Finland’s procurement law reform clears committee amid opposition warnings of higher costs

A parliamentary committee on Wednesday finalized its report on Finland’s contested procurement law reform, which would require municipalities to own at least 10 percent of a company to bypass competitive tendering for public contracts, Yle reports.

The proposal, backed by the governing coalition, aims to increase market competition but has drawn sharp criticism from opposition parties and local governments. All opposition members of the finance committee filed dissenting opinions, arguing the change will raise costs and disrupt services, particularly in smaller municipalities.

Finance committee chair Vilhelm Junnila (Finns Party) defended the reform as the government’s most significant pro-competition measure this term, acknowledging that “stakeholders naturally resist changes affecting their own interests.” He noted that the law’s impact on statutory services would be monitored, with potential legislative adjustments if shortcomings emerge.

Opposition lawmakers, including Social Democrat Matias Mäkynen, warned the 10 percent ownership threshold would force municipalities to restructure existing partnerships or face higher expenses. Mäkynen called the reform a “major mistake,” citing risks to specialized healthcare—such as joint-replacement services—and support functions like payroll, IT, and cleaning. The Social Democrats proposed scrapping the ownership rule and raising the external sales cap for public entities from 5 to 20 percent of turnover, the EU maximum.

Left Alliance committee member Johannes Yrttiaho echoed concerns, stating the reform would “worsen the financial strain on already struggling small municipalities.” Centrist lawmakers also filed dissent, though the committee’s governing majority advanced the report for a full parliamentary vote.