Scotland Communities and society , Democracy, devolution and governance , Economy and regeneration , Finance

PB or not PB: question time for participatory budgeting

Summary

  • Scottish Government agreed with COSLA in January 2021 to be “flexible” in the implementation of the 1% Participatory Budgeting (PB) mainstreaming target. The target was part of a 2017 framework agreement that committed Scottish councils to allocate 1% of their total budgets via PB by the end of the financial year 2020-21. This was a welcome outcome to last year’s negotiations between COSLA and Scottish Government to revise the agreement in the wake of the pandemic.
  • Scottish councils have made steady progress in the mainstreaming of PB. However, Covid-19 emergency response has seen many council officers redeployed to front-line work, including some of those whose usual remit included strategic work such as the development of PB. Council budgets for 2021-22 have been refocused on Covid-19 recovery, and there is no spare resource or capacity for non-essential work.
  • Postponing the 1% target is a big help and all parties are still committed in principle to the fulfilment of the framework agreement. But before we travel further down the PB road, the hiatus offers an opportunity to ask a few pertinent questions. Everybody wants to encourage public participation, but is PB always the right answer? What determines whether PB is genuinely PB, or something else? How is it going so far, in Scotland and further afield? In this briefing we answer those questions and consider lessons from other parts of the world to help Scotland on its PB journey.

Briefing in full

Background

Participatory budgeting, universally known as PB, famously began in the city of Porto Alegre in Brazil in 1989. Porto Alegre’s population had doubled in the previous 30 years and many of those living in the peripheral areas of the city had no access to basic public services. As in much of South America at the time, the political system favoured a culture of clientelism, with resources bartered for political support. In 1989, the newly elected democratic socialist Partido dos Trabalhadores (Workers’ Party) began to involve residents in decisions about community infrastructure in a new process they called the ‘orcamento participativo’ or ‘participatory budget’. Their success in engaging with communities, redistributing resources and reducing inequality led to PB spreading throughout South America and across the world.

The impressive extent of contemporary PB activity is captured in the World Atlas of Participatory Budgeting, published in Portugal in 2019 and available in Portuguese and English. With contributions from 76 authors, the Atlas reports on PB projects and processes in 71 countries from Angola to Zambia. It does not claim to be comprehensive but more of a work in progress. For example, the UK does not have an entry, but Scotland does, contributed by Fiona Garven of the Scottish Community Development Centre. This tells us that in 2017-18, Scotland had 63 PB projects recorded on the PB Scotland website’s crowdsourced map of PB projects past, present and future; by February 2021 that cumulative total had risen to 211.

PB or not PB?

The use of a standard questionnaire to collect data means that the Atlas has not only collated indicators in common for all the projects included but claims to have established a common understanding of what participatory budgeting actually is. To merit inclusion in the Atlas, a PB process must:

  • involve a specific portion (or the entire amount) of an institution’s budget which can be freely and independently decided by all the citizens participating in the initiative;
  • be organized in two successive phases: the decision-making phase during which participants can make and choose proposals, and the execution phase during which the selected projects are implemented;
  • be a continuous practice, with each cycle taking place over a set period of time.

There have been many other attempts to define PB. It is helpful first of all to put it into context as a specialised type of participatory democracy, i.e. the direct participation of individual citizens in government, as opposed to elected representatives in the more familiar model of representative democracy. The Organisation for Economic Co-operation and Development (OECD) published in 2020 the highlights of their study of ‘Innovative Citizen Participation and New Democratic Institutions: Catching the Deliberative Wave’, which explores current trends in participative and deliberative democracy. The OECD sees a trade-off between models which depend on mass participation (e.g. in PB) and models which permit deeper public deliberation (e.g. citizen’s juries). All of the models explored have their benefits and limitations and all – if used in appropriate circumstances – can potentially give citizens a more permanent and meaningful role in shaping the policies affecting their lives.

Professor Yves Sintomer of the Université de Vincennes (Paris 8 University) has published extensively on participatory budgeting in Europe and beyond. A 2012 study conducted with colleagues in Germany and Portugal, and still relevant reading, analyses the various forms PB has taken as it travelled around the world. Sintomer describes participatory democracy as the “fourth power” of public decision-making – different and distinctive from judicial, legislative and executive decision-making. He observes that procedures called PB in some places would not get that label in others, and identifies five criteria that should be met for a process to qualify as PB:-

  1. the participatory process is focused on the question of how a limited budget should be used;
  2. the process must influence an elected body with power over administration and resources;
  3. it must be a repeated process over years, not a one-off event;
  4. some forms of public deliberation must be included, within a new and dedicated public forum;
  5. ongoing accountability with regard to the results of the process is essential.

