Education and Elderly Care in Denmark, Norway and Sweden: National Policies and Legal Frameworks for Private Providers

Three Government Models

Each of the government models reflects a specific solution for organisation and interaction between public and private actors—nonprofit as well as for-profit—in the production of welfare services. The solutions are different with regard to where discretionary power over central aspects of service production is allocated.

We distinguish between three types of discretionary power. Production discretion involves the competence and possibility to specify the goals and means of the welfare service in question. Payoff discretion refers to the freedom to decide how the final outcome in monetary terms should be used and distributed by the private service provider. This also concerns the opportunity for the provider to transfer profits to owners and investors. Moreover, payoff discretion involves defining the end result: Should it be perceived as good or bad? The organisation of supervision and control may be significant in this respect. The service provider will have a larger extent of payoff discretion if supervision is based on self-evaluation with general evaluation criteria, compared with supervision carried out by a national authority and based on detailed criteria. Finally, preference discretion refers to the normative view and understanding of the welfare service and the mission behind it. Preferences and underlying values may be related to pedagogy, professional ethics, beliefs, philosophy or religious faith. Discretion in service production therefore involves a kind of freedom to define the public interest behind the service provision (Donahue and Zeckhauser 2006, 514).

Looking at how discretion is approached in the three government models, the public sector is assumed to have full discretionary power in the direct government model, regardless of whether a purely public organisation or contracting is chosen. In the latter case, the public principal commissions the work and governs through monopoly of discretion with regard to production, payoff and preferences. The monopoly will manifest in the contract, which will appear as a means for control and performance measuring (Phillips and Smith 2011). In this context, ‘contracting’ does not refer to the existence of a written contract, but rather interaction between the authorities and a private actor which is solely based on the simple delegation of tasks without any freedom of discretion.

In the disconnected government model, freedom of discretion is assumed to be fully handed over to the nonpublic service provider through the free market or pure philanthropy. The model of the free market assumes that government and organisation of welfare services take place through users’ freedom of choice and competition between private service providers. The difference between free market and pure philanthropy is not related to discretion, but to the kind of private actors involved. In pure philanthropy, private actors are nonprofit, whereas a pure market model includes only for-profit actors. In real life, however, the picture is more mixed.

The indirect government category in the model comprises collaborative governance. ¹ This refers to collaboration between a public principal and a private—for-profit or nonprofit—service provider characterised by self-regulation within a specific political and institutional framework (Sørensen and Torfing 2008, 10). Moreover, with regard to discretion, we consider collaborative governance to be ‘[t]he murky middle ground, in which both parties exercise discretion’ (Donahue and Zeckhauser 2006, 514). The empirical question is how and to what extent discretion is divided when it comes to ‘defining not only the means by which a goal is achieved but the details of the goal itself’ (Donahue and Zeckhauser 2006, 497). In line with Donahue and Zeckhauser, we underline two considerations that are important for how discretion is shared between actors. First, a consideration of democracy requires that ‘a large share of discretion must rest with a player who is answerable to the public at large’ (2006, 509). At the same time, both the public principal and the nonpublic provider must have some share of discretion—otherwise, the relationship would not be collaborative (2006, 509).

Public–private interaction based on the idea of collaborative governance is often praised for its flexibility and capacity; but, as Donahue and Zeckhauser (2006, 497) stated, ‘at the price of more ambiguous lines of authority and far greater strategic complexity’.

Table 3.1 presents the models of government in welfare production as ideal types. This is appropriate as an analytic framework when the intention is to identify similarities and differences; however, we are aware that it does not necessarily represent the whole empirical reality. The pure models may be combined with each other to create a more complex regime of government in welfare production. For instance, such a layered government may combine the idea of free user choice with elements from the (in)direct model when the authorities, through pure public organisation, contracting or collaboration with more than one service provider, facilitate the free choice of the user. Here, layered government implies organising the welfare mix through two steps: first, the selection of providers by the authority and then, in the next step, selection by individual users.

