We have to learn to calculate better The world of urban regeneration is not good at calculations. Don't worry: we are pretty good at calculating the costs of restructuring projects. There was a time when all calculations were the first step towards going over budget; but those times are behind us. We can make fairly accurate estimates, even for complex restructuring projects. But we still can't establish a reasonable picture of the returns side. And every urban renewer can tell you that there are returns. But how much? And when? And for whom? This is an area where we need to do some catching up. Take a look at urban regeneration's 'little sister': the restructuring of business parks. Our understanding of the expenses and the returns associated with restructuring has got much better when it comes to business parks. And the better our understanding, the smarter our financing will be.

The increasing complexity is also making urban regeneration in general increasingly expensive. Sometimes, the expenses are so high that the plans are dropped, or limited to some cosmetic patching up. Anybody who has been involved in failures of financing knows that dropping the restructuring plans is no solution and that the need for implementation will become increasingly pressing and the expenses even higher.

To start with, then, it would be a good idea if we were able to establish a slightly better picture of the benefits of urban regeneration. Which benefits should we be looking at? There are genuine returns as a result of actual increases in value but also benefits in the form of reduced costs in other areas. And the savings as a result of fewer social problems, less poverty and less crime can also be considerable. When looking at new projects, we still concentrate too much on the benefits for the project developers and forget about the social benefits. Or perhaps it's not a question of forgetting them. Perhaps we just can't quantify them.

And then there is the issue of who benefits. The party making the investment is often not the management, and this is also true of the government authorities involved.

Despite all this, a better picture of the benefits can result in new, creative forms of financing. This is true of the restructuring of business parks. And it should be the case for urban regeneration.

I think we should be investing much more energy in learning to calculate future returns. And even in learning how to take control of future returns through our investments.

If we get better doing this, we can draw up completely different budgets for large projects: value-added budgeting. The expected added value and the expected cost savings will then become the decisive factors rather than the initial costs.

And in for a penny, in for a pound: The Reurba² project will be paying more attention to 'value-added budgeting' during the development of the ReUrbA method.

Mark Reede, project manager ReUrbA²