Pihlajalinna Plc:The government plans temporary legislation to limit outsourcing contracts

Pihlajalinna Plc Stock Exchange release 5 February 2016 13.45 EET

The government plans temporary legislation to limit outsourcing contracts

The Ministry of Social Affairs and Health and the Ministry of Finance prepare temporary legislation to limit municipalities and joint authorities' social and healthcare complete outsourcing contracts to be presented to the parliament as soon as possible. The temporary legislation would be effective until the end of 2018 when the organizing responsibility of social and healthcare would move from the municipalities and joint authorities to the independent regions. 

The objective of the ministries is to safeguard the objectives of the social and healthcare reform and to prevent the municipalities' own solutions with which the municipalities have tried to control the rising of the social and healthcare costs and to retain the local services.

Such solutions are for example large real estate investments and complete outsourcings where the services are bought fully or mostly from a private service provider with a long term contract.

In the release published by the ministries today it is stated that the investments that improve productivity and are otherwise appropriate will be secured. 

Pihlajalinna Plc CEO Mikko Wirén: Social and healthcare reform is a massive administrative reform. I hope that the constitutional legislation experts evaluate the constitutionality of the temporary legislation. It would also be justified that the ministries would genuinely explore the cost efficient outsourcing models that can be fitted as a part of the national social and healthcare reform preparation process. I'm pleased that the ministries release confirms the fact that the current outsourcings contracts will continue without interruption also after the social and healthcare refom enters into force. I see no reason to forbid outsourcings which according to the effectivity research have been found to create significant savings and operative productivity in a short period of time.

The temporary legislation is still in preparation state and Pihlajalinna has no information if its final form. It is too early to evaluate its impact to Pihlajalinna business operations. Pihlajalinna will continue to monitor the preparation of the legislation.

Further information

Mikko Wirén, toimitusjohtaja, Pihlajalinna Plc, 050 322 0927

Terhi Kivinen, SVP, Communications, Marketing and IR, Pihlajalinna Plc, +358 40 848 4001, terhi.kivinen@pihlajalinna.fi

Distribution

Nasdaq OMX Helsinki

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