Criticism has surged recently against social welfare service corporations for failing to sufficiently fulfill their roles, despite having an easier time engaging in almost the same services as ordinary private-sector companies as a result of such measures as preferential tax treatment.

To reform social welfare service corporations that run such facilities as nursing homes for the elderly and child care centers, an expert panel of the Health, Labor and Welfare Ministry has worked out a draft report containing a set of recommendations. The proposed report should be seen as a good opportunity to enhance the quality of their services.

Social welfare service corporations are nonprofit private-sector organizations based on the Social Welfare Law. They number about 20,000 nationwide. While being subject to strict regulations and supervision by administrative authorities, the corporations are entitled to receive preferential treatment in various areas, such as exemption from corporate tax and other public dues, and eligibility for subsidies to improve their facilities.

Bodies authorized as social welfare service corporations have played pivotal roles in the nation’s social welfare programs since the 1950s, but recently an increasing number of businesses and nonprofit bodies from various fields have been entering the field of social welfare services. The environment surrounding social welfare service corporations has been changing drastically.

Because of such phenomena as the rapidly aging society and the instability of employment, tasks that cannot be fully handled through the existing government-run social welfare programs have been brought to the fore, such as the need to provide care for elderly citizens living alone and supporting hikikomori youths who have withdrawn from society.

As things stand, however, few social welfare service corporations have actually been meeting these new challenges in local communities.

Reexamine mission

The draft report by the health ministry panel has rightly pointed out the need to make it obligatory for social welfare service corporations to engage in activities for the benefit of local communities. It is undoubtedly one of the principal duties of such corporations to address tasks in their fields that cannot be undertaken by profit-pursuing businesses.

The draft has also deemed it problematic that tokuyo homes, which are operated by social welfare service corporations for elderly people who require around-the-clock nursing care, have amassed as much as ¥300 million on average in profits.

It was quite reasonable for the draft report to stress as it did that the raison d’etre of the corporations would be called into question if they fail to make good use of such funds to provide their localities with better welfare services.

To make their activities more effective for the good of local communities, it is necessary to take such steps as expanding the scale of the corporations and facilitating joint operations by a larger number of corporations.

Worthy of note in this respect are social welfare service corporations in Osaka Prefecture, which have been cooperating with each other by pooling funds to jointly offer counseling support services for people in need. They have also provided people in straitened circumstances with livelihood expenses and food. Their activities can serve as a positive model for other social welfare service corporations.

Effective from fiscal 2015, the administration of some publicly run nursing care insurance services will be transferred to city, town and village entities. The law for helping disadvantaged people become self-reliant will also be put into force at the beginning of the next fiscal year, with city, town and village governments taking charge of providing the low-income residents with livelihood counseling and helping them find employment.

Social welfare service corporations are expected to be major bodies to be entrusted with such operations. This means that corporations must play even larger roles.

Some chief executives’ practice of treating social welfare service corporations like their exclusive property has become an issue. To ensure public trust, it is essential to enhance the transparency of their operations.

Only half of such corporations have disclosed their financial statements. As stated in the draft report, it is imperative to make it obligatory for the corporations to make them public.