1. Introduction

1.1     The Consultation Institute‟s Briefing Paper 21 outlined the issues for the Coalition Government to consider in conducting its forthcoming consultation regarding the overall spending review. Many of the same issues will need to be considered at a local level when local authorities and their partners have to face the implications of their own reduced settlements and consequent budget decisions.

1.2     Local authorities in particular have a long history of undertaking Budget and Council Tax consultation exercises, although the practice has by no means been universal. This year‟s round of consultation is likely to be harder than ever. As resources are squeezed the pressure on local agencies will be greater – community activists and lobbying groups will be actively preparing to protect their own areas. The process will be harder too, with a greater need than ever to ensure that consultees fully understand the complex wider implications of the trade-offs and decisions that are being made.

1.3     This paper will review the history of Budget and Council Tax Consultation and consider what learning needs to be applied to the current set of circumstances. It will also explore the possible pitfalls that may be faced by local agencies as they do their best to balance the views that they are

likely to hear vociferously voiced in their communities, as the cuts begin to bite.

2. The History of Local Public Services Budget

Consultation

2.1     Many local public service organisations have been running an annual cycle of budget consultation for more than a decade. During the years of the Labour administration, Government guidance and performance

assessment processes created a clear push for this practice. The 2001

White Paper stated the position very clearly:

It is … in local authorities‟ own interests to establish their taxpayers‟ views on council tax increases before they take budget decisions. Evidence of how an authority has engaged local taxpayers in these difficult trade-off decisions will be an important part of the authority‟s performance assessment.1

2.2     The ODPM (as was) published guidelines for local authorities on Budget and Council Tax Consultation in 20022, based on reviews and case studies of approaches already in place around the country.

2.3     Local budget consultation has been undertaken in a number of different ways – large scale surveys, citizens’ panel surveys, focus groups, deliberative events, interactive websites and local referenda have all been used. In 2006 Delib, the providers of an online budget simulation tool, undertook a survey of public sector organisations about budget consultation3. The research, amongst 80 organisations, found that at that time the most popular methods for budget consultation were paper-based surveys and focus groups.

2.4     The Coalition Government‟s announcement about their forthcoming consultation regarding the national spending review was met with a degree of cynicism and some vocal criticism even from within their own parties. Local budget consultation exercises have also very often had criticisms levelled at them, as this recent example below illustrates:

1 Strong Local Leadership – Quality Public Services, TSO, 2001, ISBN 0 10 153272 p103

2 Council Tax Consultation – Guidelines for Local Authorities, TSO, 2002, ISBN 1 85112 581 7

3 The report can be found at:  http://www.delib.co.uk/resources/budget_consultation_report.pdf

“York‟s council chiefs have been accused of wasting public time and money after nearly 80,000 of their 92,000 budget consultation leaflets were not used. City of York Council spent £21,216 printing and distributing its 2009/10 budget consultation document, as it looks to balance its books for the next 12 months. But figures obtained by The Press show only 12,548 of the leaflets were returned, meaning nearly 80,000 went unused. On those that were sent back, the council had to pay £5,300 postage. A further 122 people took part online. Council leader Andrew Waller today defended the consultation, but Conservative leader Ian Gillies said it was “a total waste of time”, and said the money could have been better spent.” York Press, Monday 11th January 2010

2.4     This kind of criticism is not by any means unique to York and many such exercises have been questioned and even ridiculed over the years.

2.5     It seems that even the bodies undertaking budget consultation have historically had some doubts over the efficacy of the process. In the Delib survey the question was asked “From which consultation method(s) do you feel you gained the most useful information?” and the second most popular response to this question was “None.”

2.6     Nevertheless, for many local public service organisations consulting on the budget has become part of their regular annual cycle. This year, with the pressures mounting on public budgets, engagement and consultation with local communities about the decisions that need to be made, becomes arguably both more important and more difficult to get right.

3. Challenges

3.1     So, what are the difficulties and pitfalls that can occur when an organisation tries to undertake a consultation exercise on their budget? How might these be particularly manifested at a time when there is so much pressure on public finances? Below, we set out some of the key issues as we see them.

3.2    Cultural / political context

3.2.1  In Delib‟s 2006 survey of 80 public sector organisations, amongst those that did not conduct budget consultation in the previous year, the most commonly cited reason for this was “no political will to do so.” Budget decisions, for many councillors, are and should remain the sole domain of representative democracy. Councillors are elected to make these important decisions, and for some local politicians, other stakeholders and the public have no role to play in this process.

