1. Reference budgets: current approaches and comparability
Bérénice Storms & Tim Goedemé
Herman Deleeck Centre for Social Policy – University of Antwerp
EMIN – Peer Review: Use of Reference Budgets for Policy Purposes
Antwerp- 18 &

2. Outline Introduction Reference Budgets in Europe: current approaches
Comparability: why-what-how?
Conclusion: way forward

3. 1. Introduction: previous projects on RBs
PROGRESS project on ‘Standard Budgets’ ( )
Current reference budgets not comparable
Need for an overall theoretical framework & research on involvement of focus groups
Peer Review on reference budgets (2010)
Common method should include focus groups and expert knowledge
FP7 funded ImPRovE project ( )
Common method: meaningful results (see presentation Tess Penne) are possible- coordination is key
Pilot project on the development of a common method for developing cross-nationally comparable RBs in 26 EU MS ( )
State of play RBs in EU- method proposal- 26 food baskets, 8 health & personal care basket- 10 housing baskets
A large research agenda

4. 1. Introduction: pilot project- 3 reports
Pilot project on the development of a common method for developing cross- nationally comparable RBs in 26 EU MS ( )- Three reports:
Storms- Goedemé- Van den Bosch- et al. (2014). Review of current state of play on reference budget practices at national- regional- and local level. Pilot project for the development of a common methodology on reference budgets in Europe- Contract no. VC/2013/0554- Brussels: European Commission- 150p.
2. RBs in EU: current approaches
Goedemé- Storms & Van den Bosch (2015). Proposal for a method for comparable reference budgets in Europe- Pilot project: developing a common methodology on reference budgets in Europe- contract no VC/2013/0554- Brussels: European Commission- 104p.
3. Comparability: what-why-how?
Goedemé- Storms- Penne- T et al. (2015)- The development of a methodology for comparable reference budgets in Europe - Final report of the pilot project- Pilot project for the development of a common methodology on reference budgets in Europe- Contract no. VC/2013/0554- Brussels: European Commission- 339p.
Possible use of reference budgets (presentation Tess Penne)

5. 2. RBs in EU: current approaches
Review of current state of play (2014): reference budgets popular, but constructed in isolation to each other
Overview of the diffusion of RBs practices in EU
Commissioning entities, purposes and users
Targeted living standard & population
Theoretical and methodological approach
Adjustments and updates
Conclusion

6. 2.1 RBs in EU: overview current approaches
RBs have been constructed in every EU MS:
In use 2014 and earlier: AT-BE-BG- CZ- DE- DDK- EE- EL- ES- FI- FR- HU IE- IT-MT- NL- PL- PT- RO- SE- SI- SK- UK
In use 2015 or later: CY-LU
Not in use anymore: HR-LT-LV

7. 2.2 RBs in EU: commissioning entities-purposes-use
Research institutions and national statistical offices
National governments and civil society organisations (e.g. trade unions, NGOs)
Purposes:
Macro-level
assess adequacy of social benefits
evaluate validity of AROP or to measure poverty
Micro-level
Financial and debt counselling
Users:
Researchers- civil servants- NGOs- civil society- social workers
Individual consumers and courts

8. 2.3 RBs in EU: Targeted living standard & population
‘Minimum living standard for social participation’ (recent RBs)
But concept of social participation is almost nowhere clearly defined
‘Minimum for physical needs’; ‘Subsistence minimum threshold’ (mainly past RBs or RBs in new member states)
Targeted population:
Geographical focus:
Mostly referring to national level, sometimes capital or a large city
A minority differentiates between urban and rural areas.
Model families:
RBs for: singles, couples, couples with children, single parents
Differentiations according to age of children and adults , housing situation, working conditions
Specific underlying assumptions (health)

9. 2.4 RBs in EU: Theoretical and methodological Approach
Theoretical approaches:
Pragmatic approaches with little or implicit theoretical notions
Expenditure approaches (Orchansky, 1965)
RBs are mainly based on consensus in focus groups
Walker (1987) and Middleton (2001)
RBs developed within a theoretical framework
Theory of Human Needs (Doyal and Gough, 1991)
Capabilities theory (Sen, 1980,1985,1993) & Nussbaum (2000,2011)
Information bases: scientific and expert knowledge- (household budget) surveys-focus groups- (inter)national and regional guidelines
Mostly combination, because all have their strengths and weaknesses