The remainder of this chapter comprises three sections. Each section discusses factors at the national level that may affect the use of nonpublic actors in local service production within primary and lower secondary education, and institution-based elderly care. We limit the analysis to the state as of mid-2015. First, in the following section, we briefly outline the EU Public Procurement Directive (Directive 2004/18/EC) that has been in effect the last decade and how national legislation in the three countries is related to it. To fully understand the national framework, it is necessary to take into account that EU policies set limits for the national legal framework. Norway, Denmark and Sweden are obliged to implement EU directives. Regarding outsourcing of welfare services, the EU Public Procurement Directive is especially relevant. Second, we address national policies on schools and elderly care. Within each country, national policy standards are set by means of various policy documents—legislation, instructions, guidelines, etc. Based on the analysis of these national policy documents, we compare and discuss national policies which direct how contracts are awarded and coordinated within these municipal welfare services. Finally, in the concluding section, we summarise our findings and discuss underlying political factors that may explain national policies as well as the welfare mix.

National Implementation of the EU Public Procurement Directive

Basically, contract-based public procurement is regulated by a common EU Directive in Norway, Denmark and Sweden. However, while implementing the Directive, each Scandinavian country has left its own distinctive mark on the regulation of public procurement within its own borders. Here we will describe some of the country-specific conditions at the national legal level that have implications for the two welfare services, institution-based elderly care and primary and lower secondary education, and more specifically, the scope for nonprofit service providers.

The EU Directive on public procurement was implemented in Norwegian legislation through the Public Procurement Act in 1992 (Norwegian: Lov om offentlige anskaffelser m.v.). This act and its regulations have been revised several times since then (Ødegård 2006, Segaard 2015). ⁶ In addition, some other kinds of public procurements outside the scope of the Directive have been regulated in Norway for years. This is the case for service concessions (Udbudsrådet 2012, 19-20), procurement with lower threshold amounts than those defined by the EU, and ‘B’ (non-priority) services. Non-priority services include, for example, health and social services. In general, it is stated that all public procurements must fulfil the requirements of non-discrimination, transparency and predictability according to §5 in LOV-1999-07-16-69 (The Norwegian Government 2006). The Norwegian government emphasises that it is always possible to negotiate with the providers. In this way, national regulations are considered more flexible than the Directive (Konkurransepolitisk avdeling 2008).

Regarding opportunities for nonprofit organisations to provide welfare services within the health and social sector, the Norwegian government implemented an exception to the rules on public procurements in 2004 (FAD 2013). This exception went out of force when Norway implemented new rules on public procurements in June 2016 (Directive 2014/24/EU). At the time of writing, the majority in the Norwegian Parliament still want to support the nonprofit sector and be able to give priority to nonprofit service providers within the health and social sector. However, it is uncertain how this will be carried out. The Norwegian government is in the process of clarifying whether it is possible to maintain the exception through a so-called ‘adaptation text’ (DIFI 2014; Sejersted 2014). Nevertheless, the exception was important for the regulation of the welfare mix in Norway because it meant that national and local authorities could choose between negotiating with nonprofit organisations and following the ordinary rules for public procurements (Konkurransepolitisk avdeling 2005). Moreover, the exception implied that the contracting authority did not need to follow Part II of the regulation, including the requirement for national tender announcements in the Norwegian national notification online database for public procurement. It was thus possible to exclude contracts with nonprofit providers from the requirement for competitive tendering (Konkurransepolitisk avdeling 2008). However, it was also stressed that the contracting authority ought to pursue competition between nonprofit organisations (Konkurransepolitisk avdeling 2008).

The background for this exception was that competitive tendering—where nonprofit actors must compete on equal terms with for-profit actors—was seen to contradict the overall aim of promoting societal engagement and collaboration with nonprofit organisations (FAD 2013, 99; see also Konkurransepolitisk avdeling 2005). Since 2007, the regulations have explicitly stated that in the case of public procurement of health and social services from nonprofit organisations, it is up to the contracting authority to assess whether the whole legislation on public procurement should be followed (Part I–III) or the exception should be used (FAD 2006, 2013). In other words, it is possible to give special treatment to nonprofit health and social service providers in Norway.

The Norwegian regulation of public procurement does not provide a precise definition of ‘nonprofit organisation’, but it does describe some of its characteristics (FAD 2013, 99ff). Nonprofit organisations are distinguished by volunteering and charitable work; they carry out tasks for society on behalf of public authorities, and their profit, if any, is used for their charitable work. Nonprofit organisations will often, but not necessarily, be organised as foundations (FAD 2006, 87; see also FAD 2013, 99ff).

