Meld. St. 30 (2019–2020)

An innovative public sector — Culture, leadership and competence

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4 Framework conditions for innovation

Figure 4.1 

Figure 4.1

Framework conditions comprise the formal systems that set the terms for day-to-day work in the public sector, such as governance, funding, laws and regulations, forms of organisation and requirements for official studies and reports. These framework conditions can enable public sector innovation, encourage and facilitate innovation, or limit the possibilities. Dedicated policy instruments for fostering innovation in the public sector are described in Chapter 5.

4.1 Governance

4.1.1 The current situation

State governance of the local government sector

Governance through framework funding forms the basis for state governance of the local government sector. This means avoiding detailed regulation of organisational matters in municipalities and county authorities, and generally avoiding detailed regulation of how tasks are addressed. However, the central government has a legitimate need to govern the local government sector. Such governance must therefore be based on national goals and considerations, such as equality, equitable treatment and sustainable development. Framework funding is the main principle for governance of the local government sector, since it is a precondition for giving the municipalities freedom to make local and individual adaptations to the services they provide. Governance through framework funding (section 4.2) and legal framework management (section 4.3) also help to give the municipalities the flexibility they need to implement good and innovative solutions within and across sectors, and across administrative levels.

Governance in the state sector

Performance management is a fundamental principle of governance in the state sector.1 Performance management aims to shift the focus of governance from issuing detailed instructions about resource use, activities and individual tasks to achieving the desired user and societal impacts. The purpose of performance management is to give public agencies freedom of action to carry out their tasks, based on the expectation that the result will be best when those who know the situation best have freedom to decide how to go about achieving the goals. When performance management works as intended, it gives public agencies freedom to find the best solutions for users and citizens.

In 2018, the Agency for Public Management and eGovernment (Difi) looked at how the ministries govern and facilitate innovation in subordinate agencies.2 Ministries and subordinate agencies agree that trust and freedom of action to address tasks are important prerequisites for innovation. In general, the agencies state that the ministries govern in a way that facilitates and allows for innovation. In the Innovation Barometer survey among top executives in the state sector, two out of three respondents state that the ministry facilitates the use of innovative work methods in their organisation.3

At the same time, a survey of the ministries’ role in promoting restructuring shows that strategic governance is weak, and that the civil service appears to play a defensive role in relation to initiating and facilitating restructuring.4

The experience report from the program for better governance and management in the state sector (2014–2017) shows that several central government agencies believe that they are subject to too detailed regulation and therefore lack the room for manoeuvre required to address tasks in new ways and cooperate with other actors.5 Several executives stated that they do not always have the freedom of action they need. Detailed regulation, increased reporting and control impede managers and employees who want to find the best solutions for society at large and for users, often across sectors and levels.

The number of management requirements that apply to central government agencies was reduced by 24 per cent from 2012 to 2015. A research project at the University of Oslo (UiO) showed that, after this reduction, a significant number of agencies were still subject to a high degree of both activity management and performance management. This applied first and foremost to large organisations of major political importance.6 On assignment for the Ministry of Local Government and Modernisation, master’s degree students taking political science at UiO updated the study using data from letters of allocation from 2020. The review shows that the reduction has been reversed and the level has increased since 2015. In the letters of allocation from 2020, each organisation has on average two more goals and key performance indicators than it had in 2015. The corresponding number for activity requirements is seven more. However, if the findings from that year are compared with the results from 2012, the number of goals and key performance indicators has decreased. The number of activity requirements is about the same as in 2012.7

4.1.2 Assessment of the situation

Governance of the local government sector

In the last few decades, the municipalities have been assigned an increasing number of tasks through special laws. At the same time, however, there has been a tendency towards more detailed regulation, particularly in welfare-related fields, for example through procedural and competence requirements set out in laws and regulations.8 Statutory rights have increasingly been introduced in areas such as home nursing, practical assistance and training, home help services and respite measures. The purpose of this is to strengthen users’ due process protection and strengthen the requirements for good services in these areas. However, detailed regulation of this kind entails a great deal of additional work and ties up more of the municipalities’ resources. Implicitly, this means giving lower priority to other areas, although this is not explicitly stated.

Staffing norms are also intended to ensure good and equitable services in selected areas across municipalities. However, they also tie the municipalities or agencies to fixed solutions. The costs can be extremely high and can limit interest in investing in new and innovative solutions that can provide equally good or better services with fewer staff.

