Netherlands Government Sector
Introduction The Netherlands
The Netherlands has a long and rich history as far as private initiatives are concerned, and as a result of this, so does the Dutch third sector. Nowadays, it is relatively the largest third sector of the world, with more than 12% of all the non-agricultural jobs. (Salamon, Anheier, List, Toepler, & Wojciech Sokolowski, 1999)
Government in the Netherlands is divided in several different layers, starting at the national level with the Prime Minister, his Secretaries and all the accompanying officialdom. According to the principle of subsidiarity, matters are taken care of at a level as local and decentralised as possible. The largest local governmental body is the province with its elected delegates, and after that comes the city level, with the mayor and the city council and its executive body.
The third sector is inevitably intertwined with government, and the importance of the principle of subsidiarity only enhances this. It is said that the Netherlands have a tradition of “private delivery and public funding” (Burger, Dekker, Toepler, Anheier, & Salamon, 1999) which means that government provides the necessary money to finance projects, but that the provision of services is actually in the hands of private organisations. The non-profit sector in The Netherlands goes further than just social welfare services; other activities are seen in culture, leisure, environment etc.
In this report parts of two different branches of third sector activity in the Netherlands will be focused on. Within the frame of Dutch health care there will be specific attention for a system called “Thuiszorg”, which provides amongst other things care at home for the elderly and maternity care. The second group of organisations that will be discussed are social housing associations, which provide safe and affordable housing.
Third sector in the Netherlands
Terminology
The third sector in the Netherlands is hard to define. Whereas in countries such as the United Kingdom the sector can somehow be seen as an entity, this is not the case in the Netherlands. It should be seen more as a category of different organisations, with more emphasis on the specific field that an organisation is active in than on the notion of one single sector. (Brandsen & Van der Donk, 2005)
As a result of this, the terminology that is used in literature varies considerably. The three main terms that are used in the Netherlands are particulier initiatief, maatschappelijk middenveld en maatschappelijk ondernemerschap. These terms tend to refer to particular types of groups or organisations within the third sector. (Brandsen & Van der Donk, 2005)
Particulier initiatief (‘private initiative') is the oldest term, and is traditionally used to describe groups of citizens getting together on a voluntary basis to work for a collective purpose. The second term, maatschappelijk middenveld or ‘societal midfield' is used to refer to the part of the third sector that is organised in institutions. Maatschappelijk ondernemerschap (‘social entrepreneurship') is currently mostly used. This term is on occasions also used in a broader context, as it is sometimes also used to refer to organisations between market and State, and not only to organisations between citizens and State. (Brandsen & Van der Donk, 2005)
These are definitely not the only terms in use, and some of the others can lead to some confusion, as they are not necessarily exclusively used to describe what is commonly known as the third sector. An example of this is the term ‘non-profit sector', which can be found on quite a few occasions in the literature as well.
History
The third sector in the Netherlands has an exceptionally rich tradition and history, going back as much as almost two centuries. In the nineteenth century it was basically taboo for government to interfere in the lives of individual citizens, due to the dominant liberal climate at the time. Yet the majority of the 4 million inhabitants of the country was suffering from poverty, hunger and disease. In response to this situation countless private initiatives arose in the form of charity and poor relief. These organisations were funded by the richer part of society, based on the desire ‘to do good'. Over the years many organisations were created, in many different fields, such as health care, education, care of the weak and later youth club and community centre work. (Veldheer & Burger, 1999) At a (much) later stage government started to get somewhat involved, but this remained limited to a financial role, by providing subsidies.
