Making participatory budgeting work: lessons from local government

March 17, 2026

Participatory budgeting (PB) is rightly celebrated as a way to give communities influence over funding decisions — from neighbourhood grants and service priorities to whole area budgets. When it works best, though, it is part of something much bigger: an evolution in how decision-making is shared between councils and communities.

To explore this shift, and the role that PB can play, last year we brought together a cohort of local government officers from New Local’s member councils and led them through a four-session “pioneer working group” sprint. They told us that PB works best when it sits within broader movements towards neighbourhood working and community-powered decision making. In this context, PB is less about distributing funding and more about creating the conditions for ongoing collaboration between citizens and the state.

Done well, PB can surface local knowledge that councils don’t otherwise see, bring communities together around shared priorities, unlock new solutions to tricky local problems and rebuild trust between councils and residents.

From our conversations with councils, five strategic insights stood out on how to make PB work well:

Start with purpose, not process
PB only works when councils are clear about what they want it to achieve in a place – whether that’s strengthening neighbourhood relationships, surfacing local insight or shifting how decisions are made. Officers emphasised the importance of fully consideringwhether PB is the right tool to use for the outcomes that you want to achieve before launching a scheme.
Design for your reality
Tightly ringfenced budgets, tight timelines and limited staff capacity can quickly undermine the process. Meanwhile, existing strong relationships with partners and communities are essential for delivery. Design PB around how your place actually works: build relationships, give space to understand local context and connect to wider engagement already happening on the ground.
Use PB to build relationships, not just allocate money
When designed well, PB can create multiple opportunities for communities to shape priorities and strengthen relationships that continue long after the funding decisions are made. Officers also highlighted the importance of balancing digital engagement with face-to-face conversations.
Bring the system with you
PB works best when it draws on expertise from across the council and beyond. External voices are vital to building trust with communities and understanding the complexities of your place. Mapping services that already work in the area can reveal opportunities for collaboration and help embed equality, diversity and inclusion into the design of the process.
Tell the story of shared decision making
Officers emphasised the importance of telling the story of PB, both internally and externally. Celebrating the projects and outcomes that emerge from a PB process helps build support and momentum for future shared decision-making with communities.

What emerged from our sprint was a shared understanding that PB is not a quick fix for shrinking council budgets. At its best, it is a practical expression of a deeper shift – towards councils working with communities as partners in shaping priorities and decisions. Done well, it helps unlock local insight, strengthen relationships and build the foundations for more collaborative, place-based ways of working.

With thanks and acknowledgment to all the participants in the working group from: Babergh and Mid-Suffolk Council, Cambridge City Council, Camden Council, Fife Council, Haringey Council, Islington Council, Oxford City Council, Southend-on-Sea Council, Southwark Council, Royal Kingston upon Thames Council, West Lindsey District Council and Westminster Council.

Useful resources:

Join our mailing list