The Federal Office for Building and Regional Planning

Publication Contingency funds in Urban Renewal and Development Programmes

Abstract. Ed.: BMVBS, Berlin 2013

Series: BMVBS-Special publication Published: 2013

Project management:
Quaestio Forschung und Beratung, Bonn
Bernhard Faller, Nora Wilmsmeier
Urbanizers Büro für städtische Konzepte, Berlin
Marie Neumüllers, Lutz Wüllner, Kai Steffen, Paula Quentin

Federal Institute for Research on Building, Urban Affairs and Spatial Development (BBSR), Bonn
Michael Zarth michael.zarth@bbr.bund.de

Abstract

Contingency funds in Urban Renewal and Development Programmes

Contingency funds or neighbourhood budgets are an instrumentmentioned within the guidelines for the mutual funding of urban renewal anddevelopment programmes by the German Federal Government and the Länder. Its contribution to achieving the programmes' targets has recently been subject of discussion, which was the main reason for the Federal Ministry of Transport, Building and Urban Development and the Federal Institute for Research on Building, Urban Affairs and Spatial Development to commission this study.

Contingency funds, non-revolving budgets of usually 5.000 to 25.000 Euro, are provided in a growing number of urban districts to encourage the area's stakeholders (residents, traders, clubs, etc.) to conduct their own projects and activities as well as to engage in their neighbourhood's future. Local stakeholders are enabled to apply for project-related funding, which is approved by a locally appointed decision-making board. Contingency funds have been designed and implemented as a means of participation within the Socially Integrative City programme for a good ten years. Since 2010, the Federal-Länder guidelines encourage implementation of similar budgets also for the other urban regeneration programmes. For these, a 50:50 mix of public funding and co-financing from other sources is required.

The aim of this study was to analyze the current state of application of contingency funds in the Federal-Länder urban renewal and development programmes. Based on the analysis and evaluation of the actual design, functionality and efficiency of the instrument in local practice, policy recommendations are presented for its further application and development.

The investigation was carried out in 2011. It is based on an online questionnaire delivering data for 84 programme areas of the Socially Integrative City, on expert interviews with country representatives and other professionals (e.g. transfer agencies of the urban regeneration programmes), on research conducted by the transfer agency for the Active City Centres programme, and as a core element on ten exemplary case studies.

Case studies were conducted in:

  • Socially Integrative City Programmes: Bergheim (North Rhine Westphalia), Berlin-Spandau, Leipziger
    Osten (Saxony), Mainz-Neustadt (Rhineland Palatinate), Mannheim-Rainweidenstraße (Baden-Württemberg), Rostock-Schmarl (Mecklenburg Western Pomerania),
  • Active City and Neighbourhood Centres Programmes: Finsterwalde (Brandenburg), Hanau (Hesse), Marktoberdorf
    (Bavaria),
  • Urban Restructuring in West Germany Programmes: Dortmund-Rheinische Straße (North Rhine Westphalia).

Interim results were discussed and qualified with 30 experts and case study representatives during a one-day-workshop in January 2012.

Key Results of the Study

Contingency funds are a flexible instrument for strengthening local processes in neighbourhood development. They exert their greatest effects in fostering networking and promoting local processes. The instrument makes an important contribution to the support and consolidation of existing network structures and helps as a start-up funding for pioneering work in the neighbourhood. Currently, contingency funds are mainly used in the two programmes mentioned above. However, they are also suitable for implementation in all other Urban Development Programmes and can be adjusted to their specific objectives.

Basic requirements for successful implementation are:

  • Identification and activation of potential local private or other funding sources to match the public share,
  • Provision of human and financial resources for the considerable effort for organisation, communication and management,
  • Establishment of a decision-making committee or assigning the decision-making to an existing body of local stakeholders,
  • Existing or evolving small local private or civil society supported actions in accordance with programme objectives,
  • Willingness to shift decision-making and programme guidance from the administration to the public of the neighbourhood.

It is recommended for each contingency fund and the related decision-making board to develop their own framework, guidelines and procedures depending on funds available, people and organisations participating, goals to be achieved, and local needs. Existing integrated development concepts can provide the framework for objectives. Also, the contingency fund should be anchored within these concepts. Federal, state and communal policies can provide valuable help e.g. through best practice examples, but the flexibility and local adaptability of the instrument should always be ensured.

The administrative and organisational overhead of contingency funds is high and cannot be managed without proper staff. A local area management is almost a prerequisite for a working fund. An external monitoring by competent agencies can be useful. Furthermore, the involvement of locally based initiatives for the field work is essential. Activation of residents depends on the advice and support through a permanent contact person.

The decision-making committee is the backbone of the contingency fund. Moreover, as a result of long-term cooperation, it often becomes a valuable source for knowledge transfer within the local context. Regardless of programme targets residents of the neighbourhood should be included. In addition, local stakeholders e.g. from business, societies, associations or public agencies can be represented in the committees. Employees of the administration or their commissioners (e.g. redevelopment agencies or planning offices) need not be excluded, but should not dominate the board. Their participation in meetings may accelerate approval processes.

Contingency funds as part of integrated development approaches are particularly suitable for objectives regarding social, cultural, economic or environmental goals or public space. Many applications address small-scale measures such as local festivals, cultural and recreational activities and educational opportunities. For many investment projects, more suitable means of funding exist. The key quality of contingency funds is a flexible approach which ensures commitment of different people and groups within a local neighbourhood. It strengthens local networks and identification and is therefore a most useful part of a long term neighbourhood improvement strategy. This conclusion is supported by German and international examples of similar procedures investigated as part of the study.

It is therefore recommended to alleviate contingency funds throughout all Urban Renewal Programmes designed by the Federal Government and the Länder. Local municipalities should be encouraged to use part of their allocated funding from the programmes to co-finance neighbourhood budgets and thus have the local stakeholders actively participate in their area's development. To this means, the study contains a number of recommendations aimed at the Federal Government, the Länder and the municipalities respectively.


This publication is only available in German: "Verfügungsfonds in der Städtebauförderung", Ed.: BMVBS, Berlin 2013
urn:nbn:de:101:1-201305154141
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