Governance in the state sector

If the public sector is to succeed in carrying out complex, cross-sector tasks for the population, mutual trust and transparency are prerequisites, as is a common understanding of the problem and how tasks and services are interconnected.

It can be difficult to strike a good balance between, on the one hand, ensuring room for manoeuvre and incentives for innovation and, on the other, setting delivery, performance and reporting requirements.9 It is also the Government’s goal that central government agencies should not be subject to more performance and management requirements than necessary.

Moreover, it is not necessarily sufficient to give central government agencies freedom of action to innovate. It is also important that the ministries monitor whether the agencies make use of this freedom, and that the ministries are able to assess the agencies’ innovation competence and capacity. This means that the ministries themselves need to have sufficient expertise in governance, innovation, innovative work methods and digitalisation, and that innovation is included in the governance dialogue.

An important part of the governance of agencies is to motivate them to innovate, support them in taking necessary risks in innovation projects when required, and contribute to ensuring that the innovations have the desired impact and benefits. The ministries can also use the agency governance dialogue to collect and spread good examples of innovation, and to establish contact between agencies where expedient.

4.1.3 The way forward

Governance of the local government sector

The Government’s goal is to reduce detailed central government regulation and to decentralise more power and authority to local communities and their elected representatives. Framework funding will continue to form the basis for the State’s governance of the local government sector. In 2018, the Government submitted a proposal for a new Local Government Act, which largely entered into force in autumn 2019. It codifies the municipalities’ self-government by stipulating that each municipality and county authority is a separate legal entity with its own elected leadership that the government administration cannot control or instruct unless authorised by law. It also codifies some important principles relating to the national authorities’ relationship to local self-government. Enshrining these principles in law helps to underline the municipalities’ freedom of action, and to support and emphasise the municipalities’ overall responsibility.

Governance in the state sector

The Government maintains its commitment to trust-based performance management as a fundamental principle in the state sector, and it will endeavour to reduce the number of performance goals and activity requirements, since this will increase freedom of action and incentives for innovation both within and across organisations and sectors. However, the Government acknowledges that there is still a potential for improvement with respect to how performance management is practised. It can be difficult, for example, to set good impact goals and it can be challenging to measure the impact of efforts. In collaboration with the subordinate agencies, the ministries must assess how performance management is practised in the state sector, and whether this practice provides sufficient freedom of action and incentives for innovation. The Government will reverse the increase in the number of performance goals, key performance indicators and activity requirements that has taken place since 2015.

The ministries will facilitate a long-term approach and collaboration across sectors and levels of the public sector, and with actors outside the public sector. To support the ministries and agencies in this work, the Norwegian Agency for Public and Financial Management (DFØ) is developing its guidelines and services in areas including performance management, agency governance, corporate governance, coordinated and long-term management, and strategy, as well as competence-raising measures for managers.

4.2 Financial structures and incentives

4.2.1 The current situation

The budget system in the state sector is based on the principle of framework funding, meaning that public agencies receive an allocation that they use within the limits and guidelines set out by the Storting. This allows them to prioritise and reallocate. The combination of a predictable budget process, known procedures and deadlines and the freedom provided by framework funding allows for the planning and implementation of projects and other changes that require cross-sector collaboration.

Innovation projects can entail risks and costs that come in addition to ordinary operations. Most innovation and development measures must be funded within the existing budgetary limits that apply to the local government sector and central government agencies. This means that funds must be reallocated within the municipality’s or agency’s own area. The Regulations on Financial Management in Central Government and the current budget procedures allow for flexibility, including the possibility of exceeding operating allocations for investment purposes. Ordinary central government administrative bodies are entitled to exceed operating allocations by up to five per cent for investment purposes if they make a corresponding saving during the course of the next five financial years. Interest is not charged on the amount, and the saving does not have to start until the third year after the investment. This system can help to ensure that development projects, including innovation and digitalisation projects, can be covered within the agency’s ordinary budgetary limits. See also the description of social impact bonds (Chapter 11) as an example of alternative funding solutions.