10. 2.4 RBs in EU: Theoretical and methodological Approach
Information bases
Strengths
Weaknesses
Official guidelines
‘official’ consensus
Maximise responsiveness
Can show private cost of official goals
May be dated
May be influenced by other concerns (budgetary, feasibility,…)
Survey data
Representativeness
Easy to compute
Statistically reliable
Risk of circularity
Well informed opinion unfeasible
Focus groups
Experientially grounded knowledge through informed discussion
Well informed acceptability check
Not representative
Robustness: composition, role of moderator, high speed interaction
Scientific knowledge
Strong foundation through systematic observation
Not always conclusive
Does not cover all functions/needs
Expert knowledge
Founded on professional experience
Robustness
May lack acceptability

11. 2.5 RBs in EU: adjustments and updates
Adjustments: changes in price
Update: changes in living situations
Frequency and used method differ greatly between countries
In almost half of the RBs the Consumer Price Index is used to adjust for price changes

12. 2.6 RBs in EU: conclusion review of current state of play
Reference budgets are popular, but constructed in isolation to each other
 Missing comparability

13. 3. Comparability Why comparable reference budgets?
What are comparable reference budgets?
How to strive for maximum comparability
Comparability: lessons learned

14. 3.1 Comparability: Why?
Monitoring policies (anti-poverty ; adequacy of minimum income protection)
Mutual learning, best practices
Identifying priorities in social policy (intermediate benchmarks)
Enriching the research on affordability of public goods and services (housing, energy, water, …)

15. 3.2 Comparability: what? Comparability
Procedural comparability: same procedures
Substantial comparability: procedural comparability, with procedures that guarantee the same phenomenon is captured similarly in different social contexts
RBs: needs for social participation are fulfilled at a similar level
Procedural comparability = minimum, but not enough

16. 3. Comparability: procedural comparability is not enough
% AROP

17. 3.2 Comparability: what? Comparability
Procedural comparability: same procedures
Substantial comparability: procedural comparability, with procedures that guarantee the same phenomenon is captured similarly in different social contexts
RBs: needs for social participation are fulfilled at a similar level
Procedural comparability = minimum, but not enough
Substantial comparability should be maximised:
RBs differ because, and only because, of differences in:
Institutional context
Cultural context
Geographical and physical living conditions

18. 3.3 Comparability: how? Common theoretical framework:
Common targeted living standard: minimum resources required to adequately participate in society
≈ Being able to adequately play the various social roles one should be able to take as a member of a particular society
Common targeted population:
All well-informed, self-reliant, in good health, in capital city
Common definition of essential needs:
2 universal needs: health & autonomy (Doyal and Gough, 1991) & 10 ‘intermediate needs’ (baskets)

19. 3.3 Comparability: how? Common procedures
Common handbook, containing for each intermediate need:
Importance for fulfilling universal needs
Essential functions to be fulfilled & argumentation for the selection of included goods and services (using a wide range of evidence)
Common pricing procedure
But: being responsive to local circumstances, by:
Using national guidelines and regulations
Using national information on access to and costs of government-provided goods and services
Using national information on institutional and cultural differences
Consultation of focus groups

20. 3.4 Comparability: lessons learned
Procedural comparability requires extensive cross-country coordination
Substantial comparability remains illusive (due to data gaps, robustness of data)
Important differences across countries in the supply of public goods and services by the government, e.g. in health care and education.
Pricing items in a comparable way in all countries is more problematic than expected

21. 4. Conclusion & way forward
Strong demand for RBs in all EU MS
Relevant both at the national and international level
RBs can be very helpful for social policy and foster discussion about how to realise a decent living standard for all
Also academically high potential
Still a large research agenda

22. 4. Conclusion & way forward
Wide interest among researchers to continue network and research
Strong need for information exchange, mutual learning & developing further standards that help improve quality and facilitate national & comparative research
22 & 23 /2/2018: Setup Meeting EU-platform on Reference Budgets:
European network of researchers and institutions involved in the development of reference budgets.
(under construction)
47 registered members - 25 EU-MS

23. 4. Conclusion & way forward
EU-platform on Reference Budgets, main goals:
to support the development of national and cross-nationally comparable reference budgets that are in accordance with the highest academic standards in all EU member states;
to collaborate on improving the theoretical, methodological and infrastructural foundations and applications of reference budgets;
to organize a dialogue with societal stakeholders;
to function as a point of reference and gateway to expertise on reference budgets in the EU.
Start up 4 working groups:
Organisational setup of the platform and long-term planning;
The use of comparable survey data;
Tools based on reference budgets and used by stakeholders;
The involvement of citizens.

24. Thank you for your attention! Questions?