Using online tools to deliver participatory budgeting

From participatory budgeting to budget consultation, EngagementHQ’s online tools can deliver budget engagement for small, project-based allocations as well as for citywide budgets.

What is budget engagement?

Budget engagement is a formal process that enables a community to influence how a government invests its tax/rate dollars. It can be used to help prioritise how funds are allocated within a specific project, or how an entire city budget is structured. It’s sometimes also referred to as participatory budgeting.

Traditionally, budget engagement has been delivered through public meetings, community advisory boards, surveys, and focus groups. In recent years, the most effective, transparent, and engaging method has involved online tools, including budget simulations.

User-friendly simulations allow people to make the same type of budgetary decisions as their government and instantly see the potential bottom-line effects. It temporarily puts them in the shoes of the decision-makers, having to balance trade-offs and taking into account constraints and the actual costs (and savings) of services.

What is participatory budgeting?

Participatory budgeting is when a government empowers communities to play an active role in budget deliberations and decision-making. Community members help to build a budget from the ground up or help re-prioritise where specific funding allocations are spent. This type of budget engagement often involves an online budget simulator, such as Balancing Act (an engagementHQ partner). Public consultation software and a budget simulation tool are an effective duo to encourage participatory budgeting and make it easier for more people to understand the context around major financial decisions. More on this below.

What is budget consultation?

Budget consultation is when a government seeks community input into budget decision-making at a more strategic level. It may involve gaining an understanding of community satisfaction levels and priorities to help determine where funds are allocated when the government deliberates its budget. This can involve online tools such as engagementHQ’s survey and Q&A functions.

What is a budget simulator?

It’s an online tool that provides citizens with a simulation of their government’s budget and allows them to move funds around and see bottom-line impacts and benefits. It helps people see the components of the budget – including revenue and expenses – breaks down funding for key services and investment, and gives people an opportunity to prioritise how those funds are spent.

Enabling community budgeting and participation

Participatory budgeting enables a community to be meaningfully involved in budget decisions that impact them. It helps people understand and appreciate the challenges involved in setting a budget and prioritising funding – whether for a project or an entire city budget. It’s a genuinely transparent and tangible way for the community to influence funding decisions and, when done right, is one of the most effective ways to build trust between citizens and government.

It is most effective when you have a genuine opportunity (and appetite) for the community to influence how funds are prioritised and allocated. It is particularly impactful when a government needs to:

• make budget cuts or tough/potentially unpopular budgeting decisions (e.g. in the wake of an economic downturn or reduction in revenue)
• build trust with the community (e.g. if a government has reputational challenges)
• allocate funds to a project where are a number of viable options and diversity of community opinions on a preferred outcome (e.g. funding play equipment in a park)

Benefits and outcomes of participatory budgeting

Budget engagement has the potential to:

• encourage a ‘compromise’ mindset for participants
• prompt people to think more strategically about what’s important to them and their community
• create empathy for those who have to make hard budget choices

Engaging on Citywide Budgets

Many community members don’t fully appreciate the complexities involved in developing a budget, particularly a city budget. This can lead to distrust and even anger when unpopular decisions are made.

By having the opportunity to use an online budget simulator, communities can learn how budgets are structured and how decisions are made. They have a chance to be the decision-maker and see the challenges and the impacts of those decisions, as well as the trade-offs required for particular outcomes.

Budget simulations:

• show the relationship between revenue and spending
• show bottom-line effects of decisions
• convey the need – and difficulty – of trade-offs
• empower citizens to help make those trade-offs

The Royal Borough of Kingston upon Thames (UK) used engagementHQ’s budget simulator Balancing Act to empower citizens to review its proposed budget and ask how they would balance the available bottom line. Participants were invited to share ideas on how they could make savings or deliver services differently. The context (in 2020/21) was that the council was facing financial challenges after no longer receiving general funding from the government.

In another example, the City of Stillwater (USA) invited its citizens to show how they would balance the budget, while Wellington City Council’s Annual Plan holistic approach to budget consultation envisaged a ‘hands-on’ community approach to balancing budget demands.

Project-based Budget Engagement

As with a citywide budget, project-based engagement for smaller scale locations empowers citizens and helps them understand the trade-offs required when allocating finite funds. It provides a transparent and democratic method of decision-making when there are a number of viable options for how funds can be invested in a particular project.

Wagga Wagga City Council (New South Wales, Australia), for example, adapted engagementHQ’s budget simulator so it could be easily used by children to match play equipment with different parks in the city. Council re-named the tool ‘The Funbobulator’. In addition, Blue Mountains City Council (New South Wales, Australia) used Wagga Wagga’s Funbobulator to help children to make decisions about their favourite parks (along with their parents and other community members).

The Three ‘C’s of Budget Engagement

Things to think about in participatory budgeting...

In any form of budget engagement, it’s important participants clearly understand what is being asked of them and why.

Participatory budgeting is an excellent way to connect with and empower your community in decisions that impact them — in a way that also broadens their understanding of government budgets and their challenges.

Reach out to us to learn more about how budget consultation and participatory budgeting could be implemented in your community.