Innovation Barometer surveys of the central and local government sectors have shown that limited financial resources are seen as both impediments to and drivers of innovation. The Norwegian Association of Local and Regional Authorities’ (KS) also points out that the most innovative municipalities have a small share of ‘free’ revenues adjusted for expenditure needs.10

The new Local Government Act states that, within the bounds of national fiscal policy, municipalities and county authorities should have ‘free’ revenues that provides financial freedom of action. The principle of framework funding means that a municipality’s income from the state, together with tax revenues, is largely ‘free’ revenue that it can use within the limits set out in laws and regulations. This enhances the possibility of using resources in accordance with local priorities and cost factors, based on the municipality’s proximity to and knowledge of the local community’s needs, possibilities and challenges. The system of framework funding fosters innovation since the benefits of service development and rationalisation go to the municipality. Earmarked funding only comprises about six per cent of the local government sector’s overall income. A significant number of earmarked grants are nonetheless allocated to the local government sector.11

Earmarked funding is often aimed at specific user groups, issues or activities and can thereby stimulate measures within more or less delimited areas. It is a requirement for earmarked grants that calls for applications are issued, and the municipalities normally have to apply for the funding and report how it is used. Application processes and reporting are resource-intensive for both the applicant and administrator. The administrative requirements, for example, mean that municipalities with relatively good overall finances utilise earmarked funding best.12

Textbox 4.1 Program funding under the Nordic 0–24 collaboration

The Government has established a project under the Nordic 0–24 collaboration to improve cross-sector follow-up of vulnerable children and adolescents, and their families. As part of the collaboration, the Government has initiated a program funding pilot, where parts of existing grant schemes aimed at vulnerable children and adolescents are merged into one program. The objective is to make it easier for municipalities to apply for funding for measures that include more than one sector, and to adapt the measures to the local situation. One important goal is to increase freedom of action at the local level.

The pilot encompasses five grant schemes and twelve municipalities in Trøndelag, Innlandet, Vestfold and Telemark counties. The pilot will run until the end of 2022.

Funding earmarked for stimulating innovation can provide incentives to test new solutions. It can also help to clarify that innovation is something that takes place outside normal activities rather than as an integrated part of them. The framework for the individual grant schemes can affect whether applicants see innovative and cross-sector solutions as possibilities. Program funding tested under the Nordic 0–24 collaboration (Box 4.1) is an example of a funding model that is more flexible than many sector and topic-specific grant schemes.

4.2.2 Assessment of the situation

During the process of preparing this white paper, several bodies stated in their input that it is difficult in practice to prioritise innovation and development projects, particularly those that require cross-sector collaboration, and where the expenses and gains fall under different areas.

The system whereby the Government and the Storting consider the national budget as an overall whole is intended to facilitate projects in which expenses and gains fall under different areas or sectors. It nevertheless seems to be challenging to achieve this in practice.

The Government has incorporated earmarked funding for around NOK 3.6 billion in the framework allocation for the local government sector in 2020, but there is still a potential to further incorporate and simplify this.

4.2.3 The way forward

The Government will continue its work on incorporating and simplifying earmarked schemes. This will give the municipalities and county authorities greater financial freedom of action, and lead to less bureaucracy in the state sector and in municipalities. Local freedom of action is a precondition if the municipalities are to be able to work on innovation and locally-adapted solutions.

The Government will continue its work of clarifying how the ministries and agencies can utilise the opportunities and freedom of action offered by the budget system with regard to prioritising innovation and development projects within and across agencies, organisations and sectors. The Government will include important innovation projects in the annual budget proposition going forward. Highlighting the issue in this way can help to develop a culture of innovation and provide a better overview and learning across ministries and sectors.

4.3 Laws and regulations affect freedom of action

4.3.1 The current situation

Research and innovation barometer surveys have shown that laws, regulations and other regulatory frameworks can both promote and impede innovation.13 Both the scope and design of the regulatory framework affect freedom of action.

Laws that require that something be done in new ways using new policy instruments and other technical solutions could create new needs and thus foster innovation. New environmental requirements that can foster innovation because the previous solutions are no longer suited to the requirements are one example of this. Some laws and regulations also directly encourage or contribute to innovation, for example by providing for exemptions from ordinary requirements or where exemptions or pilots can be used precisely in order to test new solutions (Chapter 9).

The proposal for a new Public Administration Act contains a detailed description of automated case processing and when this may be an option.14 If such a provision is adopted, it has the potential to foster innovation in a number of areas.