3.2.2  This view does not always arise from a general aversion to the idea of consultation. Rather, it is a widely held view that in a budget decision making process, those consulted are likely to offer only self interested perspectives. It is a Councillor‟s unique role to rise above this and to balance the interests of all of those in the community.

3.2.3  Consultation should make the Councillors‟ decisions easier, not harder. Consultation should be about providing councillors with more information in order to help them come to a judgement. If, however, politicians do not welcome this external input, it is unlikely to be worthwhile conducting an exercise to collate it. Organisations and individual politicians come from differing perspectives on this issue and whilst at The Institute we firmly believe in the power and importance of consultation; we fully recognise that the culture has to be right for a truly meaningful consultation to be undertaken. Where there is no genuine political will to listen, consultation will be worthless and, in actual fact, damaging to any future attempts at engagement.

3.3    Complexity

3.3.1  A major barrier to consulting the public and stakeholders regarding budget decisions is that the decisions themselves are so complex. There are two aspects to this at the local level:

3.3.2 Structural Complexity

Most members of the public do not fully understand local governance structures. The different tax raising and service responsibilities of councils in multi-tier areas are certainly not well understood. As a result, consultation about a particular council‟s budget in isolation, may be less meaningful and more challenging to construct. Even in unitary areas an authority is likely to be responsible for only part of the bill faced by the council tax-payer. There will also be precepts set by other elected local authorities there may be precepts from parishes, police authorities, etc. that will affect taxpayers‟ bills, but which are not the prime responsibility of the local authority that is leading the consultation exercise. All of this makes for a highly complex picture in terms of the parameters of the consultation.

3.3.3 Financial Complexity

Equally, the complexities of local public sector budgets are considerable. Local agencies are constrained in many ways about the choices they may make – having first to fund statutory services before any degree of choice comes into the equation. For many working in local public services, there is genuine concern that those who might be consulted on the issues cannot gain the necessary level of understanding to meaningfully engage with the issues and trade-offs that need to be considered.

3.4    Difficulties framing the consultation

3.4.1  This issue is very much akin to the one raised in our recent briefing paper

about the Government‟s overall spending review. It is universally accepted that there is no purpose to be served in asking people‟s views if a decision has already been taken. In a local context, just as is true in the national one, there may – before the consultation process can begin – be a number of firm commitments and pre-agreed priorities that the consulting organisation has little option but to support.

3.4.2  Wht makes consultation problematic is that the public (and stakeholder organisations) will not always be altogether clear about what has and has not been determined. One is then faced with the dilemma that the Government also faces of opening up the debate widely – in the knowledge that substantial elements of the consultation will be superfluous, or trying to narrow it down by pointing out what is and what is not open for discussion.

3.5    Timing

Timing presents some real challenges and is very commonly a problem for consultations. The essence of the problem for local budget consultations is that to consult early in the budget cycle gives people a greater chance to influence the broad priorities; but much less firm information about the

resources that are going to be available. Whilst if consultation is delayed

to the point where information about the true budget position becomes clearer, the scope for any influence over what should be done with the money is less; both in terms of the time available to consult and the range of options that remain open for consideration.

3.6    Representation / inclusivity

3.6.1  Always a challenge for consultors, it is reasonable to assume that local organisations announcing their intention to consult on their budget decisions at a time of such financial pressure, may find themselves overwhelmed with those wishing to lobby to protect the services they care most about. Fore-warned of the likely devastating nature of the cuts, all community activists and organisations are no doubt getting themselves ready for every such opportunity to fight their own corner.

3.6.2  Getting beyond these activists‟ opinions, whilst at the same time ensuring that their voices are included in the mix, will clearly be challenging. As well as finding ways to reach out to the broader public, local authorities and their partners will need to ensure that, as is always the case, they consider how to reach out to the seldom heard communities whose views can so easily be excluded. The role of expert stakeholders and partners will also be important.  Indeed the far reaching and broad implications of a budget consultation exercise really do mean that the full spectrum of interests within the local community needs to be given access to the process.

3.7    Balancing and Weighing the Responses.

3.7.1  The need for such broad inclusivity creates our final challenge – if such a wide range of views are to be canvassed, how can the full range of

potentially opposing views be weighed and considered in order for any final decisions to be made in a balanced manner?

