Introduction – 3

Definitions of Participatory Budgeting – 3

Background – 4

Characteristics – 5

The UK experience – 7

Opportunities & Challenges – 9

Is it right for us? – 12

Is a freelance consultant specialising in the new public services agenda on issues such as Local Strategic Partnerships, Local Area Agreements, public engagement and learning from examples overseas.  He is one of the Consultation Institute’s Approved Trainers and Consultants.Davy Jones

Previously, he worked for eight and a half years at the Audit Commission – most recently, leading the Public Engagement and Reporting work stream for the new Comprehensive Area Assessment, and previously leading on the Area Profiles project, Quality of Life indicators and the statutory performance indicators for local councils. Before that he worked for three London councils – Islington, Lambeth and Hackney – in both corporate and housing policy, and in the campaigning and voluntary sectors.

Introduction

Suddenly everyone is talking about Participatory budgeting!

But like many overnight successes, this has been a long time coming, and reflects much patient hard work by many enthusiasts over several years.

The cause of its recent popularity is not hard to find. Last year’s Local Government White Paper – Strong & Prosperous Communities referred positively to it, and at this year’s LGA Conference, Hazel Blears announced a national programme of 10 local authority areas1 to pilot Participatory Budgeting (PB).

This Consultation Institute briefing provides professional public engagement & consultation staff, elected members and other interested parties with a concise description of the concept, descriptions of the key characteristics of PB and a summary of pilot activity in the UK to date. It also offers some ideas of the opportunities and challenges that lie ahead.

Definitions of Participatory Budgeting

PB is a method pioneered in Brazil to involve local people in deciding how local public service budgets should be spent.

There are various definitions of Participatory Budgeting:

• “A mechanism of local government, which brings local communities closer to the decision-making processes around the public budgetರ (UK PB Unit2)

• “ A mechanism or process through which the population decides on, or contributes to decisions made on the destination of all or part of the available public resources.” (UN Habitat)

• “A process of direct, voluntary and universal democracy, where the people can debate and decide on public budgets and policyಹwhich combines direct democracy with representative democracy.” (Ubiratan de Souza – Porto Alegre)

1 Birmingham, Bradford, Lewisham, Manton in Nottinghamshire, Merseyside, Newcastle, Salford, St Helens, Southampton, Sunderland,

2 The Participatory Budgeting Unit UK is based in East Manchester and was set up by Church Action on Poverty . More details can be found at: www.participatorybudgeting.org.uk

Background

Brazil was under a military dictatorship from 1964 to 1985. Porto Alegre, a southern city of around 1.4 million people, was the home of resistance to the military. Huge social movements developed in response to the dictatorship – trade unions, peasant movements, neighbourhood associations etc. And also a large socialist party – the PT or Workers Party led by Lula, who is now the Brazilian President!

The social movements were very influenced by a Brazilian philosopher and dissident Paulo Freire, whose philosophy of education was summed up as: “people become aware of their power together to create something new as they overcome what is oppressive – that is the foundation of participatory politics.” When the military dictatorship finally ended, Participatory Budgeting was seen as a way of opening up local government to citizens.

Despite this highly specific origin, PB has developed into an internationally recognised approach to involving local people in deciding public priorities and budgets.

There are three discernible phases of development:

• From 1989 to 1997 around 40 Brazilian cities experimented with PB, with Porto Alegre and its broader region Rio Grande do Sul, at the centre of the movement;

• From 1997 to 2000, PB was consolidated in over 140 cities in Brazil, and spread to selected areas in Latin America and Europe;

• From 2000 onwards, PB was exported worldwide and is now practised in different guises in over 300 towns and cities internationally (including in Argentina, Uruguay, Bolivia, Spain, Italy, Germany, France and Canada). It is estimated that around 12 million people live in places that use some form of PB.

An important factor is the extent of endorsement for PB from prestigious international institutions such as the UN, UNESCO and the World Bank. In the UK, PB has now been officially recommended by both the Department for Communities and Local Government (DCLG) and by the Department for International Development (DfID) and there have been a number of experiments and pilots with PB in the UK – mostly co-ordinated by the PB Unit. (For these, see below.)