Laws and regulations can help to ensure due process protection, equal treatment and equitable services for citizens throughout the country. However, too detailed statutory regulation can impede or limit innovation. For instance, explicit and detailed statutory requirements can reduce the possibility of deciding priorities locally, or reduce incentives to invest in new and innovative solutions that can provide better services with fewer staff. Laws and regulations can also be an obstacle to introducing new or digital solutions if the wording of the legislation does not take account of this. It was described earlier in this chapter how strong statutory regulation, such as statutory rights or staffing norms, can have a negative impact by tying municipalities or agencies to predefined solutions.

There are also many laws and regulations that regulate frameworks and conditions for the public sector, and thus also for innovation in the public sector. In addition to national laws, regulations and other regulatory frameworks, there are some international frameworks, regulations and rules that have an impact on freedom of action and thereby impede innovation and rationalisation. To develop the public sector in the best interests of citizens, cooperation between sectors and administrative bodies can be both decisive and necessary. The Public Administration Act regulates the case processing and administrative decisions made by most state and municipal administrative bodies. In the proposal from the Law Commission on the Public Administration Act, the need for collaboration was included in the provision relating to the purpose of the act:

The Act shall facilitate good, trustworthy and efficient case processing in the public administration. It shall safeguard considerations for individuals and society. To fulfil the purpose of the Act, the administrative body shall act impartially and collaborate with other bodies.15

4.3.2 Assessment of the situation

Although laws and regulations in Norway are generally technology-neutral and open for innovation, a great deal of the regulatory framework has not kept up with developments and can thereby impede innovation. Developments are unfolding quickly and the legislation is not necessarily adapted to new opportunities that arise. It can also be challenging that regulations are interpreted too strictly, resulting in opportunities for innovation not being taken.

Discretionary provisions in legislation are necessary to provide for local self-governance, and can allow room for innovation. However, discretionary provisions can also make it difficult to introduce automated case processing. It is therefore decisive to strike a balance between several considerations and concrete assessments of the needs in each individual case when drafting laws and regulations. Innovation, digitalisation, local self-governance and the Norwegian legislative tradition, whereby acts are not too long or detailed, are among the factors that must be addressed in the work on developing regulatory frameworks.

4.3.3 The way forward

The Ministry of Local Government and Modernisation has received input on certain specific obstacles to digitalisation in the regulatory framework, and efforts are being made to gain an overview of and address these obstacles. The fact that there do not currently appear to be many concrete obstacles to digital communication does not mean that the regulations facilitate digitalisation and innovation. The digital strategy for the public sector stated that the Government will review the regulations to remove obstacles to digitalisation.16 This review will be based in part on the work on seamless public services (Chapter 6). It is also necessary to define the principles and characteristics of digitalisation-friendly rules and regulations. The Government will establish a national resource centre for data sharing based at the Norwegian Digitalisation Agency. The centre will have cutting-edge expertise in the relationship between the law, technology and business and administrative processes. It will play a key role in the work on digitalisation-friendly and clear regulations. The Government expects that considerations for digitalisation-friendliness and the need for freedom of action and innovation in the public sector will be weighed against each other in this work.

The coronavirus pandemic has made it necessary to speed up digitalisation in many areas. This includes the courts of law, which had fallen behind in terms of the possibility of using electronic communication and signatures. Interim regulations have now been adopted for the use of electronic signatures.17 There has been a sharp rise in the number of telephone and video consultations with GPs, and the pricing system for electronic consultations was changed to make it easier for GPs to use this method without being in physical contact with their patients. A number of legislative amendments have also been adopted in connection with the pandemic to improve the possibilities for digital contact. They includes temporary regulations that provide for exemptions from the provisions requiring physical attendance at exams and teaching, and at meetings of limited liability companies and foundations. Experience from the exemption provisions could form the basis for permanent legislative amendments in certain areas.

4.4 Framework for decision-making in the State

4.4.1 The current situation

Innovation often entails learning from our mistakes and successes through incremental development and experimentation. This is not in opposition to conducting official studies or evidence-based hypothesis testing. However, it may entail new requirements for how study and coordination processes are carried out in the public sector, including awareness of and structured reviews of risks and uncertainty.

In the public sector, the Instructions for Official Studies and Reports and the Norwegian State Project Model and pertaining quality assurance scheme form the framework for studies of new initiatives and large-scale projects.

The Instructions for Official Studies and Reports are joint instructions for the ministries and subordinate agencies in the government administration. The instructions are intended to ensure a good basis for decision-making on measures by central government. When the new instructions entered into force in 2016, the objective was to make it easier to comply with the requirements. Clear minimum requirements were established in the form of six basic questions that all official studies and reports must address.18 The purpose is to ensure thorough assessments of how a problem can be solved and which alternatives are relevant.