By the end of the nineteenth century, many of the private initiatives had started to transform into an organised system of public health care; the third sector played a key role in the process of the Netherlands becoming a welfare state. (Van Elteren, Kunneman, & Rozing, 2006) In the second half of the twentieth century the phenomenon of ‘pillarisation' brought a new influence into the development of the Dutch third sector: At this time many of these organisations were based on an ideology, the most common ones being Protestantism, Catholicism and, in later years, Socialism. This meant that i.e. Catholics would read a Catholic newspaper, choose Catholic schools for their children etc. This gave a new impulse to the private initiatives that formed the third sector. (Brandsen & Van der Donk, 2005) Eventually, after the ideological conflict of mid-twentieth century had disappeared, it ended up becoming the ‘preferred supplier of public services'. (Brandsen & Van der Donk, 2005)
The role of the State throughout all of this has been very limited; the state restricted its own role to financing the services that were provided by the third sector. (Burger, Dekker, Toepler, Anheier, & Salamon, 1999) In addition, throughout time the Dutch political climate has been very positive, encouraging even, towards the third sector. For starters there are very few regulations and constraints (there are some, but they are mostly regarding internal structure of organisations, and not regarding organisations' objectives). A second circumstance that has made the Dutch third sector flourish is the fact that non-profit organisations are basically exempted from taxation. (Brandsen & Van der Donk, 2005)
Structure
The third sector in the Netherlands is the largest of the world in relative terms: it accounted for no less than 27.9% of service employment in 1995, with 652,800 employees. (Burger, Dekker, Toepler, Anheier, & Salamon, 1999)
Its size is not the only factor that makes the Dutch third sector unique: unlike in other Western European countries, the third sector in the Netherlands is clearly dominated by health care, as 41.8% of all the non-profit employment is in the health sector; the Western European average for this is 22%. The second largest part of the third sector is education, with 27.8% of the total amount.
Composition of the nonprofit sector, the Netherlands, Western
Europe, and 22-country average, 1995
(Burger, Dekker, Toepler, Anheier, & Salamon, 1999)
Overall it can be said that the traditional welfare services obviously dominate the third sector, with approximately 90% of the paid employees working in the fields of health, education and social services. (Burger, Dekker, Toepler, Anheier, & Salamon, 1999)
When one looks at the ratio between paid employees and volunteers, the conclusion is that the welfare services depend largely on paid staff, whereas other fields such as culture and environment count larger numbers of volunteers.
The third sector in the Netherlands gets a large majority of its revenue from the government. This is slightly different from third sectors in other countries, where a relatively bigger part of the finances is brought in through philantrophy and the payment of fees by civilians. (Burger, Dekker, Toepler, Anheier, & Salamon, 1999)
cal government
The government in the Netherlands consists of three layers: one on a national level and two local levels. The national level is the central government in The Hague that handles matters of national interest.
The first local level of government is formed by the twelve Dutch provinces. Tasks of the provinces involve energy supply, spatial planning, environmental management, social work, sport and cultural affairs. (Dutch Ministry of Foreign Affairs) Each province has a Queen's Commissioner, a provincial executive power and a provincial council.
The second local level consists of the municipalities, around 450 altogether, although this number is declining slowly but surely as a result of ongoing local government rearrangements in an attempt to improve quality and effectiveness. The responsibilities of municipalities are found in fields such as traffic, housing, social services, health care, water supply etc. (Dutch Ministry of Foreign Affairs)
Both provinces and municipalities get their finances form two types of income. These two types are local taxes on one hand, and central government funding on the other. The largest part of central government funding comes in the form of so-called special-purpose grants, for which central government enforces how the money should be spent. (Dutch Ministry of Foreign Affairs)
In addition to the three regular levels of government in the Netherlands, there are also the water boards, which are the oldest democratic institutions of the nation. Their task is to protect the land against the water. (Dutch Ministry of Foreign Affairs)
Thuiszorg
Thuiszorg (home care) is an organization, which provides a broad range of services. These services are available for all people in society, without distinction based on age, sex, religion and background.
