CHAPTER 1
Why consult on local finance?The public now expect to be consulted in a way that it perhaps did not before. Consultation does not remove your responsibility for making the final judgement about spending and what level of council tax to set. That is still your judgement: as councillors you will be held accountable for those judgements and as officers you will be accountable for the effectiveness of whatever spending is agreed. Asking the public makes a contribution by giving you more information on priorities and how far people are prepared to go to fund public services in your area.
The reality is that many councils are already good at consulting on a range of issues so a more systematic approach to budget consultation is within your grasp. What is needed is a sustained and strategic approach to improving consultation over budget and council tax setting.
CONSULTATION OVER BUDGET AND FINANCE MATTERS IS LIKELY TO BECOME MORE IMPORTANT IN THE FUTURE AS THE PUBLIC BECOMES MORE DEMANDING
Table 1.1: The public’s attitude to consultation over budgets “Well I think it’s important to have a sort of idea where the money is going, because it is our money after all, you know”
“It’s nice to be consulted …it feels good to be asked your opinion and what you want…It comes out of our back pocket anyway”
Source: Quotations taken from Liz Spencer et al, “It is our money anyway” – Lessons leant from giving the public a voice in local authority spending decisions, DETR, 2000
The main reason why consultation needs to be developed further is that public attitudes have changed. A National Centre for Social Research survey[1] in 2000 found that 59% of the public would be interested to some extent in taking part in important decisions about their council’s budget. The British Social Attitudes survey in the late 1990s showed that two thirds (64%) agreed that the council tax should be set locally but 69% felt that local councils should call a referendum if they propose a tax increase above the rate of inflation. The referenda that have been held thus far have, as we will see in Chapter 6, achieved a reasonable level of turnout.
Table 1.2: Public Attitudes to Tax, Spend and Priorities Polls of the British public in recent years have generally found high levels of declared support for tax increases, provided they are intended to fund improvements in public services. Only a small minority appear to favour tax-cutting measures that would damage public services.
Q. People have different views about whether it is more important to reduce taxes or keep up government spending. Howabout you? Which of these statements comes closest to your own view?
Nov 2000 % Taxes being cut, even if it means some reduction in government services, such as health, education and welfare 12 Things should be left as they are 20 Government services such as health, education and welfare should be extended, even if it means some increases in taxes 61 Don’t know 7 Source: MORI/Economist/Mail on Sunday Base: c. 1,000 British adults aged 18+ on each survey The British Social Attitudes (BSA) survey, using a slightly different question, found a smaller majority for tax rises, but it was still the most popular option. It is possible that difference in the figures depends on the fact that the BSA question mentions only increased spending, while the MORI one promises delivery in the form of extended services in return for the tax rises.
Q. Suppose the government had to choose between the three options on this card. Which do you think it should choose?
Jun-Nov 2000 % Reduce taxes and spend less on health, education and social benefits 5 Keep taxes and spending on these services at the same level as now 40 Increase taxes and spend more on health, education and social benefits 50 None of these/don’t know 5 Source: NCSR British Social Attitudes survey People expect to be informed and consulted about how services are going to be run and how their money is going to be raised and spent. Today, people are generally better educated and informed. They are more equipped than ever before to participate. However, there remain significant inequalities in people’s capacity to engage and these will need to considered in any consultation strategy but overall the public are now much more demanding and capable when it comes to consultation.
The proposals in the 2001 White Paper Strong Local Leadership – Quality Public Services seek to change the relationship between central and local government: to establish a partnership for the delivery of high quality local services and to secure strong and responsive leadership by local government, freed from unnecessary Government controls.
The need to develop a consultation strategy will, therefore, become more pressing. It is also likely that negotiating a council tax increase will become a more demanding task in political terms. As the 2001 White Paper puts it:
Local authorities face a lot of pressure from the Government and local service users to increase spend and improve services. But the Government does not believe that council tax increases at the level seen in recent years are sustainable in the future. We think local people will refuse to accept that their authorities need to increase council tax by more than twice the rate of inflation. It is therefore 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.[2]
In this light, consultation is part of the political and managerial capacity that all councils will need to demonstrate to an increasing degree. The challenge for the future is to take council taxpayers into a dialogue that engages them about how best to balance demands for spending with the capacity to raise taxes to pay for them.
Consultation has become a normal part of the way that local councils do their business and should apply to budget setting as much as other issues.
Local councils are experienced in consulting. In reviewing progress on public consultation the House of Commons Public Administration Select Committee commented in a report published in 2001 that:
Our broadest conclusion from the very wide range of evidence sessions that we have held is that the period since the middle 1990s has seen an explosion of interest in involving the public more frequently, more extensively and in much more diverse ways in the conduct of decisionmaking within the public services.... Much of the progress in public participation methods has come and will continue to come at the local level.[3]
Steps have been taken to encourage participation as a key feature of local policy initiatives stretching from the service review processes of Best Value through to the commitment to neighbourhood renewal. There is a continuing need as the Select Committee recognises to ensure that best practice in this area is disseminated and extended. The Select Committee recommends a continuing period of experimentation at the local level extending to greater use of referendums, more electronic-based consultation and tests of different electoral systems.
The London Borough of Sutton has for over a decade organised a consultation exercise about its budget setting. It tells its key stakeholders in voluntary and community groups:
Your views are important in helping the council reach its decisions on next year’s budget and our plans over the next three years. In addition to consulting you on specific growth and reduction options for services we are also asking for your views on our total level of spending against Government guidelines and on the balance of spending between education and noneducation services.[4]
Here Sutton emphasises the value of consultation in enabling them to test options and choices and find out views about the impact of different decisions.
Research shows that consulting with the public can bring a variety of benefits to a local authority:
Consultation can be seen as grounded in good ‘customer care’, it enables you to communicate with your customer and learn more about their preferences.
