Memorandum by Pam Dixon and Kate Oliver
Are you searching for ways to involve as many
people as possible in the decisions that affect them?
While surveys, focus groups, public meetings
and visioning exercises enable us to get views of at least a cross-section
of our citizens, those who respond may well not believe that any
real change will occur as a result. But why should we be bothered
Turnout in local elections is very low30
per cent nationally. If we don't enable and empower our citizens
to participate in local decision-making in between local elections,
increasingly Councils will be unable to claim that they are democratically
This is especially the case when the current
political emphasis is on regional government and very local government.
If local authorities, as they are presently constituted, do not
react constructively to this and redefine their role, their existence
may be in jeopardy.
The first step to reinvigorating local democracy
is to ensure that it has its own local power base as well as devolved
power from central government. Most local taxes are collected
centrally and most local revenue is still ring fenced by central
government to spend as it sees fit, including expenditure on high-profile
projects such as the Single Regeneration Budgets and Education
Action Zones. As Henry Tam pointed out:
"Devolution to the regional level of statutory
bodies is a useful step, but unless there is further decentralisation
to the more local and accessible level of governance, participation
of citizens is not likely to increase . . . Incentives against
devolving functions and budgets to others are almost built into
the system, and responsibility for democratic participation does
not feature at all." (Henry Tam, "Communitarian Ideas
and Third Way Politics", VOICE, August 1999.)
The second step is to think about how we can
devolve power to the citizen in a meaningful way and in a way
that could include every individual. Here we propose a process
that could do just thatby putting the power in people's
Each year when the Council Tax is collected,
a proportion of it could be given back to citizens in the form
of `community pounds' or `com-pounds'. In return for paying Council
Tax each citizen would receive a number of com-pounds that they
could then spend on enhancing or using council services of their
Citizens could choose to spend their com-pounds
either to increase the quality or quantity of the statutory and
essential services already provided, or to receive new, discretionary
services and facilities. For example, a person may be assessed
as needing to receive meals-on-wheels three times a week. They
could use their com-pounds to increase the number of times they
receive meals or they could choose meals from a higher quality
menu. Other examples could include citizens using their com-pounds
to reduce the price of leisure facilities, or to employ a home
Com-pounds enable people to `buy' a range of
different services from the same suppliertheir local authority.
They differ from voucher systems, which enable people to buy the
same service from a range of suppliers with the result that money
may leave the public sector. Although the com-pounds system uses
the basic concept of the expenditure of money, it can actually
be seen as a sensitive voting system rather than a purchasing
The amount citizens receive would be limited
by the proportion of the council's budget that is used to provide
statutory or essential services. At its most radical, any expenditure
on the rest of the services could be at the discretion of citizens
rather than the council. It would be up to councillors to decide
the proportion of their budget that would be allocated in this
way. Initially, during a pilot phase, the proportion might be
quite small, expanding if the proposal were successful.
As well as, or even instead of, using their
com-pounds to increase the quantity or improve the quality of
services to individuals, citizens could choose to use com-pounds
for community services or projectstheir children's school,
a campaign to have speed bumps put in their street, or a luncheon
club. This would help to identify local priorities.
Com-pounds could even be spent in other communities.
For example, elderly people with an independent and adequate income
could choose to spend com-pounds on a skateboard rink in a community
other than their own so that the street environment in their own
community would feel safer.
Councils could specify the proportion of each
person's allocation of com-pounds that had to be spent on community
services rather than on services to individuals; or it could restrict
the spending of com-pounds to the purchase of community services.
The availability of funding for local groups
would be an incentive for community interest groups to lobby local
people about issues in their community. Potentially this could
increase the level of community debate. However, there would need
to be safeguards (such as restricting the amount of money spent
on lobbying) to protect individuals from undue pressure to spend
their com-pounds in a particular way.
Com-pounds would need to be allocated to each
individual in the household, including children, to help balance
inequalities within households. Councils could also decide to
give additional com-pounds to those in receipt of benefits or
on low incomes. This would automatically shift investment to poorer
areas and could be the basis of a redistribution of wealth and
enfranchisement that current local anti-poverty strategies can
only dream of.
Varying contract specifications according to
need/location has already been addressed by councils that were
creative with the constraints of compulsory competitive tendering.
In Birmingham this approach has been deployed with some success
in certain services; for example, there are three times as many
planned bulk refuse collections in the deprived areas of the city
as there are in other areas. The initial allocation process to
each Ward was based on Census-derived indicators of deprivation,
following work done by the Social Exclusion Unit. The subsequent
local decision-making was devolved to each Ward Sub-Committee.
If contract variations are combined with com-pounds, bottom-up
regeneration could become a reality.
Councils could also allocate com-pounds directly
to voluntary sector and campaign groups to encourage community
action and cohesion, and overcome inequality. A group that could
demonstrate that it represented a particular minority ethnic community
could be allocated com-pounds and this would help to redirect
council services to the needs of the minority ethnic communities.
Councils would need to cost the discretionary
services and provide a catalogue of services that citizens could
purchase with their com-pounds. This catalogue also could be published
on the world wide web and be made available through other IT avenues
at a lower cost than more traditional publications. This would
have increasing significance as access to IT increases. In addition,
local communities could ask the council to cost a proposal that
they might have. Placing a value on a service may encourage citizens
themselves to value community services or services that are `free'
at the point of use. For example, it is possible that if the cost
of graffiti removal or litter removal were better understood it
might encourage more community action to prevent it.
The proposals could be extended to other public
sector settings. For example, citizens could be offered an allocation
of com-pounds for purchasing a range of preventative (but not
essential) health care services from the local health authority.
Choices could be made to purchase health checks, a range of healthy
foods or stress management courses.
