They were weighing the nappies. Or rather, they were weighing the pee in the nappies. To see how much a resident urinated, staff weighed their soiled incontinence pads. The idea was that they could learn when the elderly person’s nappy was likely to be ‘full’ and needed to be replaced, to minimise the number of ‘unnecessary’ changes, therefore saving money for the company. ‘It is terrible for the elderly, but also for us who have to spend the whole morning weighing pensioners’ used diapers,’ said a staff member, as employees came forward to blow the whistle on Koppargården retirement home in Stockholm. Worried staff and relatives made a string of allegations. Management tried to silence the relatives of a man who died soon after moving to the home, his daughter said. She found him alone and covered in his own faeces. ‘He had been lying and screaming for help but nobody came. He was never himself again after that,’ she said.
The scandal at Koppargården, owned by private care company Carema, sparked a national debate about provision of elderly care by for-profit companies. It went to the heart of the unease felt by many Swedes towards an increasing use of the private sector to provide public services funded by the taxpayer. Elderly care was just one aspect of far-reaching changes to Sweden’s famed welfare state, and the scandal gives us an alternative perspective on the lenticular image of generous parental leave and family support. Until the 1990s, the country’s extensive cradle-to-grave social services were virtually a monopoly, in which the public sector not only funded but also provided the services. Private provision of tax-funded eldercare was almost non-existent in the 1980s, but today it makes up more than a fifth of residential and homecare provision. The Carema affair continues to colour the discussion, not least because its owners included US private equity company KKR, with its reputation for hard-nosed profit-seeking. Opinion polls at the time suggested that the majority of Swedes were opposed to companies making any profits at all in the welfare sector, and the question of ‘profits from welfare’ has remained high on the political agenda ever since.
Sweden’s experiment with private-sector involvement in its schools has also come under intense scrutiny. No other European country has entrusted so much of its school system to private companies. In the early 1990s, the government introduced school choice with the aim of boosting performance through competition. It also allowed for the establishment of independent ‘free’ schools – privately run, for-profit schools that are publicly funded through a voucher scheme. Around one-fifth of children now attend these free schools.
At first, the system was held up as a model for expanding the market in education, winning the admiration of free-market advocates round the world. One such supporter was Michael Gove, the UK’s former education secretary, who declared in 2008: ‘We need a Swedish education system.’ But poor results in the OECD’s influential Pisa school performance rankings outraged parents and sparked a national debate on the future of Swedish education. No other country in the survey suffered a steeper decline in reading, mathematics and science results during the first decade of the century – a period when the country’s share of top performers in mathematics roughly halved.
At the same time, the education sector has endured scandals of its own. JB Education, owned by Danish private equity, declared itself bankrupt in 2013, causing panic among its 10,000 students. Shortly afterwards, Swedes were appalled by reports that a chain of kindergartens had cut its food budget to around £1 per child per day, and that toddlers were being fed just bread and water (well, crispbread and water – this was Scandinavia after all). The OECD called for sweeping changes. The market in Sweden had failed to learn from the good examples, it said: ‘There are some very successful free schools, but the system has not taken advantage of them, while the underperforming ones have not been tackled.’
Wherever you look, in the past three decades there have been major changes to the welfare state, with controversy never far away. In 1998, Sweden became one of the first nations in Europe to scrap defined benefit pensions and replace them with a system in which every Swede invests their retirement money in privately managed funds, the performance of which depends on the ups and downs of stock markets. The self-evident social goal of a pension system – to maintain the living standards of the elderly – now became a secondary concern, critics argued, by making pensioners’ incomes dependent on market forces outside their control.
Sweden’s healthcare system is superb, but it is not free – each contact with a professional costs money, and drugs are expensive. The number of hospital beds has fallen to the lowest per capita in the developed world, ahead of only Mexico and Chile, while the lengthening queue for operations has fuelled talk of a healthcare crisis. Maternity services have been particularly hard hit, with recent media reports of women giving birth in cars because their local clinic had closed down.
