Recovery State Netherlands — Statecraft

The Netherlands consistently ranks in the top ten of international governance indices. At the same time, the past decade has cost us at least one hundred billion euros in recovery operations that could have been prevented: the childcare benefits affair (7 billion), Box 3 (11 billion), Groningen (50 billion), UWV benefit reassessments (an estimated 10 billion), nitrogen (an estimated 25 billion).¹ This pattern — ignore the signals, carry on until a court compels action, then repair in panic — is not a series of incidents. It is the default mode of Dutch public administration.

For the international reader, the case names deserve a sentence each. In the childcare benefits affair, the Tax and Customs Administration wrongly branded tens of thousands of parents as fraudsters and reclaimed benefits in full, destroying family finances; the affair brought down a cabinet in 2021. Box 3 is the wealth bracket of the Dutch income tax, in which the state for years taxed a notional return that savers demonstrably never earned, until the Supreme Court struck the regime down. In Groningen, decades of natural gas extraction caused earthquakes that damaged tens of thousands of homes while warnings were set aside. UWV is the Employee Insurance Agency, which administers unemployment and disability benefits and mishandled reassessments on a large scale. The nitrogen crisis followed a permitting programme that courts declared unlawful, freezing construction across the country.

The anatomy of administrative failure

The mechanics are identical in every case. In the childcare benefits affair, signals of disproportionate enforcement were known to civil servants and ministers from 2013 onwards. The fraud hunt continued until a court intervened in 2019. On Box 3, tax lawyers warned from 2017 that the notional-return levy would not survive judicial scrutiny, yet it took until 2021 before the Supreme Court forced intervention. In Groningen, the operator NAM ignored fifty years of seismological warnings about earthquake risk until the damage became unmanageable.

On nitrogen, everyone knew from 2015 that the Integrated Approach to Nitrogen programme was legally fragile — too many permits issued against future emission reductions. Permitting continued regardless, until the Council of State, the highest administrative court, shut everything down in 2019. The consequence: 40,000 construction projects halted, farmers without prospects, 25 billion in recovery costs. On the energy transition, grid operators have warned since 2018 that the electricity network cannot carry the transition without accelerated investment. The signals are acknowledged in policy documents, but concrete action waits until the first large-scale blackouts compel what prevention could not.

The structural problem sits deeper than individually failing people or organisations. It sits in the architecture of the Dutch administrative system since the introduction of the Senior Civil Service (Algemene Bestuursdienst, ABD) in 1995. The intention was to professionalise civil servants and promote mobility. The effect is the opposite: the systematic absence of long-term ownership. Senior civil servants rotate on average every four years. That is exactly long enough to pass problems on, and just short enough never to be accountable for the long term. Benita Plesch, the founder of the ABD, acknowledged in 2024 that the expansion of the system had been, in her words, a terribly stupid mistake.²

The separation of policy and execution, accelerated from 2000 onwards through agencies and autonomous administrative authorities, has made this worse. Nobody is responsible for the total result any longer. The Ministry of Education sets education policy, its executive agency DUO implements it, and nobody feels ownership of the chain. With 11 billion euros in annual funding for higher education, not a single official in that chain can explain on one sheet of paper how the funding formula actually works.

The political-administrative short-term dynamic

This administrative architecture interacts destructively with political incentives. For ministers, the incentive to ignore problems is strong: intervening means negative publicity, lost time and spent political capital. Passing the problem on means the bomb goes off under your successor, possibly in a different cabinet. For civil servants, the incentive to report problems is weak: whoever warns of costly legal risks is seen as an obstacle to political ambition. The messenger is punished, not the message.

This explains why, in every one of the cases above, lawyers and specialists warned years in advance, yet the signals either never travelled upwards or were ignored. The civil service counterweight — the capacity to confront ministers with uncomfortable facts — has been systematically eroded. Civil servants of integrity who hold to the rule of law are promoted sideways or moved on. Those who go along make careers.