PB at home and abroad

Sintomer’s home city of Paris is one of the biggest success stories in PB. Championed by Mayor Anne Hidalgo of the Parti Socialiste, Paris began its ‘budget participatif’ programme in 2014 and now allocates 5% of the city’s capital budget to PB – around 100 million euros. Projects are submitted on a dedicated website and anyone aged seven or over can vote. While this does give rise to issues with voter ID and fraud, the city prioritises participation which at around 10% is high by international standards. In February 2021, Mayor Hidalgo relaunched her PB programme with the aim of rebuilding public confidence in local government following the trauma of Covid-19 and its socio-economic fallout. Faced with a democratic crisis, Paris is trusting in citizen power and collective deliberation to decide its post-pandemic priorities.

Scotland’s PB journey began in 2014 with the adoption of PB by Scottish Government as a tool for community engagement. National resources were committed to support and promote training in PB in local authorities, and the Community Empowerment (Scotland) Act 2015 made provision for future regulation relating to PB. Three rounds of Community Choices funding from 2016-17 to 2018-19 followed, with approximately £6m split between funding small grants PB projects and central support and development. The third sector played an active role in helping to facilitate Community Choices and ensuring the success of these early forays into PB territory.

In 2017, COSLA and Scottish Government signed a Framework Agreement, specifying that all Scottish councils would work towards achieving a target of distributing 1% of their total budget via PB by the end of the financial year 2020/21. The intention was to induce councils to move beyond a small grants model of PB and apply PB to part of their mainstream budgets, an essential move if they were to achieve the 1% target. While the target has been paused, there is an unquestioning assumption that PB activity should be resumed at the earliest opportunity. Most recently, the Social Renewal Advisory Board report of January 2021, “If Not Now, When?”, has demanded that “Participatory budgeting should be widened and deepened and more diverse voices should be supported to get involved in decisions about public money”.

A few Scottish councils are already piloting mainstream PB, for example Dundee (Dundee Decides), Stirling (Your Stirling, You Decide) and Glasgow. Glasgow is a model of good practice in Scottish PB. Glasgow’s 2018-19 budget included £1m split between pilot PB projects in four council wards selected using the Scottish Index of Multiple Deprivation (SIMD). Canal focused on income inequality, Calton on child poverty, Greater Pollock on young people and Pollockshields on black and minority ethnicity (BAME). Citizen’s Panels were established in each area to co-produce, design and deliver PB, with anchor organisations mobilised to facilitate local discussion and delivery. Two communities of interest pilots were established in partnership with Glasgow Disability Alliance (GDA) and Young Movers (YoMo). An evaluation of Glasgow’s PB exercise by Glasgow Centre for Population Health acknowledged “the dedication of the partners involved and the authenticity and quality of the PB processes developed”.

A wider evaluation of PB across Scotland was commissioned in 2015 by Scottish Government from Glasgow Caledonian University. Their final report of May 2019 introduces the “3 Ts” model to describe the degree to which PB has been adopted as a political philosophy as well as a practice.

  • Transaction – a limited exchange of financial resources, for example a small grants PB exercise
  • Transference – a more meaningful transfer of power and resources
  • Transformation – a radical change in the relationship between citizens and governing authorities, with a strong focus on social justice

The full report offers a series of propositions and challenges to Scottish Government and local authorities if they choose to move further in the direction of transformation. Recommendations include the need to address the fears of finance managers that PB will prove costly to resource, and of elected members that PB is not a cost-effective way to engage communities in decision-making. These are not trivial concerns. As the report concludes, “ultimately, participation requires resources of time and finance from local authorities and other public sector partners to secure and sustain local capacity and interest”. The Glasgow project evaluation reveals that the proportion of funding dedicated to support of all kinds was close to 20%, a significant overhead that few councils will countenance. If Scottish Government is determined to enforce PB it may need an instrument with more teeth than a voluntary framework agreement.

Is it feasible to legislate for PB? Stephanie McNulty describes the Peruvian experience in “Hope for Democracy – 30 years of Participatory Budgeting Worldwide”. Peru is one of very few countries to have legislated for PB. The Participatory Budget Law of 2003 dictated that the capital investment costs of each regional, provincial, and local budget must be developed with participative input, and local governments must demonstrate that they have complied with this process in order to receive their annual budgets. Over 2,000 sub-national governments undertake PB annually, but the reality on the ground is not quite what it claims to be. National government has failed to police PB processes, and chosen projects join a long waiting list for funding and implementation. Many simply disappear off the radar. PB has failed to improve public services or address inequality and consequently the Peruvian public has lost confidence in it.

McNulty draws five lessons from Peru for any country considering legislating for PB:

  • Flexibility in the legal framework is imperative to allow the process to change over time and adapt to unforeseen problems.
  • Be prepared to dedicate time and resources to training both government officials and participants.
  • Lack of political will is probably the biggest threat to the sustainability of PB. It is vital to engage both elected representatives and officials.
  • Concrete sanctions for politicians who refuse to honour the letter and spirit of the law need to be in place, along with sanctions against officials who manipulate or restrict participation in the PB process.
  • Quotas may be needed to ensure demographically balanced participation.

