Contact: Paul Carey-Kent, (01962) 84 7525; [email protected]

1 Introduction

1.1 The Government has published a consultation paper on Participatory Budgeting, stating its ambition that every local authority will introduce such arrangements by 2012. This paper summarises what is intended, sets out the consultation questions asked and proposes responses to them.

1.2 Cabinet may wish to experiment locally with the participatory budget approach in advance of the Government timetable subject to the review of Hampshire Action Teams and other developments on local community involvement. Cabinet will also be mindful of their democratic mandate to take budget decisions and may wish to explore such options with caution. If so it would be practical to plan on the basis of piloting some such arrangements during 2009/10, and a subsequent paper will brought to Cabinet setting out the options for this, if requested.

1 The Consultation paper

1.1 The Community and Local Government (CLG) consultation paper "Participatory Budgeting: A Draft National Strategy" defines participatory budgeting as follows:

"Participatory budgeting engages people in taking decisions on the spending priorities for a defined public budget in their local area. This means engaging residents and community groups to discuss spending priorities, make spending proposals, and vote on them, as well giving local people a role in the scrutiny and monitoring of the process."

1.2 The benefits of participatory budgeting are seen by CLG as being:

· "It helps bring diverse people together, supporting community cohesion

· It helps to raise people's understanding of the complexity of the public budget setting and deciding between competing priorities

· It can lead to improvements in the way local people and elected councillors and council officials work together

· Through such empowerment, services can be better tailored to local circumstances, and so improve resident satisfaction

· More people will take part in their community to the benefit of local democracy

· It is seen as a way to engage with "harder to reach" groups

· It will provide councillors with opportunities to learn about their community's priorities."

1.3 There are currently 22 and local authority pilot areas operating some participatory budgeting. The Government believes that their experiences to date confirm the nature of the benefits achieved, and that they have also produced evidence that people or groups do not only vote for their own interests, but in many cases for projects which do not directly benefit them.

1.4 The Government distinguishes three models of participatory budgeting which are being used to date:

· Designating parts of area based government grants to be allocated by the community. Such funds are typically dedicated to social and environment improvements to a neighbourhood, seen as appropriate issues for which people are likely to wish to engage in.

· Devolving council budgets to local area committees, for example highways improvements. The area committee may then choose to allocate that spending by participatory budgeting. This is seen as a good approach to enable local councillors to become involved as well.

· Going beyond the well established consultation approaches to involve residents in participatory budgeting on parts of the main annual budget. Thinking on this is at an early stage and has not yet been piloted by the Government.

1.5 The Government intends to set out its planned implementation approach to participatory budgeting into the forthcoming Empowerment White Paper. They believe that youth services, community policing and health are particularly promising areas for applying such approaches, and accordingly aim to take forward pilots in local government, police and health authorities.

1.6 The Consultation paper is reproduced in full at Appendix 1.

2 Consultation questions

2.1 The Governments consultation closes on 10 June.

2.2 The consultation questions asked, together with proposed answers, are as follows:

· Have we identified the correct work streams and actions to achieve the strategic objective of participatory budgeting to be used in all local authority areas by 2012, if not, what others would you suggest?

The work streams, with their emphasis on piloting, evaluation of those pilots, building into guidance and encouraging rather than directing the approach, appear appropriate. That said, the timetable is not entirely clear and the pilot results should be published as early as possible.

· Do local authorities think they need any additional powers to engage with citizens on spending decisions in this way. If so, what should they be?

The Council believes that the existing powers (to hold polls to ascertain views on services), do not require supplementing. All foreseeable aspects of participatory budgeting can in any case, be taken forward without applying different legal approaches simply by the Council undertaking and delivering on the promise to abide by community views in setting particular budgets.

· What would incentivise local authorities to undertake participatory budgeting?

Additional funding would be the most powerful incentive for local authorities to undertake participatory budgeting, whether through addition to general grant aid under the "new burdens" provisions, or through specific grant (accepting that for "start up" of new policy strands, specific grants continue to be appropriate).

· What would help community groups to engage in the process?

The Council suggests that local authorities are best placed to judge the model most likely to produce the right results in their area. The best way of helping community groups to engage in the process would be to avoid restrictive regulations so that local approaches can be developed which are best suited to the needs of particular communities. A one size fits all model is not appropriate - the approach in a large county council such as Hampshire will be quite different to a much smaller, more homogenous single tier authority.

· What barriers are there to local authorities devolving parts of public budgets in this way?

Some budgets are less open to meaningful participation than others, eg where statutory responsibilities needs to be discharged. Care is needed to ensure that there is no pressure to apply the approach in such inappropriate areas. That aside, the main barrier is likely to be the funding position as set out above.

The reason behind this is that, whilst there may be some benefits from broader involvement in budgeting process and more locally sensitive allocation of existing budgets to different priorities, the experience is bound to seem less positive if the participatory outcomes are seen to be at the expense of what might otherwise have been done. An element at least of additional funding would be far more likely to produce results. Indeed, the Council's own successful experiments with budgets devolved to local members - a compatible forerunner to the Government's approach - has been successful largely because the Council was able to make some additional investment. The funding position for the CSR2007 period makes this much less achievable and reinforces the point that the absence of any additional specific funding for participatory budgets would be a barrier.

· How can councillors be given a central role in the use of participatory budgeting?

Local councillors would have a natural role in any participatory budgeting occurring a ward level. They could take the lead in the approach to consulting the local people on their priorities. They could feed in to that process issues raised with them through their constituency work. Preferences expressed would in turn inform their contributions to the determination of the overall council budget. Again, the key principle would be to allow local authorities to make the arrangements along those lines which best suit local members rather than attempting any central regulation.

3 Recommendations

(i) That the Cabinet responds to the consultation as set out in the report, subject to any amendments agreed; and

(ii) That the Cabinet receives a further report in July/September setting out options for consideration if it wishes to pilot participatory budgeting approaches in the County Council during 2009/10.

Section 100 D - :Local Government Act 1972 - background documents

The following documents discuss facts or matters on which this report, or an important part of it, is based and have been relied upon to a material extent in the preparation of this report.

NB: the list excludes:

1. Published works

2. Documents which disclose exempt or confidential information as defined in the Act.

None.