Characteristics

While PB comes in many shapes and forms, the “classical” PB model as developed in Porto Alegre features seven key characteristics:

• Citizen involvement in priorities/budget decisions

Citizens are involved in local neighbourhood assemblies open to everyone.

While these may initially be small, over time, as people realise that real decisions on projects and money are being taken, more and more people get involved. In Brazil, this has led to the neighbourhood assemblies including higher proportions of women, the poor and indigenous people. The assemblies choose priorities, services and budgets – and these choices may be based on geographical areas (neighbourhoods, cities, and regions), sectors and themes (health, housing, sanitation and environmental issues) or issues related to specific citizen groups (older or younger citizens). Usually, the local neighbourhood assemblies make recommendations and send delegates to city-wide meetings. The city-wide meeting in turn elects a Budget Council that works with the elected members and council officers to implement the decisions of the PB process.

• Annual cycle of budget/priorities

PB works on an annual cycle linked to the council’s budget timetable. First, there are neighbourhood meetings or assemblies reviewing progress on the implementation of the previous year’s decisions, and mapping out initial priorities for the next year. Then there are city-wide meetings of neighbourhood delegates to collate the choices from all the local meetings. These city-wide meetings come up with definite proposals for budget allocations and projects for implementation.

• Budget matrix to link need to citizen choices

Traditionally, there is a set of budget rules (a budget matrix) agreed by local citizens as part of the PB process. These rules agree to use certain objective criteria such as population size, deprivation and sometimes even participation levels, to weight the allocation of money to those areas most in need. They link to citizens’ choices to produce precise budget allocations to particular neighbourhoods and citizens groups. The overall Budget Council works to ensure that the allocations reflect citizens’ choices and the budget rules as closely as possible, given that the different projects may sometimes be based across neighbourhoods or even at city-wide level.

• Starting “small” with investment money

Generally, the size of the budget subject to PB is very small initially (often as little as 1% or less of the council budget) and grows over time as citizens and councillors build up trust and confidence in the process. We are not talking about hundreds of millions of pounds being allocated by half a dozen people who have bothered to turn up to a local community hall on a wet Thursday evening! (though in a few places such as Mundo Novo in Brazil, the entire council budget is subject to PB). Usually, the PB “pot” is found from new investment funds (the equivalent of council capital programmes in the UK) rather than from ongoing revenue budgets.

Even in Porto Alegre, after two decades of PB only around 17% of the council budget is subject to PB

• Transparent process open to all

Even in Porto Alegre, after two decades of PB only around 17% of the council budget is subject to PB  The process is entirely open and transparent – which is why the World Bank and the UN have praised the use of PB in developing countries. It also builds up trust between politicians and citizens as people, after experiencing what they perceive as years of having their views ignored, see their decisions being translated into real projects and services on the ground. PB goes beyond “the usual suspects” and as news spreads about the process, increasing numbers of people seek to get involved. In Porto Alegre, over 50,000 people attend neighbourhood assemblies as part of the PB process.

• Capacity-building for active citizens

There is a clear recognition that it is not realistic to expect local citizens to be able to participate in a meaningful and informed way in such discussions without extensive capacity-building. This includes out-reach community workers to mobilise attendance at the neighbourhood meetings. There is also a budget literacy campaign aimed at informing local people about how public budgets work and are allocated. In addition, there is usually a dedicated council team to co-ordinate the overall process and to ensure that citizens receive the necessary technical support for their budget proposals.

…..a budget literacy campaign aimed at informing local people about how public budgets work and are allocated.

 

• Interplay between representative and participatory democracy

The Budget Council elected by citizens draws up a detailed budget for the investment “pot” and liaises with council officers to ensure that the budget is technically feasible. Nevertheless, elected councillors still take the final decisions on the budget, albeit carefully considering the outcomes of the PB process. Councillors need to have the political will to introduce PB in the first place, and to implement its decisions, especially as these may not always coincide with the views or priorities of councillors.

It requires a high degree of political maturity for councillors to negotiate this interesting interplay between representative and participatory democracy. Certainly in the UK, PB would be likely to challenge some traditional views of the role of elected members.