Denmark implemented the EU Directive through a so-called Executive Order; in other words, a set of rules that expands and supplements an act (Udbudsportalen 2014a; Udbudsrådet 2012). The first Executive Order that implemented the EU Directive on public procurement came into effect on July 1, 1993 (BEK nr 415 af 22/06/1993), while the Executive Order in force in 2015 was implemented in 2011 (BEK nr 712 af 15/06/2011). Moreover, public procurements in Denmark are regulated by the Procurement Act (Danish: Tilbudsloven). ⁷ This act comes into effect when the contract value is between 500.000 DKR and the threshold amounts as defined at the EU level. This means that Denmark—like Norway—has expanded the scope of public procurement regulations compared to the minimum requirements defined in the EU Directive. Until 2013, non-priority services, including health and social services, were encompassed by the Procurement Act, but this is no longer the case. ⁸

Regarding possible exceptions to the EU Directive, the argument based on the so-called ‘in-house case law’ is emphasised in Danish policy documents. For example, the Konkurrencestyrelsen (2010, 2) stated that ‘the tasks carried out by self-owning institutions can be characterised as services executed in-house, and are therefore not subject to public procurement regulations’ (our translation). Here, ‘tasks’ refer to a situation where a self-owning institution provides a welfare service (e.g., institution-based elderly care) on behalf of a municipality and the following two criteria are fulfilled (Udbudsportalen 2015, our translation):

In Sweden, the EU Directive on public procurement was implemented in national legislation in 1995. ⁹ Konkurrensverket, which is the inspection authority, stresses that following Swedish regulations on public procurements ensures that EU regulations are fulfilled as well (Konkurrensverket 2014). The relevant Swedish legislation builds mainly on the EU Directive 2004/18/EG. Regarding possible exceptions to the rules on public procurements, Swedish authorities, as with the Danish, refer to the in-house case law—the criterion of contracting entity and the criterion of control—and legal practice from the Court of Justice of the European Union (see Udbudsrådet 2012, 18; The Swedish Riksdag 2012).

Looking at the threshold amounts that determine whether a public procurement is the subject of national legislation, the thresholds are similar in Denmark and Norway but somewhat lower in Sweden (Udbudsrådet 2012, Fig. 2.1). The national threshold amounts defined in the national regulations of all three Scandinavian countries are lower than the threshold amount defined in the EU Directive.

Finally, it should be noted that an exception to the rules on public procurements for nonprofit actors parallel to the one in place in Norway does not exist in either Sweden or Denmark (Kronbøl 2015). Moreover, only Norwegian national legislation includes regulations on service concessions (Udbudsrådet 2012, 19–20). However, it is possible for Danish and Swedish authorities (e.g., in a municipality) to sign a contract with a nonprofit service provider without following the complete regulations for public procurements. The reason for this is the in-house case law (see Udbudsrådet 2012, 18; Konkurrencestyrelsen 2010; The Swedish Riksdag 2012).

The Importance of the EU Public Procurement Directive

Public welfare services are mainly a municipal task in Norway, Denmark and Sweden, and the municipalities have to some extent the power to decide how the services should be organised—with consequences for the welfare mix. Local autonomy and the principle of subsidiarity are traditionally appreciated in Scandinavian local government (Rose 2005, 57–60). However, the municipalities do not act in a vacuum, and the EU Public Procurement Directive affects local as well as national policymaking. The fact that municipalities have a certain amount of latitude is nevertheless important to stress.

The EU Directive itself does not exclude any of the three ideal models of government specified in Table 3.1: neither the direct, indirect or disconnected government model for organisation and interaction between public authorities and private service providers. One reason for this is that the Directive is primarily concerned with procedural principles for how contracts should be awarded and on what grounds. However, the descriptions of the different procedures for public procurement (Article 1, 11 (a)–(d)) gives the contracting authority the opportunity to restrict competition at an early stage and invite some, but not all, potential providers (economic operators) to submit a tender. Moreover, it is also specified that the character of the service in question may weigh in favour of dialogue or negotiations with selected potential providers. In this kind of dialogue or negotiation, we consider it to be possible to influence the allocation of discretionary power, which is a key element of the government models in Table 3.1. To what extent dialogue or negotiations are relevant is an empirical question in each case. Finally, the Directive allows exceptions to the rules on public procurements and defines cases in which the Directive does not go into effect. If a public authority chooses to make use of the exceptions to the rules or organise its production of welfare services in a way that is outside the scope of the Directive, then that authority has a great opportunity to influence the welfare mix. In other words, we will emphasise that the common European policy for public procurements does not prevent different ways of organising welfare services in EU member states.

