A church-based initiative to strengthen the engagement of local communities in the public budget decision-making process has won an award in acknowledgement of its role in neighbourhood renewal.

Church Action on Poverty's 'Participatory Budgeting' pilot project in Newcastle Upon Tyne has been recognised with "Neighbourhood Renewal Project of the Year Award".

For the last two years the Participatory Budgeting Unit, part of Church Action on Poverty, has been working with the Newcastle Partnership to bring local communities closer to the decision-making process around the public budget.

Having commissioned the PB Unit to pilot the work over the last three years, the Government has now appointed the PB Unit as the lead agency to roll this work out in every local authority in the next five years.

Participatory Budgeting is a mechanism of local government, pioneered in Brazil, to involve people at a grassroots level in deciding how the investment part of the local public budget should be best spent.

Participatory Budgeting establishes a process in which the effect of people's involvement is seen directly in either policy change or spending priorities. "It is not just a consultation exercise, but rather than an embodiment of direct, deliberative democracy," said CAP.

Results from the pilots have highlighted the potential of Participatory Budgeting to engage far more people in democratic processes, make public services better targeted and cost-effective, build social cohesion by bringing people together in deliberative forums and have particular impact in areas of deprivation.

Mark Waters, Chief Executive of the PB Unit, said: "The 'Neighbourhood Renewal Project of the Year' award is another sign of how Participatory Budgeting is proving to not only increase popular involvement in democracy but to improve the effectiveness of the way public money has been spent.

"Across the world, in Brazil and Newcastle, Participatory Budgeting has shown that people can be more than just consulted but can also be trusted to make detailed and important decisions about massive public investment budgets."

He continued: "It is great to see the skills and hundreds of volunteer-hours of local people rewarded with this award. This process builds new relationships between local councillors, public officers and communities. It shows what can be done when local people are trusted and given some responsibility for spending in their area."