The cost explosion of stacking and shifting

On top of this ownership problem comes the cost factor of administrative complexity and financial shifting between domains. The Netherlands has 342 municipalities, 21 water authorities, 12 provinces, hundreds of joint arrangements (gemeenschappelijke regelingen, the standard Dutch vehicle for inter-municipal cooperation) and dozens of executive agencies. Citizens stack benefits, subsidies and schemes that are processed in fifteen different systems. The Social Support Act (WMO), which makes municipalities responsible for care support at home, alone comes in 342 implementation variants.

More serious than the fragmentation, however, is the systematic shifting of costs between budget holders while nobody watches the total. Municipalities push their more expensive WMO clients through to the Long-Term Care Act (Wlz), because that scheme is paid from a different pot. Wlz waiting lists rose from 15,000 (2020) to 23,000 people (2024), with mounting care costs nobody had budgeted. Municipalities push young people with disabilities out of the Wajong, the national benefit scheme for those disabled from a young age, towards municipal social assistance, because that is forty per cent cheaper. UWV pushes the chronically ill from occupational disability insurance (WIA) towards social assistance, because the benefit burden there does not count in its performance agreements.

The perverse effect: people in the Wajong who could work no longer dare to accept a job. If it fails, they fall back to social-assistance level rather than Wajong level — an income loss of thirty per cent. The system that is supposed to encourage participation punishes it. Nobody is responsible for these effects, because they cross domain boundaries. The Ministry of Health measures Wlz costs, the Ministry of Social Affairs measures Wajong costs, the Ministry of the Interior measures municipal spending. Nobody measures the sum, let alone the social damage.

This stacking drives up three cost categories: direct implementation costs (every layer adds overhead, IT, coordination), error costs (complex schemes produce mistakes that must later be corrected), and social costs (citizens who get stuck pay in missed opportunities, health and prosperity). The last category is never measured, but it is probably larger than the direct government costs.

What does work: integrated approaches with ownership

There are exceptions that show it can be done differently. Since 2022, alderman Pieter Paul Slikker in ’s-Hertogenbosch has given homeless people a home directly through Housing First, without requiring them to become “housing-ready” first. The result: 57 per cent of participants still have a home after two years and gain a prospect of work. The approach is cheaper than the carousel of shelter, guidance and relapse that other municipalities operate. It works because one alderman owns the entire trajectory and takes political responsibility for a long-term solution. He does not just arrange housing; he makes sure care, debt assistance and work guidance run in step. Not mopping with the tap open, but turning off the tap.

Internationally, Denmark shows what integrated ministerial responsibility can do. Danish ministries are narrower but execute their own policy, which makes the minister directly answerable for results. There are no agencies buffering policy from execution. The Swedish system does have agencies, but gives them extensive autonomy with clear accountability for results, and ministries cannot intervene in individual cases. Both models prevent the Dutch problem: claiming responsibility while taking no ownership.

Directions for a solution

The Netherlands has the knowledge, the means and the experience to turn this around. What is missing is political will and administrative courage. Four structural interventions are necessary.

One: reintroduce long-term ownership. Key officials must stay in post for at least six years. Secretaries-general and executive directors become personally accountable for legal and financial risks in their domain. This also means: when they warn of risks and the political level ignores the warning, that fact is documented and published.

Two: restore the civil service counterweight. Lawyers and risk managers must report directly to the most senior civil service leadership, not to policy departments. Their warnings are recorded in a public risk register. Ministers who set aside registered risks sign for that decision personally. When problems surface later, it is clear who decided what, and why. Whoever punishes the messenger is punished in turn.

Three: stop cost-shifting between domains by introducing integrated domain responsibility. Make central government responsible for the entire life domain of income and income support: Wajong, WIA, social assistance, benefits — everything that concerns income under one budget holder. Make municipalities responsible for the entire life domain of youth, education and care: youth care, education, WMO and Wlz. No more passing costs to another budget line or layer of government. This sounds radical, but it is the only way to break the perverse incentives. If a municipality is responsible for both WMO and Wlz, the incentive to push expensive clients through disappears. If central government is responsible for a person’s entire income trajectory, the incentive to push people from Wajong to social assistance disappears. Introduce, in addition, a compensation duty: where layers of government or departments do shift costs onto each other, the shift must be explicitly compensated through a settlement system.