The national welfare mix is thus also a question of political choice, will and cultural traditions, and the EU Directive makes it possible to take these aspects into account. The openness to diversity is reflected in the national policies and legal framework for private providers in Scandinavia, as well as in the fact that the three countries to some degree use their freedom of action differently. In general, their national regulations are more restrictive than what the EU Directive requires; for instance, by setting lower threshold amounts for when open calls for tenders are required.

The Norwegian authorities have raised the issue of the conditions for nonprofit actors—and the possibility of maintaining the exception to the rule for nonprofit actors—after the implementation of the revised Directive on public procurement. However, this appears to have been done without establishing whether alternative solutions for service production exist. The new Directive on concession contracts, the opportunity to set aside the regulations defined in the Directive, and common practice in Denmark and Sweden indicate that such alternatives do indeed exist. It appears that each individual country will still be able to use discretion in organising the welfare mix it considers the most appropriate, in light of its own cultural context. ¹¹ These national policies are the subject of the following sections.

Nonpublic Producers of Primary and Lower Secondary Education, ¹³

In this section, we summarise the national private school policies of the three Scandinavian countries, drawing on the analytical government models from Table 3.1: direct, indirect and disconnected government. Based on detailed analysis of national policy documents such as legislation, instructions, and guidelines (see Segaard 2015), we aim to identify some central similarities and differences in the distribution and coordination of ‘contracts’ in primary and lower secondary education in Denmark, Sweden and Norway.

The public sector traditionally plays the leading role in education in Norway, Denmark and Sweden. A common feature is that the great majority of children in primary and lower secondary education attend a municipal school. There are, however, some variations between the three countries regarding the distribution of children between public and private schools. According to Eurostat (2012, 33), 95.6 percent of Norwegian school children attend a public school, whereas the corresponding figures for Denmark and Sweden are 86.5 and 89.4 percent, respectively. Norway thus has a lower share of children in private schools than in either Denmark or Sweden.

The problem with these figures is that official statistics often do not distinguish between different categories of private schools, such as between for-profit and nonprofit schools. As we shall see, this distinction is crucial when education policies in the three countries are compared. In Sweden, private primary and lower secondary schools that receive public funding can be run on a commercial basis. This is not allowed in Norway and Denmark. Private schools in Sweden are basically fully financed by the public sector, and the schools are not allowed to charge school fees. That is not the case in Denmark and Norway, where private schools are only partly funded by the state. Danish and Norwegian private schools may thus charge school fees—and are in fact expected to do so. In both countries, it is also required that public funding be used exclusively for educational purposes. Moreover, in Denmark, private schools are by law required to be run by nonprofit institutions. It is obviously appealing to be a for-profit operator in the Swedish primary education system, where schools are fully financed by the public sector, profits can be paid out to owners, and the authorities have in practice no right to examine the operator’s accounts. In other words, Swedish for-profit school owners operate under much freer conditions in economic terms, but are somewhat more restricted in terms of educational content than in either Denmark or Norway.

In all three countries, primary and lower secondary schools fall under the jurisdiction of the municipalities, as the municipalities are obliged to offer education to all children in this age group. Nevertheless, private schooling of children in this age group is subject to an approval system at the national level. A state institution is responsible for approving private schools (the Norwegian Directorate for Education and Training, the Danish Ministry for Children, Education and Gender Equality, and the Swedish Schools Inspectorate). In primary and lower secondary education, nonpublic actors thus apply for the right to run schools, and a national public-sector body gives (or refuses) them this right. This can be regarded as a ‘service concession’ according to the EU Public Procurement Directive. As mentioned above, this means that the provider is given the right to provide services and runs a real risk in exploiting this right in practice. The argument is that the provider only receives a partial payment from the public-sector body, while the rest is paid by the users, who are free to choose whether they will use this service. Accordingly, we assume that private schools can be said to be outside of the scope of the EU Directive on public procurement. ¹⁴

Contracts for private schools with public funding are awarded on the basis of a national authorisation system in all three countries, which ensures that the schools adhere to national regulations of the organisation and educational content. By means of this approval system, we consider national authorities to exercise indirect government by defining requirements and conditions for approval. Moreover, this approval can be revoked if inspections show that the schools have not adhered to these requirements and conditions. Accordingly, interaction between the authorities and private service providers is formalised in an agreement, with more or less detailed criteria for approval. This indicates the extent of formality (cf. Table 3.1).