Social policy more generally has been strongly influenced by the New Public Management movement enthusiastically adopted by the UK in the 1980s, aiming to run public-sector bodies more like businesses. This has resulted in an increase in privatisation, competition and consumerism, and of course, budget cuts. When I first moved to Sweden, I had a job at the journalism department at Gothenburg University. In ignorance, I thought I had arrived in the land of milk and honey, a social democratic paradise of well-funded tertiary education. So it came as a shock when I was made redundant a few months later because of big cuts to the department’s budget, thanks to a new method for calculating the rent it paid on its premises. My overworked colleagues were dropping like flies after ‘hitting the wall’, the Swedish equivalent of burnout.
Alongside the market for welfare services have come fat salaries and lavish share options for those at the top of private companies in the sector, some of whom have become easy targets for the media. After Carema changed its name and put controversy behind it, its new boss found himself earning £350,000 a year and owning shares worth nearly £4 million. Welfare millionaires also number the left among them. Former Social Democrat politician and serial welfare entrepreneur Jan Emanuel Johansson made roughly £20 million in 2010 when he sold his business running care homes for troubled young people. When Sweden began receiving a large number of asylum seekers (see Part 6), he started a profitable business taking government money to house and feed them. Entrepreneurs who made a fast buck in this sector included a former right-wing politician who had earlier led a political party that wanted to cut the number of asylum seekers.
Discussions of the welfare state in Sweden inevitably hark back to the ‘people’s home’, or folkhemmet, a concept first floated by Social Democrats in 1928, which was solidified after 1945. The people’s home became synonymous with the Swedish model of the strong welfare state. ‘The basis of a home is community and common sense,’ the party’s leader Per Albin Hansson famously said, describing a vision of a country without social or economic divisions. ‘A good home does not know privileged or underprivileged, favourites or stepchildren. No one looks down on others. No one tries to gain an advantage.… In a good home, equality, care, cooperation and helpfulness prevail.’ Many Swedes feel nostalgic for the certainties and stability that they associate with the heyday of the People’s Home, when the reality of welfare provision seemed to match Hansson’s lofty ambition. Populist politicians today pledge to restore it, offering consensus and community in place of fragmentation and polarisation.
The public sector in Sweden today is a lean – and sometimes mean – welfare machine, in comparison to a generation ago. ‘In the Swedish case there have been quite tremendous changes,’ says social policy professor Kenneth Nelson. ‘I would not say there is no Nordic model any more, but I question the idea whether Sweden belongs to the traditional social democratic welfare state.’ Nelson compared unemployment benefits in Sweden with other industrialised nations, and found they were the most generous in the early 1990s, perfectly in line with the old Swedish model. By 2010, however, Sweden was at the other end of the spectrum. Regarding sickness benefits, the level of income replacement is still high, but it is harder to qualify for them, and when you do the period of entitlement is shorter. Sweden’s long-term disability provision is now worse than the advanced country average, Nelson says.
The ‘people’s home’ still provides a resilient safety net for most of the people most of the time. Private-sector providers can offer excellent services – who cares what colour the cat is, as long as it catches mice? The debate over Carema’s elderly care home at Koppargården was justified, but it took aim at the wrong target, say critics such as Thord Eriksson, a liberal writer and author of a book on elderly care. The key issue is regulating to ensure a high quality of services, not limiting the level of profits, he argues. Care quality at Koppargården was already problematic before it was privatised: ‘We talked about profits and we forgot about the rest. It was a shortcut – the general discussion about quality in elderly care is much more complex than just profits.’ As for weighing diapers, you can find references to the practice in Swedish healthcare literature long before the Carema scandal, as a method for choosing the appropriate incontinence product. Linking the practice to profit-seeking was perhaps a cheap shot at the private sector.
In the context of the new people’s home, with its emphasis on efficiency and performance, the generosity of Sweden’s family policies stands out in even sharper contrast. In other areas of the welfare state, the country has embarked on large-scale experiments in allowing the market to deliver public services. The jury is still out, and the future direction unclear.