Four: simplify radically. National baseline standards for the implementation of the WMO and the Youth Act, with municipalities allowed to deviate only on substantiated grounds. Joint arrangements only where demonstrably cheaper than a municipality’s own delivery. Replace the benefits system with direct payments where possible. Not 342 variants, but one approach with local refinement where needed.

The choice

The core of the problem is not the quality of individual civil servants or ministers. It is a system that rewards nobody for prevention and punishes everybody for intervening. A system in which stopping the mopping while the tap is running is politically unsellable, because the voter sees tomorrow’s flood but never the damage that was prevented.

This is not a technical problem but a political-administrative one. The solution requires ministers willing to subordinate their own political interest to the public interest, and senior civil servants who dare to say that the emperor has no clothes. The past thirty years have proven that we cannot do this collectively. The question is whether the coming tens of billions in avoidable costs will provide impulse enough to do it after all.

I still do not understand how anyone stays optimistic once they know how it works. But I try. Because the alternative — accepting that the Netherlands is a permanent recovery state — is too depressing to contemplate.

In depth: the Youth Care Availability Improvement Act as a test case

Testing the new law against the criteria formulated above.

The Youth Care Availability Improvement Act (Wet verbetering beschikbaarheid jeugdzorg) was passed by the Senate in October 2025 and entered into force on 1 January 2026.³ Some background: since 2015, Dutch municipalities have been responsible for youth care. The new law obliges them to cooperate regionally in 42 youth care regions through joint arrangements, with regional procurement of specialist youth care and national procurement of highly specialist care. The Dutch Healthcare Authority (NZa) is given oversight of availability and early-warning signalling. Providers must meet requirements for sound financial management. Municipalities must draw up a regional vision.

How does this law score against the yardstick formulated above?

Where the law offers opportunities

Reduced fragmentation. Moving from 342 municipalities each procuring separately to 42 regions is substantial consolidation. It reduces the administrative burden for providers, who no longer need 342 contracts but 42. Less variation in accountability rules, uniform contracting within regions. The law compels what ten years of voluntary cooperation could not achieve.

Ownership at regional level. Joint arrangements create a legal owner: the youth care region. No longer fifteen municipalities each doing their own thing. The mandatory regional vision forces municipalities to make explicit what they want to achieve.

The NZa as early warning. At last an independent body that signals risks before a court has to intervene. This is a fundamental improvement on the pattern of ignoring signals until legal compulsion.

Financial transparency. Requirements on governance and annual accountability of providers are meant to prevent providers going bankrupt and children being left without care. That is preventive action.

Where the law reproduces the problems

No ownership of the child’s total life domain. The law organises only the procurement of specialist youth care and leaves the domain split fully intact. Youth care sits with the municipality (through the region). Education sits with central government. Youth mental health care sits partly with municipalities, partly with health insurers. Long-term care for severe multiple problems sits with central government. The pass-the-parcel problem remains untouched. Worse: regional procurement makes it harder to trace which municipality is shifting what.

Stacking of administrative complexity. The law adds a layer of government without removing any. The 342 municipalities remain. 42 youth care regions are added, often as public bodies with their own overhead. Existing joint arrangements, for social services for instance, remain. Sub-regions must coordinate among themselves for highly specialist care. The result is not less stacking but more. The costs of overhead, coordination and alignment rise.

No long-term ownership by people. The law regulates structures, not who is responsible for continuity. Aldermen change, youth-region directors are new positions, municipal chief executives stay four years on average. Five years from now, nobody who is setting up today’s joint arrangement will still be in post. The short-term pattern persists.

The political-administrative dynamic unchanged. The law compels cooperation but does nothing about the perverse incentives. Municipality A wants to invest in prevention — expensive in the short term. Municipality B wants to procure cheaply — savings now. The joint arrangement requires consensus, so the lowest common denominator wins: cheap procurement, no prevention. The civil service counterweight is absent. There is no independent official who can say this is going wrong legally or financially, and who is protected for saying it.

No integrated domain responsibility. If you apply the principle that municipalities should be responsible for youth, education and care including long-term care, this law solves nothing. It organises the procurement of specialist youth care, not the whole life domain. A child with behavioural problems needs youth care, appropriate education and medication. Youth care runs through the youth care region, education through the school board, medication through the health insurer. Nobody is responsible for the child’s total trajectory.