The extent of national control and discretion given to each actor—both the authorities and the provider—vary substantially between the three countries. The focus of the regulations also differs. Danish private schools appear to enjoy more discretion regarding educational content as well as the values on which they are based. A central element of Danish school policy is that educational content should correspond to the basic values of the school, and that potential users must be informed of this. We suppose that the approval of Danish private schools is to a large extent performed on their own terms. This is evident because the regulations emphasise that the schools should be able to define their own teaching content and methods based on their own basic values and distinctive characters. In Norway, and perhaps even more in Sweden, the national authorities set forth detailed standards for education. Private schools must comply with the standards set for public-sector schools. In other words, we consider national requirements for the content and organisation of teaching to be less strict in Denmark than in Norway and Sweden. Whereas public-sector schools can be perceived as setting a minimum standard for primary and lower secondary education, in Denmark, public-sector schools in Sweden and Norway can be viewed as a template which private schools must follow. The fact that a single act governs both public and private schools in Sweden illustrates this point. In Norway and Denmark, private schools that receive public funding are regulated by a separate act.

In order to obtain a diverse educational system, Danish authorities also give private schools considerable leeway. Danish private schools can reject applicants, even if they have room to admit more pupils. In this way, we believe that a school can cultivate its own distinctive image. The primary and lower secondary school system as a whole can thus become more diverse. In contrast, Swedish and Norwegian private schools generally cannot reject applicants if they have room to admit them. This can be seen as a way to secure free choice for users. In practice, the democratic right of users to free choice can thus undermine distinctive alternatives to public schools and thereby reduce diversity within welfare services that the authorities in principle aim for. This is because the lack of opportunity to reject pupils also curtails the exercise of discretion on the part of the provider.

Although some differences exist, the users’ right to free choice is a basic entitlement in Norwegian, Swedish and Danish primary and lower secondary education. In light of our analytical framework, this means that the indirect national government is supplemented by a form of disconnected government, because the market—the users, through their individual choices—takes part in shaping the educational system. However, the circumstances under which users can make an informed choice vary between the three countries, at least in terms of national regulations. Danish legislation and regulations, for instance, dictate that schools have a duty to inform users. The content of the information, as well as the channels through which information is conveyed, are fully outlined. Such regulations are largely absent in corresponding Norwegian and Swedish regulations.

Our opinion is that this statutory duty to inform users in Denmark highlights the importance of knowing which options to choose from and the consequences of each choice. Every choice certainly has consequences, especially with respect to the rights and obligations that pupils and their parents agree to accept. Denmark also stands out in this area. Parents of children in Danish private schools are given formal duties and the responsibility to participate in the running of the schools. A group of parents at a private school in question (called the ‘circle of parents’) is given a formal obligation to supervise the school. More generally, this aspect of what we call collaborative governance is evident in the Danish system for the supervision of private schools. Not only are the parents involved, but also the school itself can choose to assume an important role by means of self-evaluation. This is done on the basis of a template developed by a school association (a national organisation for private schools of a specific type, such as religious, German minority or Waldorf/Steiner education) and approved by the national Board of Supervision. The inclusion of parents and nonprofit organisations in supervising the schools is a striking example of how collaborative governance entails an aspect of self-regulation within a specific political and institutional framework at the national level (see Sørensen and Torfing 2008, 10). However, as Thøgersen points out in Chap.  5, there is little direct collaboration between nonprofit schools and the municipalities in which they are located. In other words, indirect government through collaborative governance seems to be limited to the relationship between the private service provider and national public authorities (e.g., through the national system for supervision). The Danish supervision system contrasts sharply with the Swedish system, where it is difficult to detect any form of collaborative governance. Swedish supervision is centralised and carried out by national authorities, and there is little involvement by users or parents. Users and parents may be involved in the Norwegian case, but they are not given any formal rights or obligations comparable to the Danish situation.

