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Is there a level playing field in the Dutch market for reintegration services?
If not, what are the causes, what can be done about that and what would that bring in terms of outcomes?
This is the focus of a report that Magazijn13 prepared for the association of re-integration service providers in the Netherlands (Boaborea). The report answers the fist question with a clear: NO! Dutch local governments shelter their affiliated providers from market competition. In terms of legislation there is some scope for this but in terms of job placement outcomes and efficient service delivery there are grave doubts wether this is the optimal strategy. Municipalities who have contracted their affiliated providers for placement services tend to have higher costs and poorer outcomes than municipalities who have contracted a private service provider via competitive tendering. The report looks into the outcomes and costs from national statistics and more specific from 9 selected municipalities in the Netherlands to come to this conclusion.
Municipalities have a financial stake in compensating their affiliated providers - who traditionally are responsible for organizing sheltered work for those who cannot work in a regular environment - with contracts for placement services. This is because local governments at the end of the day are financially responsible for deficits that occur from these affiliated providers operations.
With the spending cuts the cabinet has announced for the near future, these deficits will become an increasing burden on local government budgets. The situation therefore will further deteriorate. The report calls for clear choices: central government must ensure that the incentives in various Acts are more consistent, municipalities should make their financial linkages with affiliated providers more transparent, and these affiated provider should focus more on their core capacities in stead of further diversifying towards activities where provate providers are more skilled in.
The report is in Dutch language and can be downloaded here.