3.7.2  This will not simply be a question of majority rules – the process will demand careful judgment and the consultor will need to consider how to balance the responses received from stakeholders and experts against the views of the wider population. In addition, responses received after a deliberative process will need to be considered alongside those received from more open, but less informed and considered methods.

4.  Getting it right.

4.1     Given all of these challenges, it could be argued that budget consultation exercises even at the best of times are amongst the most challenging to get right. How much more difficult might they be when there is so much pressure on public finances and so much more scrutiny and concern about the final budget outcomes? One reaction might be to take a similar view

to Nigel Lawson regarding the Government‟s consultation programme:

“we know perfectly well that the public will have a wide range of different views and anyhow it’s the government’s job to decide what is to be done.”

4.2       Whilst you might expect The Consultation Institute to advocate that consultation should always be undertaken when it comes to such vital decisions, we only do so where there is a real value to come from the process. In fact, we would strongly suggest that all local organisations think very carefully before planning a budget consultation and sit down to agree: What exactly can the public and stakeholders influence? If there is no clear answer or the answer is „nothing‟, whilst we might question why this is the case, we would strongly suggest that no consultation at all is better than a process that lacks genuine influence.

4.3     Assuming, however, that for many local agencies there will be a desire and a commitment to gather public and stakeholder views in order to influence the difficult decisions that need to be made, what will make for the greatest chance of a successful and fruitful exercise? There is no absolute blueprint to this and much will depend on the circumstances for each organisation, but we believe there are some basic rules of engagement for a process of this kind:

4.4    Adhere to Charter4 Principles

4.4.1  Authorities that can adhere to The Consultation Institute‟s Charter in

developing, delivering and analysing the results from their consultation

will have done much to ensure its ultimate success. The Charter has been developed based on many years of learning about what can go wrong when embarking on complex and contentious consultation processes and the seven principles of:

• Integrity
• Visibility
• Accessibility
• Transparency
• Disclosure
• Fair Interpretation
• Publication

form a benchmark against which any consultation may measure itself and assess its success.

4.5    Clarify objectives and scope

4.5.1  One of the most difficult aspects of this kind of consultation will be in defining exactly which aspects of the budget are within the scope of the consultation. There are essentially two possible approaches:

To consult on broad priorities and to use the feedback received as a guide to more detailed budget decisions.

To consult at a more detailed level where there is dilemma over actual lines of expenditure.

Pursuing one approach does not necessarily preclude pursuing the other and in fact there is a strong argument for undertaking consultation over a

number of phases – starting with broad priorities and principles and drilling down into the detail, as the picture becomes clearer.

4.5.2  Whatever the actual decision about the scope of the consultation the most important thing is that the scope is clear for consultees. Where elements

of the budget have already been decided, this should be made absolutely clear and the reasons for such decisions explained (under the guiding principle of „disclosure‟ within the Charter.)

4 See Appendix 1

4.6    Map the target audiences and reach out

4.6.1  Audiences of interest when it comes to local public service budgets are numerous and diverse. Just as we said about the Government‟s own consultation, listening to an appropriate range of voices is difficult enough; persuading everyone that you are doing so is even more challenging.

4.6.2  Whilst our call to Government was to bring in some external and independent advice to select the appropriate range of experts, this is unlikely always to be feasible at a local level. The important element here will be to map out the full range of stakeholders and key players within the locality as comprehensively as possible. This will be easier for some organisations with well organised stakeholder databases, than it will for others.

4.6.3  The Consultation Institute has identified a three stage process of identifying, profiling and mapping stakeholders which we have found works well and is valuable as a precursor to most engagement exercises.

4.6.4 Stage 1 – Stakeholder identification

This is not an exact science since in most cases the true test of whether a person or organisation is a stakeholder is a subjective rather than an objective one – that is to say if someone feels they have a stake, it is unlikely that a public body would refuse to engage with them. However, in identifying stakeholders there are six key questions that should be asked:

• Who is directly impacted by the issue?
• Who is indirectly impacted?
• Who might potentially be impacted?
• Who might help to tackle the issue?
• Who knows about / is an expert in the issue?
• Who else might have an interest in the issue?

By asking these questions it is usually possible to identify a long list of

stakeholders. In the case of local public sector budgets it is fair to say that few will be excluded.

4.6.5 Stage 2 – Profiling

This stage is useful to gain a better understanding of the identified long list of stakeholders. It is a process whereby the long list of organisations and individuals is developed into a fuller information database, containing not only contact details but contextual information outlining the nature of the stakeholders‟ interest in the issue and their known engagement preferences.

