Capacity-building is the process through which individuals and organisations can obtain, strengthen and maintain the capabilities to set and achieve their goals.^[1] Capacity-building is important for local governments as they adopt increasingly sophisticated policies, management practices and an integrated planning culture.

There are three broad types of capability. These are: (i) institutional or organisational capacity (the policies, structures, process, rules and procedures that allow local governments to operate and provide leadership in their jurisdiction); (ii) human capacity, which refers to (the experience, tools and knowledge mastered by the employees of local governments which enable them to identify, analyse and respond to people’s needs,  ensure their implementation and assess their impact); and (iii) societal capacity (the empowerment of the community, NGOs and city residents, including those that face disproportionate barriers to economic opportunities). It is important to recognise these types of capability in order to not only hold local governments and administrations accountable for the services they offer, but also to participate more effectively in community management and the labour market.

Human capacity-building focuses on strengthening different types of abilities and skills within local governance. Organisational skills are associated with efficiency in programme and project management, tax collection and procurement processes, and municipal finance management. Technical skills target particular areas of expertise in specific sectors, such as urban planning, water and sanitation engineering, waste management, and transport engineering. Behavioural skills have to do with cultural shifts and changes in attitude among all stakeholders, including residents, such as for encouraging multi-level cooperation or waste prevention.^[2] Incorporating digital technologies can further ease administrative burdens, promote greater cooperation between stakeholders and allow for more oversight and transparency in operations.

Another essential aspect of organisational and human capacity-building is to enhance awareness of inclusivity. At the organisational level, inclusivity elements, such as equal opportunities, gender-responsive budgeting and inclusive procurement, must be integrated into the policies, structures and procedures of government institutions. At the individual level, it is important to provide inclusivity training to government officials or private-sector employees, to ensure that they can understand and respond to the needs of all population groups.

Societal capacity-building enables under-served groups to better benefit from public services and allows service providers to improve their operational performance. This capacity-building comprises various interventions, including networking, skills exchange, leadership development, technical training, organisational development and social marketing.

A number of potential activities are aimed at promoting well-targeted capacity-building within a public administration. Initial diagnostics should help identify relevant shortcomings in capacity. Legal stipulations can require capacity-development plans and/or budget allocations for all implementation programmes. Regular staff-training programmes or requirements for continued learning can be put in place among public-sector employees. Project partnerships with higher levels of government, public or private organisations, academic institutions and civil society groups can also involve capacity-building. Moreover, external expert consultants from private organisations or academic institutions with sectoral or technical expertise can provide skills that are required for a specified period of time, as opposed to training internal staff.

Budget constraints may be a key implementation obstacle, but clearly defined needs and plans with well-defined objectives and performance indicators may help mobilise funding and support from central governments, international networks or organisations, or NGOs.

Another challenge is to ensure the sustainability of capacity-building programmes. Often, knowledge and skills are gained by individuals but not retained at the institutional level, hence turnover among government officials may weaken the capacity of these institutions. Therefore, it is vital to design and implement capacity-building initiatives in a structured and sustainable manner, with longer-term and continuous institutional support.

Learning from the experiences and outcomes of initiatives by other cities or local governments, for example, by joining coalitions of cities, is another way to build capacity. A successful example of cooperation among municipalities and regions is the Network of Towns and Cities towards Sustainability created in 1997 by the Barcelona Provincial Council. It allows municipalities to exchange knowledge and pool resources. A particular success has been the working group on the Covenant of Mayors, which, along with other support from the Barcelona Provincial Council, has meant that most municipalities have now drawn up local-level sustainable energy action plans.^[3]