The new instructions set out clearer requirements for early involvement of affected parties. This is intended to counter silo and sector thinking and encourage ministries and agencies to coordinate measures to a greater extent. The instructions have also led to greater flexibility through the principle of proportionality. This means that the thoroughness and scope of a study must be in proportion to the expected impact of the measure to be studied. An economic analysis must be conducted of measures with significant impacts, while a less extensive study is sufficient for less wide-ranging measures. The combined effect of these changes to the instructions should ensure that the regulations are better adapted to the need for innovation.

The Norwegian State Project Model is a joint framework for studies, planning and external quality assurance of major central government investment projects. The goal is to avoid wrong investments and ensure good control of costs and benefits throughout the projects’ planning and implementation. It aims to contribute to the most efficient use of public resources. Investment projects with an estimated total expenditure of NOK 1 billion (over NOK 300 million for digitalisation projects) are subject to the requirements.

4.4.2 Assessment of the situation

Studies must be carried out in accordance with the instructions even if it has already been decided at the political level to implement a measure. The Norwegian Agency for Public and Financial Management has mapped the status of studies conducted in the public administration in 2019 and looked at developments since the new instructions entered into force in 2016. The survey shows that there is still great room for improvement when it comes to compliance with the instructions. As in 2016, the biggest shortcoming identified in the studies was the absence of alternative measures, where around 70 per cent only study one measure.19 There is also insufficient use of socio-economic analyses. According to the ministries, the most important reasons for inadequate studies are time pressure, political requirements and a lack of resources, while subordinate agencies emphasise the availability of resources, expertise in their own organisation and the need for coordination.

4.4.3 The way forward

Official studies of central government measures must not be an obstacle to innovation, but must stimulate new thinking at an early stage and allow room for innovation during the process. Central government executives play a key role and must ensure that the their organisations have sufficient resources and expertise to conduct studies. A culture for innovative thinking must be established. As well as addressing challenges and grasping opportunities within the organisation’s own area of responsibility, interdisciplinary collaboration and coordination with other bodies is also important. It is also important to work on culture and management to ensure a sufficiently broad basis for decision-making. The Government has therefore asked the Norwegian Agency for Public and Financial Management and the Norwegian Digitalisation Agency to implement competence-raising measures and develop relevant guidelines. They will be further developed in step with needs and experience from the aforementioned review of official studies.

The Government has lowered the cost threshold for which digitalisation projects, pursuant to the Norwegian State Project Model, are required to conduct an official study – from NOK 1 billion to NOK 300 million. This threshold value is lower than for other investment projects since digitalisation projects of this size are considered to be at least as complex and risky as physical infrastructure projects with far higher costs. At the same time, assessments and quality assurance must also take into account that digitalisation projects are characterised by rapid technological change, great opportunities for innovation and continuous service development.

To support the work on assessing, planning and quality assuring digitalisation projects, the Ministry of Finance, in cooperation with other ministries, has developed dedicated guidelines for digitalisation projects in the Norwegian State Project Model. The guidelines help those involved in assessment and quality assurance to understand how to interpret the requirements in the context of digitalisation, including whether the distinctive characteristics of digitalisation projects can be taken into account. Better studies and quality assurance of digitalisation projects, combined with better guidelines, will provide a better basis for choosing the right projects and enable projects to yield greater benefits.

4.5 Forms of organisation and innovation

4.5.1 The current situation

How the public administration is organised must be adapted to needs and possibilities.20 This applies to the internal organisation of each public sector body, between bodies and levels of administration, and how they are organised geographically. Innovation, digitalisation and rationalisation are drivers for new solutions and requirements that affect the organisation and development of public agencies. There has been a trend in recent years towards greater use of functional organisation in central government agencies. Most regional offices of central government agencies were previously organised as separate entities, with all disciplines and support functions present in each location. Several large agencies have now transitioned to a function-based structure. Regional offices have become functional centres that specialise in one area and provide services for the whole country. Examples include the Norwegian Tax Administration, the National Archives of Norway, the Norwegian Public Roads Administration, the Norwegian Agency for Public and Financial Management and the Norwegian State Educational Loan Fund.