The costs of cost-shifting invisible. The law has no mechanism to measure whether municipalities push their more expensive cases through to long-term care. The NZa looks at the availability of youth care, not at where children disappear to when they drop out of view. No compensation duty between budget holders.

Democratic legitimacy unclear. Joint arrangements carry indirect democratic legitimation. Smaller municipalities in an arrangement with a large central municipality have less say but pay along. There is no direct accountability of the youth region’s governing alderman to the council of an individual municipality. An exact reproduction of “nobody in the chain can explain who decides what”.

Conclusion: symptom control instead of system repair

The law scores well on consolidation (less fragmentation), early warning (the NZa) and the financial transparency of providers. It scores badly on integrated domain responsibility, long-term ownership, the civil service counterweight, the costs of stacking, and the perverse incentives to shift costs.

The law is symptom control (organising procurement) instead of system repair (ownership of the child’s whole life domain). It is an extra administrative layer on top of existing complexity. Five years from now we will have 42 youth care regions that all work differently, and nobody responsible for a child’s total trajectory.

The law reproduces exactly the pattern described above: good intentions, fine structures on paper, but without ownership, without a civil service counterweight, without integrated responsibility. It is mopping with the tap open — with 42 different mops.

Encore: why more civil servants do not improve quality

The logic of a system that has seized up.

The Youth Care Availability Improvement Act requires extra capacity: quartermasters for 42 youth care regions, policy officers for regional visions, lawyers for joint arrangements, controllers for financial accountability, and NZa staff for oversight. Municipalities ask for structurally more staff, and central government adds temporary implementation budget to the Municipalities Fund.

This seems logical: more tasks mean more people. But in a system that has seized up, it leads mechanically to more overhead without any improvement in quality.

Coordination overhead grows exponentially

Previously, 342 municipalities each procured independently. Every municipality had a youth policy officer, a procurement officer, a contract manager. Now there are 42 regions plus 342 municipalities. Every municipality keeps its own structure, because it remains ultimately responsible, but a regional layer with its own staff is added. Plus: municipalities must align with one another.

A region of ten municipalities used to have ten policy officers working independently. Soon: ten policy officers at municipalities, plus three staff at the regional bureau, plus two for alignment. Productivity per official falls, because half the time is spent in meetings between municipalities, aligning divergent visions, reporting to municipal councils and to the general board of the joint arrangement, and accounting to the NZa.

More people, but less time for the actual work: helping children. The extra staff produce no care, only meetings.

Nobody holds final responsibility, so nobody decides

When ten aldermen in a region disagree about the regional vision, who decides? The general board of the joint arrangement. But that board consists of the same ten aldermen.

The consequence: decisions are postponed until consensus is reached. Consensus means the lowest common denominator, a half-baked compromise nobody is happy with. Civil servants write memos, scenarios, advisory notes, but nobody takes a decision. More civil servants are needed to write more memos explaining why there is no decision yet.

Municipality A wants to invest in prevention, expensive but effective in the long run. Municipality B wants to save, cheap in the short run. The civil servants write three scenarios: full commitment to prevention (A pleased, B refuses), cheap procurement (B pleased, A refuses), a hybrid model (A and B both dissatisfied, but able to live with it). The hybrid model wins, but requires double administration. You now need more civil servants for a worse result.

Complexity forces specialisation, specialisation prevents integration

The law introduces regional visions (policy officer A), joint arrangements (lawyer B), financial accountability of providers (controller C), NZa reporting (data analyst D), procurement (buyer E), contract management (contract manager F). Each specialism gets its own staff. But the child’s problem does not sit in any single specialism. It sits in the connection between education, care, youth and income.

Policy officer A writes the regional vision without knowing what buyer E has agreed. Controller C sees that provider X is in financial trouble, but lawyer B has already signed a contract. Data analyst D reports to the NZa that availability is falling, but nobody has the mandate to intervene.

You now have six specialists, but no generalist with the overview who can say: this is going wrong, we must act now. That generalist ought to be the municipal chief executive. But the average chief executive stays four years and rotates to another post before the problem explodes.

The system produces work to justify itself

In a well-functioning system, civil servants serve the public purpose: children receiving care. In a system that has seized up, civil servants serve the system itself: reports, accountability, procedures.