[…]
History
The majority of home care organisations go back a very long time, many of them as much as 130 years. From 1872 (the introduction of an important Law on Contageous Disease) on a large part of medical care in the Netherlands was taken care of by private initiatives known as cross organisations (the Green Cross, the White Cross, the White and Green Cross, the White-Yellow Cross and the Orange-Green Cross). (Veldheer & Burger, 1999) These organisations took over municipalities' obligation to prevent and suppress the many contageous diseases that were present. This task later expanded to individual care for the sick, maternity care at home and many more. After the Second World War the cross associations slowly started to change into the modern home care organisations. In the 1960's they played an important role in the process of the Netherlands becoming a welfare state and the depillarisation. (Van Elteren, Kunneman, & Rozing, 2006) Through the years the organisations got more and more closely related to the state as far as policy goes. (Veldheer & Burger, 1999)
Structure
Finances
Who pays for the care depends directly on the type of care a person gets. A large part of the expenses for services that are provided by Thuiszorg is being paid by the central government. This system is called ‘Care and Welfare' (Zorg en Welzijn). It consists of several laws: the Law on Social Assistance (WMO, Wet Maatschappelijke Ondersteuning), which came into effect on 1 January 2007, the Law on Health Insurance (ZVW, Zorgverzekeringswet) and the Universal Law on Special Medical Expenses (AWBZ, Algemene Wet Bijzondere Ziektekosten). (Ministerie Volksgezondheid, Wetenschap en Sport; Vereniging van Nederlandse Gemeenten) Most home care services are financed by the AWBZ; since 1 January 2007 domestic care is part of the WMO. Not everything is financed by the government however; there is the exception of maternity and baby care, which is covered by a person's regular health insurance. In addition, people have to pay a contribution themselves as well. (Ministerie Volksgezondheid, Wetenschap en Sport)
The AWBZ can be seen as a collective insurance by the state for every Dutch citizen against so-called ‘uninsurable risks' such as long-term illness, handicap or old age. It covers costs that are not covered by the regular health insurance that every citizen should have individually. (Ministerie Volksgezondheid, Wetenschap en Sport; Vereniging van Nederlandse Gemeenten)
WMO is still quite new, and it gives municipalities a lot more freedom as far as their policy is concerned. As a result of this the municipalities can decide for themselves who has a right to professional domestic care and who doesn't. Another thing that municipalities can decide about now is whether clients that reach a certain income level have to pay for a small part of the care they receive themselves. (Ministerie van Volksgezondheid, Wetenschap en Sport, 2008)
Legislation
There is an obvious connection between the Dutch government and the home care organisations as public service providers. The central government has drawn up numerous policies to provide guidelines as to how a certain public service has to be delivered. Not only are these different for the many different fields in which the third sector is active as far as public service delivery is concerned, they are also different for the underlying levels. For instance, there are different directives for health care as well as for education and social services. On the level of health care there are again many sublevels that each have their own legislation and programs, such as hospitals, nursing homes, homes for the elderly, home care etc. And from that level on there often are more subdivisions. Most of the directives are quite specific as far as their content is concerned, and it would be too much detail to go into that in this report.
Besides the majority of home care that is arranged in traditional ways, there is a new development where care is contracted out by the traditional care providers to third parties. One has to keep in mind, though, that this construction is only used in about 10% of the whole home care system. The development is that some home care providers that are traditionally foundations change to another legal form, which allows them to create profit. This combined with the fact that new legislation to some extent allows aspects of a free market, has caused some change. The Nederlandse Zorgautoriteit (NZa, Dutch Health Care Authority) has done research in this field, in order to get a clearer view on the situation. Previous reports had shown signals that this new marketsystem could create a risk for the interest of the clients as far as quality, availability and affordability of home care. After their research the NZa has come to the following conclusions:
- Finances in the home care sector are not structurally being used for other than the intended purposes although there is a lot of freedom in this field;
- Contracting out home care is legal;
- It is legal for home care providers to make a profit;
- The market is quite nontransparent; (Nederlandse Zorgautoriteit, 2007)
- Too little improvement is seen by the clients. (KNMG, 2007)
As a result of this research the NZa has taken measures to improve transparency and to secure quality, availability and affordability by sharpening the rules on how to use the financial resources. (Nederlandse Zorgautoriteit, 2007)
How it works
The home care system works as follows: first of all people have to decide what kind of care they need; if they are looking to get domestic care they have to make an appeal to the WMO, and from then on the decision is in the hands of the municipality. If people are looking for a kind of home care that is covered by the AWBZ they have to go to the Centrum Indicatiestelling Zorg (CIZ, Center for the Indication of Care). The government has created this as an independent organ that assesses people's need for care. Once one gets an indication for care from the CIZ, patients have to choose between care in kind that is arranged for them, and the so-called persoonsgebonden budget (PGB, personal budget). People can use this money to choose and buy their care from their provider of choice. (Ministerie van Volksgezondheid, Wetenschap en Sport, 2008)
Control system
In order to guarantee a certain level of quality, the central government has created the Inspectie voor de Gezondheidszorg (IGZ, Inspection for Health Care). The inspection does research on the quality of provided health services and publishes numerous reports every year. Many of its reports are about specific health care institutions that have been the subject of research by the IGZ. It functions as an advisor for political actors, and to contribute to ‘verantwoorde' care it uses advice, stimulation, coercion and force towards health service providers. The IGZ oversees the entire health sector, which the home care system is a part of. (Inspectie voor de Gezondheidszorg)
Current Problems / Challenges
At the moment there are a few different problems that the home care sector is facing. First of all there are the problems that have been caused by the introduction of the WMO. This new law has created a change in who decides what kind of home care a client is entitles to, in other words a client's indication. In the new system this is done by CIZ. This institution often does not go further than a phone call in order to determine a person's state and abilities. Especially for elderly people this creates great trouble, as for them a single phone call tends to be not the right way to establish a realistic view of their situation. As a result many elderly do not get the indication for the care that they really need, but far less than that. (NOS Journaal, 2007, Zembla, 2007) A possible solution for this problem can be seen in the approach of the Dutch municipality of Sluis. There the indication is not contracted out to the CIZ, but the municipality keeps it in its own hands. It is made sure that clients in need of an indication always get a visit by a qualified doctor, with the result that the image that is created is a lot more realistic than when only a phone call is made. (ZorgVisie, 2007)
The second problem is not limited to the home care system in particular, but basically affects the entire Dutch health care sector. In the past few years the third sector organisations that function as public service provider have been forced to start working to some extent according to free market principles, this goes especially for hospitals. The result of this is that the quality and availability of health care have gone down, costs have gone up and the amount of bureaucracy increased.
