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Finnish government launches regional digitisation plan

Finland’s government allocates €400m to support digital projects run by the country’s local authorities

Finland has made rapid strides to digitise a broad range of government services, with the aim of developing an advanced e-government infrastructure for an increasingly digitally smart economy.

The expanding functionality of the portal, which serves as a one-stop service shop for citizens, underlines the Finnish government’s ambitions. While Helsinki continues to be invested with e-government initiatives, the next major IT focus for Finland will be healthcare, local government and regional administration.

For example, the government has allocated more than €400m, including direct capital funding and regional grants, to support various digital projects being run by the country’s local authorities between 2018 and 2022.

The investment is linked to the government’s Digital Finland Framework, which aims to maximise both future opportunities, based on global megatrends, and Finnish expertise in specialised IT sectors. The indigenous quality of this strategy is designed to encourage more IT firms to invest in commercialising their innovations and digitising their offerings for both domestic and export markets.

The public sector ICT department within the ministry of finance is tasked with digitising Finland’s public services. It is collaborating with local governments to develop new and consistent operating practices and public services that are user-oriented and fundamentally digital. The objective is to create an agreed framework between central government and municipalities covering the digitisation of all public services.

The planned regional digitisation process will require new information management legislation and the establishment of a one-stop-shop service system. The government plans to have laws in place to support this during the second half of 2019.

Under the legislation, state governing branches and municipalities will be committed to reforming internal administrative processes to promote a user-based approach. Municipalities will also launch projects to increase public sector productivity and pave the way for greater streamlining of public services.

This will include the use of spatial data in services and supervision will be scaled up, as will the development of automated financial management processes, procurement activities and reporting systems.

Smart Economy project

The digitisation of municipal administration and front-line healthcare infrastructure will form an essential part of the government-led Smart Economy project. The initiative is intended to ensure the availability of public funding and capital investments for digital transformation schemes.

The Finnish Research and Innovation Council (FRIC), with oversight from the prime minister’s office, was established to oversee the government’s national digital strategy. The FRIC expects public and private sector investments in research and innovation to reach 4% of Finland’s GDP by 2025. The council’s immediate goal is to stimulate digital innovation and expertise in a number of key areas, including smart mobility, smart healthcare, smart energy, artificial intelligence and the platform economy. 

Municipal digitisation is an integral part of the centre-right government’s Social, Healthcare and Regional Government Reform (SHRGR), which aims to reorganise local government administration, reduce the number of municipalities and consolidate the delivery of healthcare services to so-called “super” medical centres in Finland.

The logistical challenge of the SHRGR is increased by a number of important parallel projects. Among these is a plan to transfer more than 220,000 personnel employed by central government agencies to the payrolls of local municipalities by 2020. About 90% of those affected will be doctors, nurses and social workers.

“The reform has multiple aspects,” said Anu Vehviläinen, Finland’s local government and public reform minister. “It will revolutionise how public services are delivered in Finland. A strong IT infrastructure plan, and digital base, will become vital components of a successful reform as we go forward with this process. The cost savings to be gained are expected to be substantial.”

The government has used the cost advantages of digitisation within interconnected centralised public administration structures as an underlying argument to support its regional and healthcare reform. Digitisation is seen as one of the main pillars of the reform, and a means to accelerate the transition from a high-cost public services infrastructure to delivery by more cost-efficient and transparent front-line local council, healthcare and education services.    

Cost savings questioned

But not all legislators are convinced by the government’s cost-reduction argument. Some National Coalition Party (NCP) MPs have questioned official cost-saving calculations within the reform programme’s core funding model. As the biggest of the three government partners, the NCP’s unconditional support for the SHRGR is seen as essential if the initiative is to succeed.

“We expect all NCP MPs to fully support the reform,” said NCP chairman Kalle Jokinen. “We also believe that digitisation will bring gains by not only enhancing the overall communications infrastructure, but also by adding real value in the delivery of services with increased cost-efficiency.”

Municipal leaders are also questioning the scope of the SHRGR, which is being drafted by the ministry of employment and the economy. The reform, which the government hopes to implement in 2020, aims to create 18 “super” regional administrative councils.

The government insists that the initiative will help to simplify Finland’s regional administrative systems and reduce bureaucracy in the regions.

But local government chiefs fear the reform will eventually lead to a more centralised decision-making process on important operational matters. Finland’s biggest municipalities, including Helsinki, want more independence to raise taxes and attract new business and investment ventures.

The fears expressed by municipal leaders are grounded in the government’s long-term goal to use the flagship reform plan to inject more centralised planning and budgeting into the running of local councils.

The division, reorganisation and centralisation of Finland’s traditional regionally based local government infrastructure is certain to create other challenges that digital technology can help to resolve.

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