Finance officials in German municipalities report a need for improvement in how state funding is awarded. A study published on Friday by the Ifo Institute in the KfW municipal panel shows that many treasurers are calling for simplified application procedures and fewer reporting and documentation burdens. “Municipal treasurers in particular want an easier application process and less administrative paperwork” said Sarah Necker, head of the Ludwig Erhard Ifo Centre for Social Market Economy in Fürth.
Public grant programmes play a pivotal role in financing local investments. Almost 90 % of all municipalities rely on federal, state and EU subsidies, which together account for about one‑fifth of all municipal investment spending. Necker explained that the complex requirements of the grant process pose significant challenges: the rules are extensive, many see a mismatch between the effort required and the level of funding, and there is uncertainty about whether submitted applications will actually be approved.
The survey, based on 509 open‑ended responses, reveals specific priorities. Forty‑eight per cent of respondents highlighted a desire for a straightforward application process; 33 % cited the need for simplified proof obligations and the elimination of minor report requirements at the end of the funding cycle. Thirty‑one per cent reported that fund guidelines are often too complex. Another 22 % wish for greater flexibility regarding how funds can be used and in meeting deadlines, and 20 % asked for faster processing and approval.
While many answers were neutral, several respondents indicated that the bureaucracy surrounding the funding process is burdensome. “Reducing bureaucracy cannot be achieved with blanket demands but requires a detailed examination of specific actions” Necker noted, pointing out that many responses offered concrete suggestions.
Less frequently mentioned were longer application deadlines (18 %), better accessibility of contacts (15 %) and a reduced need for own contributions in grant programmes (14 %). Twelve per cent criticized the “Windhund principle” where funds are allocated in the order applications are received. Only eleven per cent believe that grant programmes should further tailor their criteria to local needs.
