I have just done my lavender hedge which is now 3 years old and nice and compact and a dense green mound. I cut to the base of the flowering stems and just a tiny fraction further into the new growth. That may not be what the textbooks say but it has worked well for me. I dont want to cut too deep into the plants for fear of losing them and yet enough to give it a good shape.

Do you cut the non flowering stems at all or just leave them.

Yes a light trim if necessary to give it a good shape and sometimes a bit harder on straggly side growth.

Youtube has some good video instruction clips from lavender farmers on how they do it. I think they probably prune a bit harder than I do but my little method works for me and gives me a lovely dense green non-woody hedge .

Thank you, that gives me a job for tomorrow.

Yes, just as Inverglen says. Simply shear off the flowering stem, as long as you do not go to far in to new growth you are fine.