Participatory Budgeting: Shining light on the well manicured hands on the public purse.

Jez Hall from the Participatory Budgeting Network argues that the costs are spiralling of a public service culture that is focussed on acute interventions, increasingly relies on private delivery and is driven by the interests of professionals. He argues that participatory budgeting is a tool that can deliver fiscal responsibility and make services more focussed around the needs of citizens.

Advocates for more citizen participation usually discuss Participatory Budgeting, (and similar ideas for direct democracy) as a democratic enhancement – something about fixing democracy, trusting in politics or getting involved. It is as though involvement is the aim.

But a too often undervalued dimension is the cost benefit of participation. We live in expensive bureaucratic systems, where the recurring costs of services make no sense to ordinary people. I believe we need to raise the debate when looking at the different public service choices. Because, from observing Participatory Budgeting  (PB) in action, when given a choice, and good information, and a chance to deliberate ordinary citizens back prevention over an often ridiculous status quo that wastes money and blights lives by focussing on the wrong end of the system. When there is pressure on public budgets it matters who has a say, and who sets the agenda.

Here’s an interesting set of statistics:

It costs £65,000 to imprison a person in this country once police, court costs and all the other steps are taken into account. After that it costs a further £40,000 for each year they spend incarcerated.” £100,000 for a one year prison sentence. Once you have been into prison you are pretty likely to return. Or suffer limited employment opportunities for your whole life, and you and your family more likely to become dependent on welfare.

Private sector outsourced care for at risk young people can be much expensive and the outcomes often little better. “There are differing views amongst commissioners about the relative costs of their own children’s homes provision to those of the external providers. The DfE Children’s Homes data pack (December 2014) concluded that average unit costs are … around £2,900 per week”. A 2013 survey indicated the most common cost of high intensity outsourced care was £3,000 per week, rising in rare cases to £6,000 per week. That equates to between £150,000 to £300,000 per year.

Then, at the other end of the spectrum, it costs about £5,000 per year to provide a school place in a city like Manchester. So one year of a young person attending school costs about the same as spending 2 weeks in prison, or maybe just a week in intensive residential care.

In health the story is much the same. The unit cost of attending an A&E department is far higher than seeing a GP or community based health worker. This statistic is out of date but still relevant. In 2010 to walk through the door of an A+E department for a brief consultation cost over £125. That’s before receiving any treatment. Yet I, and probably most citizens of the UK, used to free at the point of delivery healthcare, are horrified by the prospect of paying £25 to see a GP, as proposed by the Kings Fund in a report in 2014. An influential think-tank has recommended the Government considers charging patients up to £25 for a GP appointment, becoming the latest in a series of recent reports mooting the controversial move.”

Best keep people out of prison, hospital and children’s homes then. That requires prevention, something that can only be effectively delivered outside these expensive institutions and within communities. Neighbourliness, good employment, education, and stable families matter a lot, but sometimes it takes professional support to prevent the most at risk going off the rails.

Now, I wonder how much employing a trained youth worker costs? The answer is around £21,000 a year – rising to about £35k max – there will be some on-costs on that basic figure, but it gives us a perspective.

And a prison governor earns upward of £180,000 for a difficult high security prison, but more normally “salaries for qualified operational managers start at £32,000 a year, while more senior managers (including governors) can earn around £60,000 pa. It’s a professional salary, but hardly ‘riches beyond the dreams of avarice’… Of course, there are other benefits, including a civil service pension.” A judge earns £130,000 or so. And judges are most unhappy about it. Almost a third of judges, 31%, said they would consider leaving early in the next five years. The proportion was even higher for high court and appeal court judges. Declines in pay and pensions were the main complaints. Nearly four-fifths said incomes now and after retirement do not adequately reflect the work they do and that they had suffered a loss of net earnings over the past five years.”

It’s tough looking down on society from the top. If the people involved in commissioning services are the people already managing, running or benefiting, there is an obvious bias to backing their own professional approach. That isn’t corruption. It’s human nature. Yet, however well intentioned and informed they may be, it is a capturing of the system by those already benefiting most from it. As a leading public health manager for a big city once said to me “prisons exist to pay for prison staff pensions, and hospitals to pay for consultants golf club memberships”.

This might be a little unfair. But if you care, and professionals in the public sector do care, without a robust process of challenge there is no strong incentive to reduce one’s own role. We have become wedded to expensive sticking plasters that may contain but don’t prevent problems. This was clearly identified in a 2011 report on the future of Scottish public services that raised the problem of ‘producer dominance’. Basically public sector commissioners, left to their own devices, prioritise existing approaches, and de-prioritise prevention. Government remains the dominant architect and provider of public services. This often results in ‘top-down’, producer- and institution-focussed approaches where the interests of organisations and professional groups come before those of the public.”

Maybe PB can shine a light on that problem – and save taxpayers a bit of money. Putting one less person in prison for a year could pay for at least 3 youth work posts – and who knows how many hundreds of hours of volunteer time at a community based youth club. Each youth worker, properly supported, could prevent a young person being abused, or going to jail. If they stopped just one conviction or referral per year each, then prevention is still a great investment.

Of course there may be lots of solutions, like funding voluntary and community sector providers. Though we need to be careful. The lesson of the Kids Company is that these decisions can’t just be left to politicians either. Despite lacking robust evidence about the quality of the charity’s outcomes, value for money or governance, Kids Company attracted high profile support from senior Ministers throughout successive Governments, and tens of millions of pounds of public money have been handed to the charity over the course of its existence.[1]

Whilst I believe in high quality, preventative public spending, that doesn’t mean the money can’t go outside the public sector. But when it does, either to ‘not for profits’, or private sector provision citizens need to be aware of the cost and benefit of that choice. If they were, I doubt that private financing would be as widespread as it is, given its costly nature.

Participation is not just about validating pre-determined choices of so called experts. It is about deliberating between options, suggesting new approaches and making more informed choices. So let’s have a better approach than tick box consultations. Let’s shine a light on some of these costs. Open up how we make these decisions and let the people decide?

Jez Hall is a founding member of Shared Futures. Jez helped found the PB Unit in 2006 and has since then remained a committed advocate of Participatory Budgeting.

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