Councillors need to have the political will ……. especially as these may not always coincide with the views or priorities of councillors.

PB comes in many forms and does not have to follow the “pure” Porto Alegre model. Around the world it has been adapted and cities have experimented with different approaches. For example, in three areas of Paris there are very different PB-type models in operation:

• Bobigny: citizens assemblies make budget recommendations to the council and use citizen inspectors to assess progress;
• St Denis: citizens’ budget proposals negotiate with the council’s own proposals, and fit within a broader consultation on regional budgets;
• Issy-les-Moulineaux: LSP-type neighbourhood committees use internet voting to elect the neighbourhood committees.

The UK experience

In the UK, there have been PB experiments in Bradford & Keighley, Harrow, Newcastle, Salford and Sunderland. All of these, except Harrow were co-ordinated by the UK PB Unit.

Bradford Vision, the Local Strategic Partnership, had carried out a number of participatory events before coming across PB. In 2004, it held an event to distribute £300,000 of money on “safer, cleaner and greener” projects. Local community groups were invited to develop projects and to bid for the money. All the bidding groups were invited to a day-long event where each project was presented and assessed by the other groups.

Those scoring the highest from the voting process were funded. Those successful were invited to “give back” some of the money to allow additional projects to be funded – most did so. A similar event was held in Keighley in 2006 to distribute over £130,000 to community projects. In this case, over 100 local residents voted on which projects should be supported. These events have had a significant and unexpected positive impact on community cohesion, as local communities previously at loggerheads have supported each other’s projects. DVDs are available from Bradford Vision for both these events.

Harrow Council worked with the Power Enquiry3 to hold an all-day Open Budget day at the Town Hall in October 2005. More than 300 people (who were broadly representative of the local population, following extensive work by the Power Enquiry to drum up local interest) attended a full day’s discussion on the council’s budget and used modern voting technology to establish their priorities. The conference also elected a Budget Council which liaised with the elected members and council officers to translate the priorities into meaningful projects and decisions. The local press was very supportive of the Open Budget day.

Newcastle Partnership, the Local Strategic Partnership, has developed the “U Decide” programme of events to enable local people to have a say in budgets for their areas. Some £150,000 was distributed via two pilot events in 2006. The first was a pot of “liveability” money that was allocated by over 100 local citizens to projects in selected wards. The second was a budget of money for youth projects. The council facilitated a group of young people across the city organising an event where youth projects were proposed and voted on by over 100 young people, and those receiving the highest votes funded. Both events were extremely successful, and have been captured on DVDs available from the Newcastle Partnership. The council is now considering spreading PB for broader use in selected wards across the city.

Salford council was the first council in the UK to express serious interest in PB. Earlier this year in Claremont and Weaste, it held a local meeting where more than 50 citizens allocated some £100,000 of highways money to four projects out of 23 proposed for their local area, using PB methods.

In Sunderland, almost £100,000 of New Deal for Communities money has been allocated through 5 PB events in local neighbourhoods since 2005. Around 100 local residents attended the most recent event in 2005 and voted on which projects should be funded in their local area.

Opportunities & Challenges

Clearly, the stage is set for a significant increase in activity on the Participatory budgeting front. The term “Community Kitties” is catchy and voter-friendly; it is certainly less inhibiting than “Participatory budgeting”. But as with many ideas that suddenly become popular, there is a danger of unrealistic expectations and interested Councils may need to weigh up both the opportunities and the challenges.

Among the key opportunities are:-

• Harnessing the political mood

Whilst ideas such as Citizens Juries and PB have been around for a long time, they have received more overt political support since the handover to Gordon Brown this summer. Speeches extolling greater public engagement do not always have the intended effect, but on this occasion it seems to have fired up many in the public sector to look again at their consultation and related activities and search for more participative ways to engage people. It is a very good time to try out new ideas and to experiment with public participation.

