Case Study

Wellbeing emphases in Iceland

Six societal wellbeing priorities

In 2019, Iceland introduced a framework of 39 wellbeing indicators, based on a broad consultation process. The framework led to the identification of six societal wellbeing priorities that serve as the basis for the development of the government’s five-year fiscal strategy and annual budget. The six priorities focus on:

Mental health
Housing security
Active study and work
Carbon-neutral future
Flourishing innovation
Better communication with the public.

The priorities form the basis for discussion of the ministries' 35 policy areas in the Medium-term Fiscal Strategy and budget allocation has been shifted towards the achievement of these goals [1].

What this means in practice [3]

Since 2019, budget appropriations for mental health have been significantly increased. In addition, part of the provisional funding allocated to projects that support mental health and prevention during the COVID-19 pandemic was made permanent. Alongside these programmes, the Icelandic Government recognises the importance of further strengthening preventative work, for instance, by reducing all forms of violence and supporting leisure activities, sports, arts and culture, as well as other factors influencing work-life balance.
The Icelandic Government has responded to housing problems in consultation with social partners, including by increasing the supply of social housing and amending the Housing Act to offer participation loans for first-time buyers. At the end of 2023, the Icelandic parliament Althingi approved a Parliamentary Resolution on a housing strategy for 2024-2038, together with a five-year action plan for 2024-2028, which are coordinated and aligned with other policy areas, such as Infrastructure and regional policy.
Policies in this area focus on reducing the school dropout rate as well as offering support to young people who are not in education or employment and are at risk of social isolation. Another stream of work aims to promote a more equal gender ratio in certified trades, as well as the number of young people who choose vocational and technical education after compulsory school. The government also emphasises the promotion of equality and sex education and violence prevention in schools, as well as providing employees in the labour market, older people and those with reduced working capacity with opportunities for study and employment.
Addressing environmental and climate challenges is a priority for the Icelandic government. Iceland has set itself the target of a 55% reduction in net greenhouse gas emissions (compared to 1990) by 2030 and a statutory target of carbon neutrality no later than 2040. Central in this plan is the government's emphasis on completing the energy transition in the next few years, focusing on air, land and maritime transportation. The target is to have a ratio of renewable energy in transport of at least 40% by 2030. The government has also set a target of a fossil fuel-free Iceland by 2050, with sustainable energy playing a key role.
In April 2023, a new Act on the Science and Innovation Council entered into force. The objective of the new Act is to strengthen long-term strategic planning in science and innovation by taking a holistic approach to the issue and strengthening collaboration and coordination between ministries. In addition, a Ministry of Higher Education, Science and Innovation was created at the beginning of 2022. The new ministry provides an opportunity to work on comprehensive analyses and gain better oversight of the support system for science and innovation in Iceland. In recent years, funding to universities, competition funds and allocations for the reimbursement of R&D costs of private sector companies have considerably increased.
Following proposals of the Prime Minister's working group on strengthening trust in politics and public administration from 2018, efforts are underway to strengthen democratic consultation with the public.