Getting priorities right – or creating synergy

Summary: Use the extraordinary funding efficiently: do not confront a choice between resolving the problems and building capacity to accommodate change – use synergies of both

The extraordinary public funding to alleviate problems always creates a problem of choice: is it more efficient to alleviate problems or change a fundamental aspect that causes these problems to emerge? Or, from another angle: to invest in "hardware" or to cover running costs of revitalisation? While the answer to both questions is clearly: both at the same time, it may be difficult to achieve in practice, and not only because political systems want to spend less and achieve quick successes to satisfy the electorate – many stakeholders have different contradictory interests. The polarity of problem alleviation vs. changing the fundamentals is not the only polarity involved in this issue:

• How to make regeneration sustainable? In other words, how to prime the pump? By providing temporary gap subsidy (e.g. subsidising activities that are initially loss making), or building capacity of the stakeholders that they are able to overcome problems by own effort? What is more effective from financing point of view – incentives to particular actions or improvement of overall reputation of the neighbourhood?
   
• How to determine effectiveness of measures, or how long and how much does it take to achieve sustainability? When to stop throwing good money after bad money, yet not to throw the baby out with the bath water?

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There are no universal recipes how to resolve issues of prioritisation. Many problems have to be alleviated or at least softened before any awareness and capacity building can start, as it requires confidence of the stakeholders in regeneration and mutual trust. It takes a relatively long time and much money to have development taken over by market forces, and that speaks for awareness and capacity building against gap subsidies. Awareness and capacities built last longer after subsidy is withdrawn than activities generated by subsidised monetary incentives. Such activities tend to cease when the subsidies are withdrawn, unless other incentives are built simultaneously. Yet starting conditions are so bad in many of the deprived neighbourhoods that the stakeholders simply cannot mobilise any resources to invest at the beginning, if such a "starting capital" is not provided. The best advice is to design the extraordinary funding multifaceted, so that multiple issues are addressed simultaneously, and flexible, so that it allows swift changes according to results of monitoring. In any case, if the negative trend is not reversed, the insufficient extraordinary funding is wasted and results in forced increase of ordinary funding. That may warn against starting without ensuring or at least envisaging the sources and feasible extent of necessary extraordinary funding.

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