If the welfare regions do not make savings, the health and social care expenses threaten to grow considerably more than what has been prepared for.
Social security expenses can at worst grow well beyond the funding that the government has prepared for. The Ministry of Finance (MoF) has made a calculation according to which, for example, in 2026, expenditures would exceed funding by 1.6 billion euros, if costs cannot be curbed in the regions.
With the so-called framework reservation, the government has prepared for the fact that the annual ex-post checks included in the financing of the welfare areas will indeed be larger than planned. For example, the provision for the year 2026 is 437 million euros, which means that it would not be enough to cover the need for money if the costs were to rise according to the calculation.
The calculation is not a forecast, but has been made considering a situation in which the welfare regions would not make their own adaptation measures at all. Expenditure pressure therefore describes the development of salaries and other expenditure items, if nothing were to be done.
Welfare areas head of the control department Ville-Veikko Ahonen from the Ministry of Finance says that it considers the expenditure development according to the calculation to be very unlikely. Plans for savings have already been made extensively in welfare areas. In many areas, for example, there are plans to close down health centers and reduce round-the-clock care for the elderly.
The financial planning of welfare regions is guided by the rule that they must cover the deficits they have incurred. In other words, according to the law, the results of the regions should turn into surpluses in the coming years, and thus the need for additional money should be avoided.
“There wouldn’t even be personnel in the regions for the development according to this spending pressure, that is, as far as that is concerned, it is a very theoretical calculation. The regions have started to take balancing measures, and on the other hand, the government has also reacted to this economic situation,” says Ahonen.
The government has decided on several job cuts in welfare areas. In the framework crisis in April, the government decided among other things, it extends the treatment guarantee for primary healthcare to three months, and at the same time it reduces the funding of the regions by 130 million euros.
Social and healthcare funding this year is 24.1 billion euros. However, the realized expenses will be detailed at the stage when the final accounting information of the welfare areas is detailed. Based on them, the ex-post check is calculated.
In the expenditure pressure calculation, this year’s expenditures would increase to 25.8 billion euros at worst, i.e. 1.7 billion euros more than the planned funding.
So is there a risk that it will turn out afterwards that such a pot of money will be paid to the state?
“I don’t think it’s likely that the economy will drift into this career. But there is a risk that the welfare regions will not stay in their current budget career. The picture of the situation is that all areas are struggling with costs, especially the use of temporary labor is really difficult to curb, and the salary solution for social security personnel continues to increase costs a lot,” says Ahonen.
According to Ahonen, keeping costs at the planned level requires a reaction from the regions if this year’s economy starts to develop in a worse direction than expected. Then they have to look for new savings targets.
In addition, according to Ahonen, the economic situation demands that the regions actually implement the savings that the government has decided on. This applies, for example, to the government’s decision to increase the maximum amount of customer fees for specialized medical care. The decision cut the regional funding by 100 million. So this money is gone from the regions, whether they decided to raise customer fees or not.
According to Ahonen, the savings plans made by the regions are in the right direction from an economic point of view.
“Now all that is needed is quite strong executive ability from the regions, so that the savings are actually realized. And also the ability to react, if the measures don’t work, then you have to look for replacement measures.”
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