To conclude, the basic government model for nonpublic actors within primary and lower secondary education in all three countries appears to be indirect government. There are nevertheless substantial variations with regard to private service providers’ freedom to use their own discretion; therefore, the influence of such providers also varies widely. There are also elements of market-based government, where choices made by users determine the composition of the welfare mix. In Denmark, the arrangements for the supervision system also display strong elements of collaborative governance. In this sense, we presume that the government regime can be described as layered. However, the final authority rests with the national authorities who establish the national standards for approval and have the power to revoke this approval.

Nonpublic Producers of Institution-Based Elderly Care ¹⁵

In this section, we move on to policies on institution-based elderly care. Again, based on detailed analysis of national policy documents such as legislation, instructions, and guidelines and using the models from Table 3.1, we compare the three countries to show how contracts are awarded and coordinated in Denmark, Sweden and Norway.

There is a long tradition of public-sector elderly care in Scandinavian welfare states. The practice of elderly care has changed over time, for example, with regard to the balance between home-based and institution-based care. Likewise, attitudes towards the organisation of elderly care are gradually changing as well. For-profit providers of elderly care are no longer a distant possibility, but have become actual practice in many ‘marketised’ Scandinavian municipalities (Meagher and Szebehely 2012). Elderly care is a municipal responsibility, and each municipality decides how this task will be organised and carried out. The municipalities thus play a decisive role in shaping the welfare mix within elderly care (Ascoli and Ranci 2007). A nonpublic actor that wants to run a publicly financed nursing home is largely reliant on choices made by the municipality. This contrasts with schools, where municipalities have less influence over the welfare mix.

Unfortunately, comparable data on the welfare mix within elderly care in Scandinavia are scarce. Nevertheless, Marta Szebehely and Gabrielle Meagher (2012, 244-245) presented some estimates, and Karl Henrik Sivesind (2016; Chapter  2 in this book) described the changes in the welfare mix in Scandinavia based on different kinds of statistical data. ¹⁶ They all concluded that most care services are still provided by the public sector, but that there are some significant differences between each country: The nonprofit sector plays an important role in elderly care in Denmark and, to a minor extent, in Norway; whereas Sweden stands out as having a more extensive for-profit sector. In addition, in Sweden (and Finland), ‘the growth of its share has been faster and large corporations have a stronger position’, according to Szebehely and Meagher (2012, 242).

Individual municipalities usually enter into a contract with private service providers, but there are exceptions. In Denmark, a private care provider can bypass the municipality and obtain the right to provide institution-based care services through a national approval system for so-called ‘independent nursing homes’ (Danish: friplejeboliger). Under this system, a private provider of independent nursing homes acquires the right to offer a place to persons in need of nursing care. The provider must fulfil a number of predefined criteria in order to acquire this right. When the user’s need for care is assessed and warranted by the municipality, he or she can opt for a place in an independent nursing home. The municipality is then required to enter into a contract with the private provider. Accordingly, a Danish municipality cannot single-handedly decide the welfare mix within its boundaries. This arrangement resembles what we find in the school sector: National authorities define the criteria for being approved as a provider. We therefore state that indirect government also exists in elderly care—in this case, a service concession contract. On the basis of in-house case law, Danish municipalities can also enter into agreements with self-owning institutions, which are outside the scope of the Procurement Act and the EU Public Procurement Directive. They can also launch open calls for tenders on institution-based elderly care.

In both Norway and Sweden, the municipalities themselves choose how institution-based elderly care within their borders will be organised (Vabo 2012). In Sweden, a municipality can choose between implementing LOV (The Freedom of Choice Act), using open calls for tenders according to the LOU (Public Procurement Act), or utilising the freedom of action provided by the in-house case law; a Swedish municipality can also choose a combination of these. ¹⁷ However, Swedish national guidelines nevertheless encourage the use of LOV. ¹⁸ In short, this means that users can freely choose between service providers approved by the municipality. The municipality must approve all providers that satisfy the requirements, which are formulated by the municipality itself. The money then follows the patient.

Norwegian national policy documents encourage open calls for tenders, but leave room for restricted competition between nonprofit providers. Norwegian municipalities can also implement free user choice, but this choice is restricted to those providers that have entered into a contract with the municipality on the basis of a framework agreement or the ‘money follows the patient’ principle.

