Germany’s municipal finance officers find room for improvement in how state grant programs are administered. A recent Ifo institute report, released on Friday, analysed data from the KfW Communal Panel and highlights that many treasurers call for a simpler application process and fewer reporting duties. “In particular, municipal treasurers in Germany are demanding a more straightforward application system and less paperwork” said Sarah Necker, head of the Ludwig Erhard Ifo Centre for Social Market Economy in Fürth.
Public grants are essential for funding local infrastructure projects. Nearly 90 % of all municipalities rely on grants from federal, state, and EU sources, which together account for one‑fifth of municipal investment spending. Necker explained that the “complex requirements of the grant process challenge municipalities; the rules are extensive and, from many municipalities’ perspective, do not proportionally reflect the funding opportunity”. She added that uncertainty about whether submitted applications will be approved also adds strain.
Key findings from the 509 open‑text responses are:
” 48 % of respondents emphasize the need for a single, straightforward application.
” 33 % call for simplified evidence requirements and the removal of granular reporting obligations at the end of a grant cycle.
” 31 % find the guidelines themselves too complicated.
” 22 % want greater flexibility in how the funds can be used and in deadline enforcement.
” 20 % desire quicker processing and approval.
While many replies were neutral, some respondents made it clear that municipal bureaucracies feel burdensome. “Removing bureaucracy isn’t solved by generic demands; it requires detailed examination of concrete measures” Necker said. She noted that several answers offered useful hints for targeted reforms.
Less frequently mentioned were:
” Longer application deadlines (18 %)
” Improved accessibility to contact persons (15 %)
” Lower requirements for self‑funding in grant programs (14 %)
” The “windhund” principle, where funds are awarded strictly by application order, criticised by 12 %
” A desire for grant programmes to better reflect local needs, cited by 11 %
The study is based on free‑text responses from 509 municipal finance officers in the 2025 KfW Communal Panel.