Employee Insurance Agency, balancing between ambitions and resources
Are the tasks of the Employee Insurance Agency (UWV) in balance with the people and resources at its disposal? We looked into this question at the request of the Minister of Social Affairs and Employment (SZW). The Agency fulfils an important task for people in a precarious situation. It provides benefits and helps people find work. The frequent changes that have been made in its tasks have inevitably had consequences for its operational management and performance. We carried out this audit in order to provide the House of Representatives, the Minister of SZW and the UWV itself with suggestions on how to safeguard the UWV’s future.
The UWV is responsible for providing benefits to the unemployed, the ill and the occupationally disabled, for making sociomedical assessments and for managing the associated data. Despite many changes in policies and spending cuts, it has successfully carried out this core tasks to an acceptable standard in recent years. This is a commendable achievement. The UWV’s performance of its other core task, helping people find work, however, has been frustrated by changing political ambitions for its role in mediating between the jobless and the job market.
Although there are no indications that there will be a serious imbalance in the near future, it seems unlikely that a structural balance will be found between the UWV’s tasks and resources in the longer term. Despite government spending cuts, the UWV posted a surplus in recent years and has built up reserves amounting to €224 million. It is therefore expected to balance its budget in the next three years. The situation in later years is less certain, partly because one particular spending cut still has to be implemented in full. The UWV will also have to bear the cost of upgrading its ICT system. Furthermore, the Minister of SZW does not have enough relevant data to steer the UWV. The managerial dialogue between the Ministry and the Agency is not always based on the same data and is therefore not always productive. The UWV itself should have a better understanding of its operating costs so that the Minister can set an appropriate budget.
In recent years, the UWV has been quicker to carry out assessments and has paid benefits on time even though there has been a sharp increase in the number of clients (due to the rise in unemployment triggered by the financial crisis) and deep cuts in its operational budget made by the government and parliament. Any efficiency gains have been due to a simplification of the regulations and the automation of business processes. The number of unemployment benefits is currently declining again and the rules on occupational disability and youth unemployment have been changed. The Participation Act and the Work and Security Act have been introduced. The UWV’s clients have made complaints over the years but they seem to be reasonably satisfied with the service it provides.
To safeguard the UWV’s future, it is first necessary to professionalise the management of the Agency by the Minister of SZW and the UWV’s Board.
We recommend that the Minister of SZW set the UWV’s budget in an economically sound manner using prices that correspond with the operational costs actually incurred and by clarifying the relationship between the budget and performance.
We recommend that the UWV’s Board:
- clarify the actual cost of various products and introduce an efficient working model of cost accounting;
- strengthen the central framing and steering within the UWV.
We also recommend that the Board clarify the potential consequences of the remaining €88 million spending cut.
We recommend the Minister of SZW consider this spending cut and express an opinion of its feasibility and desirability.
We also recommend that the Minister of SZW:
- strengthen ownership and make long-term agreements on the ICT system;
- clarify the ambitions and performance required of the UWV when helping job hunters and provide a budget that parliament considers to be appropriate.
The Minister of SZW has considered our findings and believes there is room for improvement at the UWV. We would note that parliament and the government should pay specific attention to striking a balance between the ambitions for the Agency and its task of mediating on the job market. The financing plan to upgrade the UWV’s ICT system does not yet include the cost of management and maintenance.