Last weekend central London
was host to a tax protest. The thousands who marched were campaigning against
the council tax, a levy which every household must pay to help maintain local
The tax has been in place
since the early 1990s and supplements the grant ministers make to municipal
authorities. But while the list of services councils must pay for has grown,
the amount allocated by central Government has not increased with the same
Although the government
has grabbed headlines for the amount it has provided for education this year,
its local government grants for other council services (including social services
for children and the elderly and street cleaning) are expected to rise by
less than inflation for 75 percent of councils this year.
To compensate, council
tax rose by an average of nearly 13 percent last year. But these increases
are now beginning to reach the limit of political acceptabilityhence
The public criticism has
pushed the Government into the corner. They now concede the need for a review
and recently published a consultation on local government finance. Meanwhile
the Liberal Democrats, the third force in British politics after Labour and
the Conservatives, have begun a campaign to abolish the property value-based
council tax and replace it with a local income tax.
But why stop there?
Government, voters regularly
argue, 'wastes' the taxes they collect. They believe politicians don't spend
the money properly, allocating it to undeserving causes like asylum seekers
and refugees or failing to provide services local people want, like policing,
waste collection or better public transport.
The problem with this
view is the electorate's lack of understanding of the competing demands politiciansat
both national and local levelsface when deciding which goods and services
to fund; paying for one means less for another.
But replacing the council
tax with a local income tax won't address this problem. All it will do is
swap one form of tax collection and may well maintain the disconnection many
voters feel that they have any stake in the way their taxes are spent.
What we should be looking
at is not only ways of making the tax system fairer, but also how to educate
our electorate in the tough choices politicians must make.
Usually when British decision-makers
want to explore new ways of addressing public services we tend to look across
the Atlantic and the United States: railway privatisation, welfare reform
and industrial relations are just some of the policy issues where we've examined
and adopted American ideas.
But following these ideas
hasn't always been to our benefit. Our trains are neither well-funded nor
run on time, our most impoverished fall through the safety net and our unions
have become increasingly emasculated.
Perhaps we need to start
looking elsewhere for ideas, including from the South. But this means needing
to overcome our hang-ups and reject the assumption that we have nothing to
learn from 'poorer' countries.
And yet if British politicians
can get over their 'superiority complex' I think we should cast our eyes beyond
the American horizon in favour of a horizon further south.
In fact it may be in Brazil
where we can learn how to use our public money better. In particular we could
examine the participatory budget process, an innovation which was first trialed
in the southern city of Porto Alegre since the early 1990s.
For more than a decade,
the Workers Party, the Partido dos Trabalhadores (PT), has had a system of
participatory budgeting. The process brings people at the neighbourhood together
with council experts and elected politicians. Instead of letting politicians
decide how the council's annual budget will be allocated, they and council
officers have to listen to the people at street-level meetings. By doing so
they establish the priorities of each neighbourhood; and those next to each
other may well have different priorities.
Through a series of such
meetings council officers establish the priorities of local people, from the
quality of pavements and lighting to basic amenities like waste disposal,
water supply and school and medical provision.
The participatory budget
process brings together the different priorities from each neighbourhood and
fixes them in a spending plan for the following year. But wait: even at this
level, there are representatives from outside the political class who are
involved. The process requires representatives be elected to serve as delegates
all the way through the participatory budget system, from the neighbourhood
level to the city-wide budget committee.
In this way local people
are able to counter the elected politicians, whose constituency may not only
be voters, but business and the media as well. By including local people at
all levels, from the neighbourhood to the budget-setting meetings, local people
have a real say in how their taxes are allocated and spent.
Not only do local people
get their say in how the council's money should be spent, the process has
been shown to help educate them about what services the council can and can't
provide. Also, there is evidence to suggest this learning experience has also
helped local people become more civic-minded and politically engaged.
In the case of the Workers
Party some of its activists have been drawn through the process; men and women
who might never have thought of getting involved politically were it not for
their involvement in the participatory budget process.
Since the system was pioneered
in 1989, other Brazilian cities have taken the idea to heart. In 1996 the
UN highlighted it as an example of best practice. It has since been adopted
in varying forms elsewhere. The PT has even attempted to introduce the system
at the state level, including in the Federal District under Cristovam Buarque
and during Olivio Dutra's administration of Rio Grande do Sul.
Not for Everyone
The participatory budget
has become such a distinctive feature of PT governance it has been included
in Jorge Bittar's 1992 book, O Modo Petista de Governar (The PT Way
of Governing), a 'how-to' manual for elected PT activists.
But to imagine all PT
administrations have successfully implemented the participatory budget would
be a mistake. At the same time Cristovam was applying the participatory budget
in Brasília, the then PT governor of Espírito Santo, Vitor Buaiz,
had given up on the project. And ironically, the presence and absence of the
participatory budget in each didn't prevent the two from losing the gubernatorial
elections in 1998.
And yet despite this surely
including local people in the use of their taxes is good in itself. Not only
does it make them feel they have a stake in their society, it also helps them
learn about the choices which must be made in politics and might even find
some enthusiastic enough to enter the arenapolitics is beleaguered enough
as it is and needs new blood.
In Britainas elsewhere
in the post-industrial worldpolitical activity is increasingly becoming
the preserve of fewer activists. And less participation also opens the political
arena up to minorityincluding extremistviews. For example in the
north of England several councils have substantial far-right representation.
Much of their support comes from disillusioned voters who believe the established
parties have failed them.
But if we open up the
political process and make it easier for local people to become engaged in
the way their local taxes are spent, then that could help reduce this threat.
The challenge though remains
of whether British politicians have confidence in greater devolution. The
PT in Brazil has shown a way; the question is whether we're prepared to swallow
hard and shun American-based ideas in favour of a solution from the political
As a postgraduate
student, Guy Burton carried out fieldwork on the Partido dos Trabalhadores.
His research, on the PT administrations in Espírito Santo state and
the Federal District (the equivalence to regional governance) between 1995
and 1998, was published in Gianpaolo Baiocchi's Radicals in Power (Zed
Books, 2003). He is the prospective London Assembly candidate for the City
and London East constituency in elections in June. His comments are his
own opinion and do not reflect official Liberal Democrat position. He can
be contacted at firstname.lastname@example.org