Mind the gap

McNulty suggests that one reason behind the failure of the Peruvian experiment was that PB was introduced for the wrong reason, to improve political accountability rather than to promote social justice. Sintomer detects three basic trends in PB practice, which reflect the “3 Ts” model:-

  1. The first trend seeks to fundamentally change prevailing conditions as part of a broader movement for renewal, overcoming social injustice and achieving sustainable development.
  2. The second trend involves the use of PB to drive a reform agenda, for example to improve the lives of socially disadvantaged groups or improve engagement between local government and citizens.
  3. The third trend is “evidenced when PB is largely of a symbolic nature and in which there is a yawning gap between the proclaimed objectives and the reality”.

Sintomer’s description of trend 3 will resonate with anyone working in the public sector, where “yawning gaps” between policy and practice are all too familiar.

In the first place

What of Porto Alegre, where it all began? A case study in the World Resources Report, “Towards a More Equal City,” examines the original PB experiment and considers whether and how it has achieved transformative change. There can be no doubt that during the first three terms in power of the Workers’ Party, from 1989-2001, PB was successful in empowering poor residents, promoting access to core services, and making Porto Alegre a more equal city. During their fourth term, from 2001-04, things began to unravel. An attempt to reformulate the PB process failed and the Workers’ Party ran out of money, leaving many PB projects unfunded.

In 2005, the incoming Partido Popular Socialista introduced a new community development model which sidelined PB. The selection in 2009 of Porto Alegre as a host city for the 2014 World Cup led to 18 major infrastructure projects, funded directly by the federal government with no meaningful public deliberation: indeed one project required the compulsory relocation of 1,550 families from the city centre to the periphery, hardly something they would have voted for. PB’s share of the budget declined along with its public transparency and accountability, and in 2017 the PB programme was suspended altogether.

Elsewhere in Brazil, the story is similar. Writing in a blog for the International Budget Partnership, academics from Rio, Boise State and Southampton report on the rise and fall of PB across Brazil. They conclude that PB processes work best in the initial years, when the scale is limited and citizens are enthused by the novelty. “Over the longer term, PB processes engage more people that propose more ideas that require more resources, eventually hitting a sort of ‘glass ceiling’, a situation in which ideas processing slows down, more and more proposals are not implemented, and the positive reinforcing feedback loop typical of the first years of a PB process breaks down. This has been seen repeatedly, with many cities unable to keep PB processes alive for more than a few years.”

PB in Porto Alegre undoubtedly achieved transformative change but failed ultimately for two reasons: loss of political support, and the limitations of the PB process itself. The programme worked well while concerned with relatively small-scale local infrastructure but could not be scaled up to handle decision-making about large-scale projects. The case study makes four recommendations for anyone considering the implementation of PB:

  • Participation must be well-structured and include capacity building, so as to ensure active and informed participation by diverse segments of the population.
  • Adequate financial resources must be committed for success; inadequate resources do not just doom the PB effort but can also raise doubts about participation more generally.
  • When participatory activities are undertaken, the underlying institutional and political structure should also change.
  • Those undertaking PB processes should expect change over time and design for it.

Comment

Reviewing studies of PB around the world, there is a remarkably high degree of consensus as to the necessary criteria for success. Four essential conditions are identified for genuinely transformational PB – national political commitment, local political commitment, a pressing need for social justice and a sizeable budget to support the process. Where any one of these conditions is missing, the result will not be transformative but of a more transactional nature at best and, at worst, Sintomer’s “yawning gap” between professed policy and practice.

Historically, PB has worked best in cities with high local concentrations of socio-economic deprivation: the population least well represented in existing democratic structures. In such circumstances there is a genuine need for new ways to engage and empower citizens, and change lives. With commitment and resources, PB can fulfil that role.

Other communities may feel less need for radical change and simply want more influence over their public services. Here a blanket requirement to undertake PB would be of little benefit and possibly counter-productive, given the high cost of implementation. In the wake of the pandemic, local government budgets around the world are likely to be stretched to the limit for some years to come. Councils and communities whose main interest is public deliberation would almost certainly get better value from one of the many alternatives to PB.

Meanwhile, back at the ranch, Scottish Government and COSLA have renewed their commitment to PB and the programme is forging ahead. A National PB Strategic Group was convened last year, with a brief to provide strategic direction for PB in Scotland. Chaired by Martin Johnstone, a third sector champion, the group has published its own list of questions for consideration:

  • What role does PB have in the Covid-19 recovery phase?
  • What next for PB in the short, medium and long term?
  • How does PB fit within broader reform of democracy and community empowerment?

Scottish councils will await with interest the outcome of their deliberations.

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