Tuesday, 22 September 2009

Participatory budgeting in a period of financial restraint

Last week, at a seminar for the KGSt (the German equivalent of theUK Improvement and Development Agency for Local Government), I gave a paper on ‘Participatory Budgeting in the Financial Crisis’, mainly focusing on the UK case. There were over 60 German and Austrian participants, mainly from local government or local government associations. It was clear that participatory budgeting is now a real issue in Germany. Moreover, it was clear that a key driver was the growing concern in Germany that the financial crisis is going to hurt German local authorities – they have been forecasting for years that this was likely to happen but, to UK eyes at least, German local government has continued to be financially well-off in recent years. It seems that real financial restraint may be about to hit German local communities, as it is now hitting UK local authorities.

The key issue, however, was whether a set of approaches to participatory budgeting which were fashioned through experimentation in times of ‘plenty’ will also be appropriate in times of financial restraint. The 32 PB pilots in the UK, all supported by the Department for Communities and Local Government, and the best-known German examples of PB (Berlin-Lichtenberg, Köln, Freiburg, Potsdam) have all developed at a time when service development was a key issue. Now attention is spreading to how PB might help in a period of cuts (or ‘decommissioning’ as some now like to call it in the UK, perhaps to make it sound less political).

However, there is one huge difference between participative approaches in relation to development proposals, as compared to proposals for cuts. When development proposals are put forward, people tend to focus on, comment on and promote those proposals about which they know something and in which they are interested. Their comments on these proposals are therefore based on strongly-held preferences and these preferences are (at least partly) well-informed. In this sense, many citizens (and certainly many service users) are actually more appropriate judges of priorities than politicians, service managers or professional staff. The views of informed and interested citizens deserve to be listened to – and, rightly, they are likely to have an effect on others who participate in the decision making process.

However, this is not the dynamic when citizens are asked to comment on proposed cuts. Here, citizens are likely to suggest cuts in areas about which they know little and have no interest. This is natural. They will lobby to protect the services which they value. So the dynamic is that most citizens will focus on services where their judgements are NOT well-informed and where they have very weak preferences. Relying on information like this in the decision-making process is dangerous. It leads naturally to widespread demands for the abolition of those services which are used by minorities and which are disliked by majorities – often ‘equalities’ units in local government come under threat, services to those disadvantaged groups seen as ‘undeserving’, and (in the UK at least) arts and cultural services are vulnerable.

This is not to say that PB can’t be useful in the cuts debate. But it has to be redesigned. It has to be undertaken in such a way that the preferences which people express are given most weight when they have knowledge and interest in the services concerned. It has to allow the strength of the preferences of those who benefit from services to be explored and understood in the decision making process. It has to ensure that the decisions on which people express their views are decisions about which they actually have views. Otherwise, major damage can be done to the balance of the overall public service system on offer to citizens. Worse, people who are highly dependent on public services may find those services withdrawn or seriously reduced in effectiveness for their purposes. And, perhaps worst of all, the faith of citizens in the democratic decision making system – already seriously weakened in these times of political scandals and media hyper-criticism – will be further damaged, as the implications of unthinking cuts slowly sink in and their impacts become evident.

So, the challenge is: how to design a PB system which can give citizens real voice in the cuts process which now faces us – without running into the potential pitfalls outline above? Comments will be welcome – and some innovative thinking is seriously required.

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