At present, participative consultation techniques
tend to be constrained by inadequate prior education and training,
the lack of good quality information, and the time and cost required
to provide them. For example, surveys of local people on subjects
about which they have partial or inaccurate information produce
skewed results and undermine people's faith in the consultation
To make informed decisions about spending com-pounds
people would need to be given, and have access to, high-quality
information. This is made feasible by local television and radio,
and now the internet and the world wide web. Where information
is not made easily available people will be increasingly in a
position to acquire it anyway and will use it outside the democratic
process or despite it. It is an urgent task and one that sits
well with our proposal that people should have access to and can
share information pertinent to decision making.
Com-pounds could be the answer to a number of
key issues that councils have been struggling with for sometime.
Potentially they allow all citizens to have a direct input into
how a range of personal and community services are delivered and,
therefore, could result in personal empowerment. However, in part
this would be dependent upon the effectiveness of the implementation
of our proposals and we are aware no currency system is perfect.
Therefore a number of questions need to be addressed.
How would com-pounds be distributed? Each citizen
could have a com-pounds account and cheque book or debit card
with which to spend them. They would need to have a way of checking
their balance whenever they needed. This would either be based
on telephone banking principles and/or a system of automatic teller
machines (`hole in the wall' cash machines).
What would be the administration costs of such
a scheme? Often, administering current consultation is not fully
costed, especially the staff resources involved. Whilst we recognise
that there would be administrative and promotion costs, we question
whether these would outweigh the benefits of our scheme, or the
costs of consultation and other arrangements for devolution that
are currently used.
Is it possible to plan services in response
to what could be erratic expenditure? For instance, a community
play project may need to be funded for three years to be effective.
A local community group starts an effective campaign that attracts
sufficient com-pounds in the first year but, as other campaigns
develop or personal needs kick in, the project fails to get funding
in subsequent years.
A way round this would be to apportion com-pounds
on a rolling three-year cycle, so that not all the currency is
coming in (or not) in one year, and more stability could be built
into projects. The Government, as part of the DETR's review of
local government finance, is considering whether long-term grant
allocations are feasible and desirable. If longer grant cycles
were introduced, each person's allocation could be divided into
one portion that is allocated annually and another portion that
is allocated three yearly, the latter to encourage people to invest
in services over a longer time span. The services could spend
only a third of it in each year, but would have a better idea
of what they had already been pledged over the next three years.
What would happen if people failed to spend
their com-pounds? In effect it would mean money lost to council
services and to the particular communities in which the person
lived. The proposals would need to allow for the re-allocation
of com-pounds unspent by a certain date. This responsibility could
be devolved to area-based sub-committees as well as service communities.
Equally there would need to be mechanisms in place to ensure that
people did not overspend.
What are the implications for council staff
and the services they supply? Council services could be put further
or more directly into competition with each other and may feel
the need to undercut. The introduction of training credits and
independence for FE colleges from local authorities has certainly
meant that further education is delivered in a way that is more
useful to the student, for example Saturday morning courses. But
this may have resulted in reduced pay and benefits, and hours
of work that make it even more difficult for staff to meet their
We would propose that com-pounds be made available
from top-slicing existing budgets or from new money available,
so that if com-pounds are allocated to a particular service it
does not result in immediate loss to another service. In this
way the shift in service provision can be better planned and managed.
What impact would the com-pounds system have
on the relationship between citizens, officers and councillors?
In the current model of local government, citizens are the experts
in services they want or need but are not often asked to express
a view. Officers provide expertise on how they think services
should be delivered, and councillors provide the facilitation.
Councillors would have a representative role in setting the proportion
of the budget that would be allocated to com-pounds, in determining
the local minimum standard or meeting statutory standards and
in the monitoring of service delivery. They would no longer, however,
have control over how the com-poundsthe proportion of the
budget devolved to very local areasare spent. This power
would pass to the local citizens. Thus, a minimum acceptable level
of provision of services and any statutory levels would have to
be maintained by a part of the budget not available for com-pounds.
How much of the remainder Members choose to devolve into com-pounds
is always negotiable through the ballot box, so people could vote
for the candidate who is willing to devolve the most.
The most important test of our proposal is whether
it would actually cause the truly disengaged to engage. It is
possible that it would actually reinforce inequality as those
who are more articulate learn to play the system to their advantage.
The proof of the pudding will be in whether people use their com-pounds
to buy the pudding. We feel hopeful that the proposal would, at
least to some degree, empower even those at the edges of our society.
Its strength is that it is based on a system
that everyone understandsthe spending of personal moneyand
in which all can participate whatever their limitation, whether
it be time, family commitments or mobility. It allows the individual
citizen to affect, more directly and locally than through the
ballot box, how much of their taxes are spent on providing what
services and how. It can enable communities of place or interest
to club together to achieve their priorities, and it potentially
shifts resources to areas where poorer people live. To do this
it may be necessary to provide an education and support package,
including the employment of support staff, to ensure that the
most disadvantaged within communities make best use of the scheme.
There are enough unknowns about this approach
for it to be interesting to set up a number of well-monitored
pilots. Initially these could be linked to government funding
schemes such as SRB and other local area-based regeneration initiatives,
or specific policy initiatives could trial the impact. `Quality
Projects' could use com-pounds not only to change service delivery
standards, but also to change the role and status of traditionally
oppressed groups of clients, such as those suffering mental ill
health and the very elderly, in relationship both to those services
and to local government.
If we are serious about involving people in
the decisions that affect them, let's take our courage in both
hands and devolve some of the decision making to them. It would
be a lot more empowering than focus groups, don't you think?
Pam Dixon and Kate Oliver
Lead Officer: Corporate Initiatives (Job Share),
Birmingham City Council