It can help identify the priorities of local residents.
There are a number of widely shared features of best practice in consultation:
Good consultation reaches out, actively recruiting participants rather than waiting for citizens to come forward.
A consultation strategy employs a repertoire of methods to reach different citizen groups and address different issues.
Consultation activity should recognise citizen learning as a valid outcome of participation.
Effective consultation should show results – by linking participation initiatives to decision-making, and keeping citizens informed of outcomes and the reasons behind final decisions.
The LGA has produced a useful set of guidelines about how to conduct consultation. See Table 1.3.
We found in our research that consultation practice was somewhat more advanced in the general policy areas of local councils than in the area of budgets and the setting of council tax. We think that the burgeoning good practice that is emerging needs to be applied to the area of budget setting as much as it is in other areas.
Table 1.3: LGA Principles for Consultation Summary of the 14 consultation principles identified by the Local Government Association
Inclusive: All sections of a local authority’s community will be affected by the way in which that community is governed. They must all then have the opportunity to express their views on how they are governed.
Open: If structures are to be developed that really are responsive to local needs then consultation must provide real choices.
Impartial: It is essential that local people are free to make up their own minds. Consultation must not lead to people giving a preferred response.
Informative: For people to be able to participate in informed debate and to make reasoned decisions consultation must be accompanied by information. Information about the Act and its proposals, what different options mean, and a balanced and fair explanation of the pros and cons of them.
Involving: To really engage people they need to have the opportunity to participate, to be able to say what outcomes they want to see, what culture they want to operate. They must have the opportunity to say how local governance should fit into their lives.
Understandable: Clear language must be used. Language that is understandable to all and connects with people’s experience of the council. A range of minority community languages should be used throughout the process.
Appropriate: To reach all groups there will need to be a mix of quantitative and qualitative research. Hard to reach groups in particular will require a more tailored approach.
Strategic: Consultation on local governance must be part of a strategic approach to consultation on other issues.
Joined-up: Communities need to be informed about how these changes will help to deliver more efficient and effective local services. It may be appropriate to combine consultation on new structures with other consultation, especially that taking place under best value or community planning to help make the links between changes in decision-making arrangements and other service improvement initiatives.
Resourced: Sufficient resources, both financial and human, must be devoted to consultation to ensure that it is rigorous and reaches all interested parties.
Professional: All parties must have confidence in the results of the consultation. The easiest way to achieve this is by involving independent interests that can provide the expertise to demonstrate that all processes are rigorous and robust.
Timely: Consultation should take place at the most appropriate times. Consultation processes must also ensure that there is adequate time for people to respond and express their views.
Listened to: The results of consultation must provide councillors with real information on which to base their decisions. To achieve this, consultation must be owned by members.
Reported: Feedback on the results and how they informed the development of new structures is essential to build confidence within communities that their views really are listened to and acted on.
Source: LGA, Let’s talk about it…principles for consultation on local governance, March 2000
CONSULTATION NEEDS TO REFLECT A SUSTAINED STRATEGIC APPROACH NOT A KNEE-JERK REACTION TO POLITICAL CONTINGENCIES
In the research that was undertaken to develop these guidelines document, we found very few examples of councils that engaged with their public on a sustained and strategic basis over budget-setting. Many councils consult effectively about a range of issues but few would regard themselves a trailblazers about consultation over council tax. Even councils that are at the forefront in consulting over budgets feel that there is still more they can do. There is a sense that some councils’ approaches appear to be ad hoc and underdeveloped. The officer responsible for consultation in one authority summed up the situation in many when he said:
“We have a good consultation strategy, but our strategy for consultation on council tax seems to develop annually.”
All local authorities communicate some basic information about the budget with their council tax bills. Many also undertake special initiatives in consultation from which we have drawn lessons. But much of what is done on consultation appears to reflect particular political contingencies – for example, reassuring members that the public will accept a higher than average council tax increase. There is also evidence of local authorities consulting taxpayers in order to persuade them that a council tax increase is needed. It is important for political leaders to check that the public understands why they take the decisions they do and that those decisions are made with the interests of the community in mind. However, commitment to consultation should be part of a sustained strategy managed with careful preparation and analysis, rather than on an ad hoc basis.
Table 1.4: Note on other guides to consultation There is a range of guides that provide general advice about consultation. They include:
Liz Spencer and others, It is our money anyway – Lessons leant from giving the public a voice in local authority spending decisions, DETR, 2000
Colin Copus and others, New Council Constitutions: consultation Guidelines for English Local Authorities, TSO, October 2000
Vivien Lowndes and others, Modern Local Government: Guidance on Enhancing Public Participation (DETR, October 1998)
For more advice on dealing with particular groups:
Philip Cortese and Louisa Nardini, Getting It Right: including disabled people in communication and consultation, Local Authorities Research + Intelligence Association (LARIA) 0950768189, June 2002 £30
For more detail on consultation literature see Annex 2.
These guidelines seek to encourage councils to develop a more sustained and strategic approach to consultation. It is constructed in a way to answer your questions and guide your actions. The next section makes clear our recognition that consultation over budget issues is far from straight forward.
[1] Liz Spencer and colleagues, “It is our money anyway”. Lessons learnt from giving the public a voice in local authority spending decisions ISBN 1 85112 366 0 £25, DETR, 2000
[2] Strong Local Leadership – Quality Public Services, TSO, 2001, ISBN 0 10 153272 £18.75, p103, http://www.local-regions.odpm.gov.uk/sll/index.htm
[3] House of Commons, Public Administration Select Committee.
[4] London Borough of Sutton, Report for consultation on the Revenue budget for 2001/2002
Published 4 July 2002
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