Role of the European Union
European legislation
So far, there is no actual European legislation on the third sector. There have been attempts in the past to begin to establish some Community law regarding this topic, but that has only resulted in a certain level of awareness of the third sector, and of its importance in society. (Kendall, 2005)
There are several reasons why it makes sense that the attempt to create European law failed. First of all, in many European countries the third sector's activities are part of particular fields that are linked closely to what's the essence of welfare states, particularly health care, social care and education. There has been a tight relationship between organisations providing these welfare services and government for a long period of time, and as a result of that political actors on a national level had ensured that there would be no authority on a European level to interfere with this potential field of policy. (Kendall, 2005)
A second reason for the failed attempt is that there seems to be no support for communal legislation on EU level. There are some exceptions to this rule in some fields, especially in the field of overseas development. But in general the electorates of different countries don't seem to see much reason for EU laws for the third sector. (Kendall, 2005)
Third, from the available literature on the topic it becomes abundantly clear that there is no general, transnational agreement on what exactly the third sector is (Brandsen & Van der Donk, 2005; Daly, 2004; Kendall, 2005). In addition the different member states use different terminology and have different kinds of organisations in place that form the third sector. As a result of this it would be extremely problematic to create legislation that would apply to all the different organisations in all member states. (Kendall, 2005)
There are however also some arguments that all together show that EU law on third sector activity could actually be a real possibility and that it could contribute to an improved third sector. (Kendall, 2005) The first factor mentioned in literature is that the third sector was already on the European agenda before, in the 1980's and 1990's and the result of that is a reference point for anyone interested at present time or in the future. This reference point consists amongst other things of a proposal for a European Associations Statute, Declarations with the Treaties of Maastricht and Amsterdam, and a Communication from 1997 with the suggestion that there is a general need to support ‘role for associations and foundations in Europe' and to promote ‘civil dialogue' (European Commission, 1997; Kendall, 2005).
Another factor is the existence of a certain piece of jurisprudence in which the European Court of Justice had to decide whether it was legal for a Member State to give privileges to non-profit organisations over for-profit organisations in social services, viewed from the perspective of European competition laws. Even though this was just one specific case, there are people pointing to the possibility of competition laws being applied inappropriately to third sector organisations with the role of public service provider. In order to organise this properly European legislation is potentially very useful. (Kendall, 2005)
A third factor is the current lack of regulations concerning the third sector organisations' position as far as the EU labour market goes as well as fiscal policy. European laws for the third sector could decrease several kinds of discrimination in the sector, such as ageism. (Kendall, 2005)
At this point it is uncertain what will happen in the future as far as European law for the third sector is concerned, but it is clear that the sector could benefit from such legislation. The 2004 White Paper on Services of General Interests do however show the European Commission's intention to look at the topic again in the foreseeable future. (Wilbert & Van den Dungen, 2004)
Working relationship between the EU and the third sector
Even though there is no legislation for the third sector on a European level and even though generally speaking third sector organisations don't show too much enthusiasm in their reaction to the possibility of such laws, there is most definitely a real working relationship between the third sector and the EU. This working relationship is however more or less limited to NGOs that occupy themselves with development aid, as those organisations (Red Cross, Oxfam, Médecins sans Frontières) play a fundamental role in delivering EU financial aid in countries all over the world. (Daly, 2004)
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