• Supports the local service agenda

PB manifestly accords with councils’ new duty to involve their local citizens in the exercise of their functions. It also sits well with the need for LSPs to involve residents in discussion on the Sustainable Community Strategy (SCS) and the Local Area Agreement (LAA). The recent White Paper made clear that LSPs would be expected to report back annually on progress on their LAA to local people. Neighbourhood and thematic meetings to discuss the progress on the LAA could also make decisions on citizen priorities for inclusion in the LAA (and SCS) in the following year(s). The LSP and its neighbourhoods could then issue service charters or guarantees to citizens on the services and improvements they could expect.

The LSP would annually self assess its progress, and be subject to the independent risk assessment from the Comprehensive Area Assessment (CAA) process, led by the Audit Commission. Clearly, the Audit Commission will need to ensure that councils are fulfilling their new “duty to inform, consult and involve”, and will need to be satisfied that citizens have adequate opportunity to influence the content of both the LAA and the SCS. Both the LSP’s self assessment of progress against the LAA, and the Audit Commission’s area risk assessment could be communicated back to citizens, and provide the basis for an ongoing cyclical involvement process.

 

•  A boost for Comprehensive Engagement Strategies

A major theme of the Local Government White paper was the need for LSPs and Councils to develop Comprehensive Engagement Strategies (CES). By definition, this brings together many public services which are delivered sometimes by a variety of different public agencies; sometimes they are private contractors and increasingly service providers include the third sector. Part of the rationale is to help tackle cross-cutting issues, and some of these are particularly suitable for a PB-based approach. People respond more positively to being consulted on practical expenditure decisions rather than on concepts and ideas, and those preparing a new CES will find this a valuable ingredient in the mix.

Equally there are a range of challenges which need to be addressed

• Overcoming resistance from elected members

Representative democracy is deeply entrenched in the UK, and unlike Brazil in the 1980’s such democratic deficit as exists is of modest proportions. Councillors can claim that they already undertake PB – and that their annual budgeting exercise is already preceded by public consultation. They will also argue that they have a mandate from the ballot box, whereas those who take part in PB activities are self- selected and not necessarily representative.

But wise and experienced elected members are also aware of the shortcomings of our current methods, and the relative lack of evidence-base as to how citizens feel about aspects of budgeting. PB will develop well if Councillors are fully integrated into the process and understand that it is a supportive not a competing methodology. An investment is needed to work with them so that their misgivings are accommodated and their role respected.

 

• Overcoming public scepticism

Too many forms of public engagement have disappointed, and as a result many members of the public and stakeholder groups mistrust consultation processes. They are also sceptical that PB becomes yet another technique to be manipulated either by the municipal authorities or captured by one particular bandwagon or another. Research shows that the numbers of citizens actually keen to take part in public engagement are few so in the early days when PB only attracts the enthusiasts, we must expect a degree of cynicism from the community as a whole. Our media frequently don’t help as it is always a better story to complain about consultation.

On the brighter side, effective PB improves accountability and transparency, and over the longer term can address the feelings of powerlessness which is the root cause of public apathy. Working with opinion-formers and the media is one way to secure a better climate of acceptance for experiments in PB

 

• Longer-term sustainability

The very worst scenario is to try it, half-heartedly, fail to support PB with sufficient resources and skills, fail to achieve sufficient benefits and drop it as quickly as it was taken up as yet another failed initiative. Local Government is littered with the dead bodies of failed initiatives that could well have succeeded had they been properly implemented. In the initial enthusiasm to try out PB, Councils must have regard to what’s needed to succeed over the medium or longer-term, and this means investment in skills, learning from others and in capacity-building – especially in the community itself.

Is it right for us?

Ideally, Councils and LSP partners would study the methodology in detail, and then look at the best opportunities for using them in their own environment. Only if the political and professional support was forthcoming and suitable projects identified should they consider going ahead.

The Consultation Institute and others hopes to develop sufficient capability to advise and guide those who are serious about this opportunity and other organisations will also support the technique.

Here are links to other resources:-

• The UK PB Unit provides help and support to pilot PB areas. Its website contains lots of useful background documents on PB, links to videos that can be downloaded and useful contacts: www.participatorybudgeting.org.uk

• A very useful international website and forum on PB: http://participatorybudgeting.org/

• Governance International also has interesting case studies in PB from around the world: www.governanceinternational.org/indexe.html

This is the 10^th 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