Dutch municipality to reimburse costs for commercial conservators

The Dutch city of Deventer must continue to offer residents with low incomes a choice between commercial conservators and municipal conservators. This has been determined by the Netherlands Authority for Consumers and Markets (ACM) following a complaint filed by De Financiële Hulpverlener, a commercial business that provides conservator services.

Conservators take care of all financial affairs of individuals who are unable to do so themselves. Conservators manage the earnings of clients, and make sure that their fixed expenses are paid on time.

What is the problem?

As a municipality, Deventer offers conservatorships for individuals with low incomes who are unable to manage their financial affairs themselves. They do not have to pay for this municipal service. Until late-2016, residents were also able to opt for a commercial conservator. Conservator costs were then reimbursed through a specific type of income support, called special assistance (in Dutch: bijzondere bijstand). Earlier this year, Deventer halted this form of reimbursement with the aim of reducing the expenditure on this type of income support. It subsequently informed commercial conservators that conservatorship costs would no longer be reimbursed in 2017. Chris Fonteijn, Chairman of the Board of ACM, explains: “ACM believes that individuals with low incomes, too, should be able to choose a conservator themselves.”

No public funds for commercial activities

Only under strict conditions are municipalities allowed to use public funds for activities that commercial businesses are also able to offer. A municipality has to include the integral costs, and is not allowed to offer a service for free. If Deventer covers the conservatorship costs with public funds, it is not allowed to reimburse the costs for municipal conservators only. It also has to reimburse the costs for commercial conservators.

Response from the municipality

Deventer has stated that it has already reversed the decision not to reimburse anymore the costs for commercial conservators. According to the municipality, residents with low incomes are once again able to opt for commercial conservators, and receive a reimbursement for their services. In addition, Deventer has indicated to ACM that it is drafting new rules aimed at reducing expenditure on special assistance. Mr. Fonteijn adds: “ACM understands that Deventer is working on new rules that are in line with the Dutch Act on Government and Free Markets. That is good news. “

Fair competition

There are special rules in place for governments that engage in commercial activities. These rules are laid down in the Dutch law on competitive neutrality, the Dutch Act on Government and Free Markets, and make sure that the government does not compete with businesses unfairly. ACM enforces compliance with these rules.