4.6.6 Stage 3 – Mapping

The third and most important stage is that of mapping. We see the purpose of this as enabling engagement activities and resources to be prioritised, ensuring that the most effort towards engagement is directed towards the stakeholders of most importance to the exercise in question.

Stakeholders are mapped against two parameters – the size of their stake

in the decision and the degree of influence that they already have over it. Those with a high stake and a high degree of power – for example local elected councillors will clearly be a very high priority for engagement. Those with a high stake but less pre-existing influence – e.g. wider

citizens – will need the greatest level of support from the consultor to have their say.

4.6.7  Stakeholder mapping of this nature allows the organisation to consider the range of different approaches it may need to take, to ensure a fully inclusive consultation process. The organisation will also be in a good position to identify where most effort will be required to reach out and engage effectively.

4.7    Build an ongoing dialogue process.

4.7.1  Severe budgetary constraints are likely to be a feature for local public services for at least the next five years and probably beyond. The scale of

the cuts is unprecedented and the ramifications will surely be felt in many areas. Consultation on the 2010/2011 budget cannot therefore stand as

an isolated exercise. Even once the next year‟s budget has been finalised,

there will be many further knock on issues to deal with and engaging communities and stakeholders in the solutions to problems caused by the withdrawal of statutory funds, will be a fundamental feature of The Big Society.

4.7.2  Many local agencies already have established mechanisms for ongoing, strategic-level public and stakeholder engagement. Budget consultation exercises may fit, for theses organisations, directly into their existing mechanisms. For those that do not have such ongoing dialogue processes established, thinking beyond a one-off approach to budget consultation and seeing this year‟s engagement as a start of a continuing dialogue will be, we believe, a helpful shift in approach.

4.7.3  Citizens or Community Panels are a particular form of continuous, on- going machinery that may have untapped potential for budget-related dialogues. ePanels can be used to gather the views of specific groups eg small businesses or young people. Although panels are not always representative of the public as a whole, they can be a useful sounding- board and are available without significant additional costs.

4.7.4  The challenges of the coming years will demand that local authorities and their partners from the private, statutory and third sectors will need to work much more closely together to fill in the gaps. The community will need to be on board too. Ongoing dialogue mechanisms will aid this continuous collaborative approach.

4.8    Begin now (or soon)

4.8.1  Clearly, the exact timing of a budget consultation will affect the kind of discussion that can be had. Consulting on the 2010/2011 budget right now would necessarily be a high-level priorities-based conversation, rather than a detailed set of trade offs and choices. Nevertheless authorities should start thinking about the consultation challenge now. Drafting the likely objectives and scope of the consultation, as well as mapping the wide range of stakeholders, will take considerable time and resources. The best consultations will be those that are prepared for well in advance.

4.9    Cover a range of methods – and include deliberation

4.9.1  Given the range of stakeholders likely to be interested in a consultation of this nature, it will clearly not be appropriate to take a “one size fits all” approach to the process. Participation by the general public needs to be

as open and accessible as possible – allowing those who wish to have their say, a space to do so. Modern social media such as Facebook may well generate their own local campaigns to persuade people to make submissions in favour of or against specific propositions. Local agencies could take the initiative and encourage the use of specific eParticipation sites to let individuals and organisations register their views – provided there are easy ways to acknowledge their participation and provide feedback.

4.9.2  Equally, it is likely to be important to reach beyond this self-selected process and engage a more representative cross section of citizens to have their say – this may be where citizens‟ panels are of most use.  One idea is to make wider use of Participatory Budgeting.  Increasingly used

for small grants and similar processes, the idea of inviting citizens in larger numbers to attend a budget-related deliberative event has many attractions. The main difference between convention Participatory Budgeting and what may now be considered is that decision-making

cannot be delegated – opinions expressed must be seen as „indicative‟ and their input „advisory‟.

4.9.3  Any meaningful engagement around complex budget decisions must incorporate genuine deliberation within at least some parts of the exercise. Budget decisions are not easy. Public finances are not well understood and there is a natural tendency for citizens and stakeholders to want it all. If at least some parts of the process of budget consultation are not designed to ensure that a process of informing and building

understanding is accomplished, prior to conulting and gathering opinions;

a trick will certainly have been missed.