Since the 1990s, the public sector has used the market to strengthen and rationalise service provision in a number of areas. Former monopoly sectors have been deregulated and entities hived off as independent legal entities. Corporate governance, with more overall and less detailed management, has thus replaced traditional agency governance. The establishment of Nye Veier AS is one example of this (Box 4.2). The changes have led to better and cheaper services and are in themselves innovation at the structural level. They have also provided a basis for innovation at agency level. Other examples of deregulated markets are in the telecommunication, postal and power sectors. Enterprises hived off as separate companies include Posten Norge AS, Telenor ASA, Avinor AS, Statnett SF and Statkraft AS.

Textbox 4.2 Establishment of Nye Veier AS

Nye Veier AS has been in operation since 1 January 2016. The company plans, builds, manages and maintains selected stretches of road. It prioritises developments on the basis of their socio-economic profitability. This leads to competition between projects to reduce development costs and increase the benefits. Nye Veier estimates that the development costs for the stretches of road included in its start-up portfolio can be reduced by 20 per cent.1 The establishment of Nye Veier AS has resulted in competition with the Norwegian Public Roads Administration, which also estimates that it can achieve significant potential cost reductions in future road projects. In connection with the transfer of responsibility for the administration of county roads from the Norwegian Public Roads Administration to the county authorities from 2020, the remaining parts of the Norwegian Public Roads Administration’s organisational model changed from a regional organisation to functional organisation based on divisions. The new organisation has bigger and more specialised environments that are better equipped to address increasingly complex tasks and make good use of new technology. The Norwegian Public Roads Administration’s investment in digitalisation reduces costs and makes services for users more accessible via self-service solutions.

1 Proposition No 1 (2019–2020) to the Storting from the Ministry of Transport

4.5.2 Assessment of the situation

Requirements relating to innovation and restructuring, more efficient administration and user-oriented services challenge the way in which we address tasks and existing forms of organisation. Digitalisation, artificial intelligence and automation enable services and solutions that did not seem conceivable just a few years ago. This provides opportunities for, but also requires, a more cohesive public administration. It is also the case that many societal challenges and new opportunities affect several sectors and administrative levels simultaneously. This can challenge traditional work methods and forms of organisation in the public administration and necessitate a more whole-system approach and cooperation across sectors and administrative levels.

4.5.3 The way forward

Innovation, digitalisation and intractable problems appear to be changing the forms of organisation we need. More knowledge is needed about the organisational changes taking place in the public administration, and about the impact these changes have on innovation and efficiency. The Government will therefore initiate a project to assess whether it is necessary to make adaptations to existing models for how the central government organises its activities and whether completely new models are needed.

The Government will also monitor the benefits generated by the recent reforms, including in the transport and communications sector. It is the Government’s goal that resources are allocated to the right measures, and that these measures are implemented with optimum efficiency. One important aspect of the transport and communications sector reforms has been the facilitation of less detailed policy regulation, more competition and greater operational freedom in the organisations. The reforms have also made it possible to test whether a different form of organisation and different framework conditions can lead to more rapid, efficient and whole-system development of parts of the national road network.

More organisations are trying out other ways of organising their activities than formal hierarchies, since such hierarchies can limit their capacity for change in an increasingly complex and unpredictable reality. The City of Oslo has introduced a model that has led to increased user satisfaction and greater satisfaction among employees (Box 4.3). The Government wants more public sector bodies to try out alternative forms of organisation that better facilitate innovation and new ways of thinking.

Textbox 4.3 New organisational models can foster innovation

The City of Oslo organises its home-based services in small, interdisciplinary teams in accordance with a trust-based model. The objective is to ensure greater continuity in relations between users and staff, to empower staff and help to create more security and better quality services. The services are allocated and carried out according to the principle: What is important to you?, and the staff are authorised to adapt the services to each user’s needs.

The model was initially introduced as a pilot project in four city districts. An evaluation of the pilot shows an increase in user satisfaction, and that the staff felt that the changes had a positive impact on their work. Based on the City of Oslo’s experience of handling the COVID-19 pandemic in spring 2020, there is also a positive correlation between small, interdisciplinary teams and the possibility of preventing the spread of infection. This effect will be subject to further evaluation.

All the 15 city districts in Oslo have now introduced this trust-based model in home-based services, but have chosen different organisational solutions.

