The Impact of FineCo? (2008:16)

Since 2004, the Swedish Agency for Public Management has been commissioned by the Swedish Government to follow up and evaluate financial coordination under the Act on Financial Coordination of Rehabilitation Measures (2003:1210), known as "FineCo" (Finsam). The Act regulates financial coordination of rehabilitation measures between the Social Insurance Agency, the Swedish Public Employment Service (PES), municipalities and county councils — termed ‘coordination partners’ below. The measures are intended to relate to individuals who are in need of coordinated rehabilitation measures, and their purpose is to enable these individuals to attain or improve their capacity to engage in gainful employment.

Within the framework of this assignment, the Agency for Public Management has previously published four reports that have elucidated various aspects of FineCo. In this concluding report, the Agency gives a final account of its impact analysis.

The question mark in the title of this report, The Impact of ‘FineCo’?, refers to the fact that it has not been possible to ascertain the effects of the FineCo initiative. The preconditions for implementing a full evaluation of its impact have been lacking, owing both to general methodological problems associated with evaluating rehabilitation in general and to more specific problems relating to basic data about FineCo in particular. The Social Insurance Agency, the Swedish Public Employment Service (PES) and the National Board of Health and Welfare (NBHW) were instructed by the Government to develop a ‘national system for monitoring of coordination in the area of rehabilitation’ (SUS ) and to provide assistance in the form of documentation that the Agency for Public Management needed in order to fulfil its assignment. However, SUS has not functioned in the manner intended, and this has resulted in major gaps in the system and severe quality problems as well.

Instead, the Agency for Public Management has obtained documentation for its analysis by conducting a follow-up survey by means of telephone interviews with a limited selection of FineCo participants. The interview responses have been supplemented by register data about the participants from Statistics Sweden, the Social Insurance Agency and PES.

Below, the Agency for Public Management summarises its principal conclusions and observations from the follow-up study.

Has the participants’ ability to engage in gainful employment improved or been restored?

The gainful employment rate of participants in FineCo measures has risen. Altogether, 35% of them were gainfully employed on the follow-up occasion, and this represents a rise of at least 15 percentage points. Those who had taken up employment were, broadly speaking, working full-time. How far this increase in the gainful employment rate was due to the FineCo measures is impossible to ascertain, since the possible impact of the measures cannot be isolated from other factors affecting employment.

The rise in the employment rate was matched by a decrease of roughly equal size in the proportion of jobseekers. The overall share of sick participants, on the other hand, changed only marginally in comparison with the period before FineCo. 

What do the individuals concerned think of their participation in FineCo?

An overwhelming majority of participants considered that FineCo was good, and more than half thought that the initiative had improved their life situation. The majority of those who had previously participated in measures within the coordination partners’ regular activities considered that the support they received within the scope of FineCo was better than the previous measures. However, the participants’ assessment of the FineCo measures was not always based on concrete improvements. The share of participants stating in their replies that their health and work capacity benefited from the measures was considerably lower than the share who expressed a favourable attitude towards FineCo.

Are the participants’ rehabilitation needs met better in FineCo?

Improvements have taken place, but the question remains of whether rehabilitation in FineCo is more effective for the target group than other rehabilitation. One observation that should be regarded as significant is that individuals who had been in need of public financial assistance for several years before their participation in FineCo measures were gainfully employed on a substantially larger scale on the follow-up date than they had been during the preceding period.

The conclusion of the Agency for Public Management is that far from all the individuals in the telephone survey had a weak position on the labour market. From the information available, some participants appear to have had a relatively good work capacity at the outset. This finding does not entirely correspond to the purpose of FineCo measures that its participants should attain or improve their work capacity.

According to the Agency, FineCo measures should be reserved to groups whose rehabilitation needs cannot be met otherwise. If fully adequate rehabilitation options are available in regular activities or through other forms of rehabilitation cooperation, individuals should primarily be offered these measures. FineCo measures should thus address the target group whose needs call for collaboration among the FineCo partners. Offering FineCo measures to individuals who can get their needs met within the partners’ regular activities or through other forms of cooperation is not resource-efficient.

What are the economic effects of FineCo?

The structure of FineCo makes it difficult to study financial flows from and between different welfare systems. This is due to several factors, such as an annual government grant without national control; the absence of systematic economic monitoring at national level; partial financing of rehabilitation measures in conjunction with the coordination partners’ regular activities; and budgeted funds carried forward from one calendar year to the next. For these reasons, it is difficult to obtain a grasp of how much the FineCo measures have cost.

An analysis of the economic impact of FineCo requires detailed information about individuals’ means of support before and after their participation. Owing to time lags in various registers and inadequate data about which individuals have taken part in FineCo, it has not been possible for the Agency for Public Management to ascertain the economic effects of FineCo.

In its analysis of economic impact, the Agency’s starting point was registered data concerning people whose participation in FineCo measures ended not later than in spring 2006. These data are not representative of FineCo in its entirety, and therefore afford no general answers to the question of what the cost trends for different sources of financial support have been.

In the limited material analysed by the Agency, the trend of costs for different forms of financial compensation vary widely among various types of measure. This means that the outcomes for the FineCo partners also show marked divergence, depending on the orientation of their measures. Following certain measures, for example, municipalities have made savings, while after other measures their costs have risen. The same applies to the central government.

Variations in outcome for the partners should be of interest when the coordinating associations choose target groups for their various measures. It is advisable to consider whether the target group for FineCo should be more restricted than at present. This applies particularly if one of the current objectives of FineCo is to be retained: that of reducing the central government’s costs of sickness benefit by an amount that should then finance its grants for FineCo.