4.9.4  Deliberative techniques allow citizens and non-expert stakeholders alike to understand the true nature of the difficult decisions that need to be made and to give their views in the light of this enhanced understanding. A consultation process where no deliberation is built in could be a waste of the very precious resources that organisations will be trying so

desperately to prioritise. The vital importance of deliberative processes was recognised as far back as 2002 when the then DETR’s Guidelines on Council Tax Consultation stated “there is general agreement that consultation over council tax and budget matters should involve deliberation by the public and stakeholders.”

4.10  Give feedback

4.10.1 There is one other absolute requirement that the consultor must fulfil the deliver of timely and honest feedback. This means publishing truthful

summaries of what has been said in the consultation – what the Institute calls Output Feedback. This must not be confused with an announcement

of what the consultor chooses to do as a result. The Charter principle of

Transparency requires everyone to have confidence that the consultor has heard what is said and in matters as difficult as budget decisions and cuts, this will be a true test of the quality of the process.

4.11  Independent oversight of the process

4.11.1 There is no doubt that some of the decisions that local agencies will need to make about their budgets are going to be highly contentious. For all the talk of protection of front line services, communities cannot help but feel the effects of the level of budget reduction we are likely to see. One of the easiest ways to cast doubt on the validity of difficult decisions will be to criticise the credibility of the consultation exercise undertaken to feed into these decisions. Local agencies may well benefit from some external and independent input and over-sight of their consultation approach, as a way of ensuring that their processes are beyond reproach.

 

5. Summary

In summary, The Consultation Institute believes that the immense challenges that will be faced by local public services in setting their budgets for next year represent a very real and challenging opportunity to instil a new culture of high quality engagement and consultation. It is vital that those who will be affected by the cuts (all of us) are given a chance to have our say wherever and whenever there is a genuine opportunity to influence decisions.

A successful process of consultation on local budget decisions will incorporate:

• Adherence to The Institute‟s Charter
• A clear scope and objectives
• Mapping and reaching out to all target audiences
• Building an ongoing dialogue process
• An immediate or imminent start to the process for 2010/11
• A range of methods, crucially including some form of deliberative process
• Provision of output feedback
• Independent oversight

 

Biography:

Rachel Lopata has 20 years of varied experience in market and social research. She has extensive quantitative and qualitative research experience having

worked at Director level for two major market research agencies, ORC International and Opinion Leader Research, before setting up her own consultancy, Community Research. She also worked for six years in a local government policy and research role.

Whilst broadly experienced in a range of research approaches, Rachel‟s particular area of expertise is deliberative events. She has developed, designed managed and facilitated some of the most high profile deliberative research and consultation exercises ever seen in the UK including the National Pensions Debate, The Prince of Wales’ Business Summit on Climate Change and Sky‟s „The Bigger Conversation‟.

Her recent clients include a number of local authorities and health trusts as well as Arts Council England. She recently helped Leicestershire County Council to develop their approach to participatory budgeting, in which she also takes a keen interest.

Appendix 1: The Consultation Charter

The Consultation Charter is intended to act as a Best Practice reference for all who are involved in public or stakeholder consultations

• It includes important definitions and illustrates their application
• Most importantly, it establishes Seven Key Principles by which individual consultation exercises and consultation programmes can be measured. These principles are already used by the Institute to evaluate consultations, and will form the corner-stone of planned accreditation schemes

Principle One:      The INTEGRITY of consultation

The consultation must have an honest intention.  Consultors

must be willing to listen…and be prepared to be influenced…

Principle Two:     The VISIBILITY of consultation

All who have a right to participate…should be made reasonably aware of the consultation

Principle Three:   The ACCESSIBILITY of consultation

Consultees must have reasonable access…using methods appropriate for the intended audience…with effective means to cater for hard-to-reach groups and others

Principle Four:     The TRANSPARENCY of consultation

Consultation submissions will be publicised unless specific exemptions apply.  Freedom of Information Act requests can now be used to disclose data previously kept hidden.

Principle Five:      The DISCLOSURE of consultation

Consultors must disclose all material information; consultees must disclose significant minority views when representing many parties

Principle Six:       The FAIR INTERPRETATION of consultation

Objective assessment, with disclosure of weightings if used

Principle Seven:   The PUBLICATION of consultation

Participants have a right to receive feedback of the consultation output and of the eventual outcome of the process By observing these principles, organisations demonstrate their commitment to Best Practice and to assisting stakeholders to participate fully in the process.

This is the 22^nd Briefing Paper; a full list of subjects covered is available for Institute members and is a valuable resource covering so many aspects of consultation and engagement