STOCKHOLM Feb 24 Sweden's Social Democrats, the
largest party in the government, will push forward with a plan
to cap private companies' profits in the tax-funded welfare
sector, Prime Minister Stefan Lofven said on Friday.
The minority centre-left government has promised stricter
regulation after reports of abuse in care homes and pupils shut
out of bankrupt schools. Rich pickings for firms offering
housing for asylum seekers have also provoked widespread anger.
Short of parliamentary support for a general cap, Lofven
said a first step might be in education, where the opposition
has also expressed concern about profit-taking.
"We want to limit profit in the whole welfare sector - that
includes schools, healthcare, and elderly care," Lofven told
"As a government, we have to have a practical approach and
ask ourselves how do we get a majority for our policy in
Sweden was a trailblazer of deregulation in the health and
education sector in 1990s, but many Swedes are now worried that
public services have deteriorated while taxpayers are directly
funding shareholder payouts by businesses.
In November last year, a government commission suggested a
cap on the operating profit of tax-funded welfare firms in
relation to their working capital of 7 percentage points plus
the risk-free rate.
However, the study has been widely criticised and the
centre-right opposition has said they would vote against such a
proposal in parliament.
In 2014, Swedish regions and municipalities bought services
for almost 120 billion crowns from private welfare companies in
2014, double the level from eight years earlier.
(Reporting by Johan Sennero; Editing by Simon Johnson and Toby