalities forming an employment area to organise employment services even if the number of employees in the municipality or the employment area is below 20,000 if:

forming a functional entity required for the provision of employment services is not practical due to the vast stretches of archipelago or long distances;
it is necessary for ensuring the linguistic rights of Finnish-speaking or Swedish-speaking residents;
it is necessary for ensuring the rights of the Sámi people with regard to their language and culture;
the establishment of an employment area would require the combination of several employment areas based on Statistics Finland’s statistical classification; or
granting an exception is justified on the basis of other special factors related to the region or the organisation, need or costs of services or other factors.

All exceptions would be subject to the requirement that the municipality or employment area has allocated sufficient financial and human resources to the arrangement of employment services and that the level and standard of services would not drop due to the exception. A municipality or an employment area would have to apply for an exception to the government and include its plan for arranging employment services with the application.

Is a labour force of 20,000 people adequate, and what does it mean in terms of, for example, services?

The surveys conducted in connection with preparations indicate that in view of, for example, the transferred personnel resources, a minimum labour force of 20,000 enables the establishment of a system that can secure the availability of services. However, it would be preferable that the areas were larger than this.

Will a maximum limit be set for labour force?

How does the labour force requirement of 20,000 people match the idea of each municipality knowing its customers best? If a local government collaboration area comprises several municipalities, won’t a single municipality have less say about matters?

When preparing the reform, a balance must be found between two different requirements – that of securing fundamental rights and that of ensuring municipal autonomy. The task of organising services will be transferred from central government to municipalities, and it is closely linked to fundamental rights. The transfer must be planned so that service availability can be safeguarded in the future.

If municipalities cooperate to form the minimum labour force of 20,000 people required to organise employment services, is it possible to create a joint authority of, for example three adjacent municipalities that belong to the same travel-to-work area but to different wellbeing services counties?

In principle, yes. At this stage of preparations, there is no known obstacle to forming an area with municipalities belonging to different wellbeing services counties. However, this calls for excellent cooperation among the municipalities, the areas in charge of employment services and the wellbeing services counties.

What kind of personnel resources are required for a labour force of 20,000?

When planning areas based on the labour force criterion of 20,000 persons, has any thought been given to the size of the areas, measured in kilometres from side to side?

Will legislation offer the flexibility to entrust the provision of services or support measures to even larger players? Or is the goal to provide all the services within a single area?

How can the goal of utilising the municipal ecosystem be achieved if the responsibility for service provision is entrusted to a local government collaboration area?

Is there a common definition for the municipal ecosystem? What does it mean?