National policies on the organisation of elderly care and municipal freedom of action are just some of the aspects of our models of government. Another aspect is each actor’s discretionary power over the content of cooperation on elderly care. National authorities in all three countries express views on the requirements and conditions for entering into a contract. On the one hand, this includes formal procedures based on the EU Public Procurement Directive and adjacent national legislation. These are largely similar in the three countries. However, policy documents in Denmark—to a much greater extent than in the other two countries—stress that municipalities should find creative solutions. These documents emphasise that cooperation between public authorities and private providers can be organised according to a partnership model, rather than as a hierarchical customer–provider relationship (Udbudsportalen 2011, 16). We interpret this as a request for more collaborative governance.

On the other hand, national policies in all three countries also contain essential goals for elderly care. The emphasis on values such as self-determination, dignity and respect for the individual user, which supports the overall aim of active citizenship in welfare services through empowerment and the free choice of the user, constitutes a basic similarity between the three countries. There is nevertheless considerable variation when these values are translated into concrete regulations; that is to say, into ‘tools of government’. The extent of discretionary power that rests with the provider clearly varies. In Sweden, so-called ‘national evaluation’ criteria include very detailed indicators, which are used as a starting point for national supervision of municipal care. National authorities also recommend that municipalities use these indicators in their supervision and specification of requirements for private providers.

All three countries have systems for the national supervision of institution-based care, covering all types of providers—public as well as private. The purpose is to ensure that care is carried out in accordance with legislation and other national regulations. This type of national supervision is supplemented by tasks that are assigned to municipalities and providers. The providers, for example, are required to have internal control systems.

The major difference between the countries is the role of the users and their relatives in supervision. Swedish national guidelines seem to devote less attention to these user groups as active citizens than do their Danish and Norwegian counterparts. National authorities in Sweden put much less emphasis on the institutionalised influence, participation and empowerment of users (e.g., user boards). Instead, Swedish guidelines tend to focus on informal day-to-day influence: for example, on the daily routines in nursing homes. Furthermore, there are no concrete recommendations on providing information to users, even though this topic has received considerable attention in many of the reports issued by Swedish national authorities. Only Danish municipalities and providers have a statutory obligation to inform potential users. Norwegian guidelines emphasise user involvement, but little is said about the information on which this involvement should be based. Norwegian municipalities are not obliged to provide easy access to relevant information in a way comparable to Danish requirements.

Generally speaking, we find that Scandinavian national authorities do not lay down clear regulations on the organisation of elderly care or the conditions for private providers. Thus, on the one hand, municipalities have considerable leeway in determining the welfare mix. On the other hand, national authorities express quite detailed expectations through legislation, regulations and supervision. In the case of Norway, Signy Vabo found that national steering of elderly care has increased over time. However, this steering focuses on processes instead of content or results. The increased steering is relatively ‘soft’ and does not interfere in any major way with municipal priorities (Vabo 2012, 122). This indicates a relatively large degree of discretion.

In light of the analytical models listed in Table 3.1, we assume several options to be available for the organisation of public–private collaboration on elderly care in the three countries. First, Danish and Swedish municipalities can practise direct government on the basis of in-house case law. Second, municipalities can practise indirect government through specifications in their call for tenders (all countries) and LOV announcements (Sweden). Third, Danish users (and Norwegian and Swedish users, if their municipalities allow it) can also exercise influence by choosing from among the approved providers. ¹⁹ In this respect, there is also an element of market-based organisation in the governing of elderly care.

In our discussion of the analytical framework, we pointed out that the use of different models of government within a single policy area can be described as layered government , meaning that the welfare mix is organised through several steps. In both Denmark and Sweden (but less so in Norway), the national authorities encourage municipalities to facilitate the free choice of users between pre-selected service providers. In this way, the idea of market-based organisation is combined with elements of direct or indirect government: The public sector facilitates consumer empowerment by means of contracts with or the approval of certain service providers. However, the organisation of areas of welfare service may also reflect parallel government regimes. That is to say, we find that national policy allows welfare mix to be organised in several distinct ways, implying that private service providers may have more than one alternative to become providers of publicly funded welfare services. This is seen in the Danish case, where private providers of independent nursing homes can be approved at the national level—bypassing the municipalities—and then enter the municipal welfare mix through user choice. This is also seen in Sweden, where it can be argued that the LOV has created parallel systems. Furthermore, private providers find yet another way into the municipal welfare mix in Denmark and Sweden: The municipality can enter into an agreement with a private provider based on the criterion of contracting entity and the criterion of control. This can be described as an extended form of in-house service production. Here, public authorities can supervise the private providers on equal terms with municipal providers.