Source Eide et al. (2018) Tillitsmodellen hovedpilotering i Oslo kommune (‘Main pilot of the City of Oslo’s trust-based model’ – in Norwegian only)

4.6 The Government’s aims

The framework conditions for the public sector must allow for freedom of action and incentives for innovation.

The Government will:

  • continue with trust-based performance management as a fundamental principle in the state sector and endeavour to reduce the number of performance goals and activity requirements to which central government agencies and organisations are subject

  • reduce detailed central government regulation and simplify earmarked funding schemes in the local government sector

  • review and update laws and regulations with a view to making them technology-neutral and digitalisation-friendly, and prioritise laws and regulations that are relevant to the work on seamless services across sectors and administrative levels. This must be done without creating new obstacles to public sector innovation.

  • mention important innovation projects in the annual budget proposition.




Difi (2018) Departementenes styring og tilrettelegging for innovasjon i underliggende virksomheter (‘The ministries’ governance and facilitation of innovation in subordinate agencies’ – in Norwegian only). Memo 2018:5


Difi (2018) Innovation barometer for the public sector 2018. Report


Difi (2019) Departementene i førersetet for omstilling? (‘Ministries in the driver’s seat as regards restructuring?’ – in Norwegian only). Report 2019:3


The Ministry of Local Government and Modernisation (2018) Program for bedre styring og ledelse i staten 2014–2017 (‘Program for better governance and management in the state sector 2014–2017’ – in Norwegian only). Experience report


Askim et al. (2019) Quasi-contractual ministry-agency steering of state agencies: Its intensity, modes and association with agency characteristics. International Public Management Journal


Ministry of Local Government and Modernisation (2020) Etatsstyring i praksis: En analyse av departementenes tildelingsbrev til underliggende virksomheter (2012–2020) (‘Agency governance in practice: An analysis of the ministries’ letters of allocation to subordinate agencies (2012–2020)’ – in Norwegian only). Report


NIBR (2019) Nasjonal standardisering vs. Lokal autonomi: rammestyring i prinsipp og praksis (‘National standardisation vs. local autonomy: governance through framework funding in principle and practice’ – in Norwegian only). Report 2019:12


Difi (2018) Departementenes styring og tilrettelegging for innovasjon i underliggende virksomheter (‘The ministries’ governance and facilitation of innovation in subordinate agencies’ – in Norwegian only). Memo 2018:5


KS (2020) Innovation Barometer 2020, Difi (2018). Innovation barometer for the public sector 2018. Report


Områdegjennomgang av øremerkede tilskudd til kommunesektoren (‘Area review of earmarked grants allocated to the local government sector’ – in Norwegian only). Expert group report, December 2017. Proposition No 105 to the Storting (2019–2020) Kommuneproposisjonen 2021 (‘Local government sector proposition 2021’ – in Norwegian only), Annex 5


Håkonsen & Løyland 2011; Hagen 2020 in Telemarksforsking (2020) Små distriktskommuners deltakelse i innovasjonsvirkemidler (‘Small rural municipalities’ participation in innovation policy instruments’ – in Norwegian only). Report 540


Difi (2018) Innovation Barometer for the public sector 2018. Report, KS (2020) Innovation Barometer 2020, DeVries et al. (2016), Innovation in the Public Sector: A systematic review and future research agenda. Public Administration, volume 94, issue 1


Official Norwegian Report (NOU) 2019:5 New Public Administration Act




Ministry of Local Government and Modernisation (2019) One digital public sector. Digital strategy for the public sector 2019-2025


Provided for in the Temporary Act to remedy the consequences of the outbreak of COVID-19 etc. (the Coronavirus Act)


The six questions are: What is the problem, and what do we want to achieve? Which measures are relevant? Which fundamental questions are raised by the measures? What are the positive and negative effects of the measures, how permanent are they, and who will be affected? Which measure is recommended, and why? What are the prerequisites for successful implementation?


The Norwegian Agency for Public and Financial Management, Report 2020:1 Tilfredstiller statlige utredninger utredningsinstruksens krav? (‘Do official studies and reports satisfy the requirements of the Instructions for Official Studies and Reports?’ – in Norwegian only)


Difi Report 2019:4: Digitalisering, kompetansebehov og effektivisering gir desentral konsentrasjon. Om utvikling i lokaliseringen av statlige arbeidsplasser (‘Digitalisation, competence needs and rationalisation lead to decentralised concentration. About developments in the localisation of central government jobs’ – in Norwegian only)

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