With a growing elderly population the age structure of the Swedish society is expected to change. Consequently, the need for service and elderly care has increased and municipalities are faced with the challenge with providing for the needs of elderly people based on better utilization of resources. The new law about freedom of choice system (LOV) allows for competition in the home help sector. Can competition according to LOV lead to an increased utilization of resources and greater efficiency in the municipal home care business? The aim of this paper is, therefore, to explain how the competition in the home care sector, according to freedom of choice, affects municipal efficiency. We also aim to explain how management control in the municipality affects the efficiency of the introduction of the choice system.This study has a positivist research philosophy, a deductive research approach, an explanatory purpose and a quantitative method. Although the freedom of choice system is a relatively unexplored area, the hypotheses are based on previous research on competitive conditions in primary care. The foundation of the study is two theoretical models used to demonstrate different contexts. Therefore, the construction of the hypotheses was based on the existing research on the effects of exposure the business in public sector to competition.The empirical study is based on a comprehensive survey made on the 82 municipalities with freedom of choice system running. The conclusion is that competition of home care activities according to LOV leads to increased efficiency. In the same way performance-based compensation leads to increased efficiency. In addition a clearer and more successful management control leads to increased efficiency when introducing the freedom of choice system.