Using Public Funds to attract other investment

Summary: Introducing special programmes can help regeneration of a neighbourhood, but such programmes are limited in scope, scale and time. They should be used to attract other funds. Existing resources – both ordinary public funding and individual efforts of the citizens and stakeholders – must be employed for regeneration if its effect has to last. While public funding can be made more cohesive by administrative effort, individual efforts must be guided without taking control over decision making.

The concept of employing public investment to attract private investment is widely used in case of physical infrastructure for triggering further commercial development and business in the neighbourhood. The principle can well be extended to other fields of "soft" investment, as providing free knowledge and making action of multiple stakeholders cohesive. It is not easy to attract large-scale private investment into development schemes, and it may take a major improvement of preconditions, often beyond the powers of a neighbourhood regeneration programme. Yet consistent long-term efforts are usually rewarded by creating credibility and investment starts flowing in.

• Existing ordinary funding can often be used with greater effectiveness. It is usually arranged sectorally without cross co-ordination, hence there are reserves for synergy. Yet you must remember that it may be easier to give impact to regeneration with flexible new funding, than move around existing ordinary funding bound by multiple regulations. There are many ways to achieve that synergy, but the most important factor by far is introduction of cross-sectoral criteria of success to public administration units. It can also be helped by devolution of responsibilities to the neighbourhood level, provided same criteria are introduced on the local level. An interesting case is the local council experiment in Copenhagen (see Kongens Enghave Case Study)
   
• Perhaps a resource most overlooked is the effort that individual stakeholders are putting into the development of a neighbourhood. By sheer volume of activity and investment, it many times exceeds public support.

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The issue to tackle is how to combine direct control of regeneration actions (managed by a local authority or any kind of a programme office) and targeting actions, independently taken by the individual stakeholders, by building their awareness of regeneration objectives. It is important to remember, that not all stakeholders may be willing to accept additional responsibilities, and many of them in a deprived area may lack individual and organisational capacity to take individual actions benefiting regeneration, hence such capacities may have to be built. Ultimately, success of regeneration depends on individual actions of the stakeholders – the managed programmes can only give directions and build awareness and capacities, as their funding and therefore existence is limited in time. Here, it is important to implement the principle of contributing by non-involvement – so that individual, unorganised and ungoverned action helps regeneration, as only few stakeholders will choose to associate into voluntary bodies for regeneration purposes after an intensive managed programme is completed.

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