The NZa asks municipalities for availability data. Municipalities have no uniform registration systems. Project leaders arrive to help municipalities adapt their systems. Those systems require training, so trainers arrive. The systems clash with one another, so IT coordinators arrive. The IT coordinators report to a steering group. The steering group needs a secretariat. The secretariat writes minutes nobody reads.

After two years: fifteen extra staff, not a single additional child helped. But: perfect reporting to the NZa showing that availability has not improved.

Political cover requires administrative buffers

Back to the core analysis: ministers and aldermen pass problems on, civil servants who warn are promoted out of the way.

In youth care: the alderman wants no negative publicity about waiting lists. The civil servant must report that waiting lists are growing. The alderman asks whether that could be framed more positively. The civil servant writes that work is under way to improve access, instead of reporting that 107 children have been waiting longer than six months. The NZa asks how many children are waiting. The municipality sends a lawyer to explain why the question is not legally well put. The NZa reformulates the question. The municipality sends a policy officer to explain that “waiting” depends on definitions. The NZa asks for the definition. The municipality convenes a working group of ten municipalities to align the definition. The working group needs a chair plus a secretariat.

After a year: five extra staff, still no answer to the question. But everyone is covered. Nobody can say the civil servants did nothing.

The fault is in the architecture, not the capacity

The core problem is not a shortage of people but a shortage of ownership and integration. More people inside the same defective structure amplify the defects.

Picture a house with a leaking roof. Water comes in. You can repair the roof — the structural solution. Or you can put out more buckets — symptom control.

The Youth Care Availability Improvement Act chooses buckets. And when the buckets fill up? Then you hire more people to empty them. Those people need coordination (who empties which bucket?), administration (how much water was in each bucket?) and accountability (why did bucket 3 overflow?).

After five years: fifty people busy with buckets, the roof still leaking, and nobody daring to say that perhaps the roof should be repaired. Because the roofer — the official with substantive expertise — left for another municipality after two years. His successor does not know the history. The alderman who let the roof leak now sits in the House of Representatives. And the new alderman says he has only just arrived and can hardly be held responsible for his predecessor’s decisions.

Synthesis: why is this logical?

It is logical within the wrong logic of the system.

Politically: passing problems on is rational. It costs you nothing; your successor pays. Administratively: going along is rational. Warning means career risk; going along means promotion. Structurally: nobody owns the system, so nobody can stop it. Budgetarily: extra money comes from general funds, costs are diffuse, nobody feels the pain directly.

Every rational individual follows the incentives, and collectively they produce an irrational system that feeds itself.

This is not a failure of people. It is successful functioning within a dysfunctional system. The civil servants do exactly what is expected of them: follow processes, account for their work, seek consensus. That in doing so they fail to achieve the original goal — helping children — is not a bug. It is a feature of the system.

The core analysis stands: this is a recovery state. We do not repair the system; we repair the damage the system causes. And that takes civil servants. Ever more civil servants. Who can change nothing, because the system does not reward them for change.

That is the tragedy.

Jacob Huibers is an interim manager with more than twenty years of experience in the Dutch public sector. He has worked as cluster manager, cluster director and quartermaster at municipalities ranging from fifty thousand to over two hundred thousand inhabitants, and at inter-municipal collaborative bodies across the social and physical domains. Statecraft is his platform for strategic reflection on public-sector execution, pillar IV of House of Viridian.

Responses and counter-arguments via Statecraft.nl.

The sum follows the Statecraft position paper Recovery State Netherlands (2025), pp. 3 and 6: childcare benefits affair (7 billion), Box 3 (11 billion), Groningen (50 billion), UWV reassessments (estimated 10 billion) and nitrogen (estimated 25 billion). This piece is the edited publication version of that position paper. ↩
The Senior Civil Service (Algemene Bestuursdienst, ABD) was established in 1995; Benita Plesch was its first director-general. The quotation concerns the later extension of the ABD system to virtually all senior positions in central government. ↩
Wet verbetering beschikbaarheid jeugdzorg (Youth Care Availability Improvement Act), Bulletin of Acts and Decrees (Staatsblad) 2025, 283. ↩