Last Saturday for the first time in 50 years Linfield, a traditionally Protestant football team in Belfast, played a match in west Belfast against local heroes Donegal Celtic. Linfield won and the event passed off without incident. Priceless, as the ad would say. But building the peace in Northern Ireland has not come cheap.

This week saw the publication of a report on the impact of Peace II programme funding to date. This is a near €1 billion fund from Europe which aims to address the legacy of the conflict and take opportunities arising from the peace.

These are laudable aims for a deeply divided society, but somewhat nebulous too. Who got the money, why and what did they achieve with it? Shaun Henry is the programme director for the Special EU Programmes Body which administers the Peace II fund. "We wanted people most affected by the Troubles to get an economic payback," he says.

If the peace process at a political level lurched from crisis to crisis, money was available for peace-building on the ground, he says.

In fact, according to Henry, the fund was the only consistent sign of a peace dividend at local level. "It made it real for people and it made a difference. It kept the communities engaged."

But peace money has its cynics and sometimes events seem to prove them right. For example, a few months ago a UDA "brigade" caused widespread disbelief when it demanded £8 million of government money in order to disband.

For peace-building to work, however, former paramilitaries have to be part of the equation. Some of the projects funded by Peace II included working with ex-prisoners, in many cases providing community jobs for them.

At a structural level, the areas most affected by the Troubles got facelifts, childcare facilities and community centres. New workspace areas were created where locals could develop small businesses. Most importantly, projects were created to foster cross-community contact.

"We're dealing with a highly segregated society, residentially and educationally, so there are very few opportunities for social interaction between communities," says Henry.

Regular contact has helped bring down barriers. This summer's parade season passed off relatively peacefully, helped in some part by mobile phone contact between community workers on either side during the contentious parts of the parades. Such contact would have been unthinkable just a few years ago.

Aside from introducing people from either side of the sectarian divide, Peace II funded cross-Border programmes. In many cases this meant that people from a unionist background met people from across the Border for the first time. For example, under the Patch programme, members of a history society in Drogheda watched the Battle of the Somme commemoration parade in east Belfast, as guests of a local group.

Henry admits that none of this work lends itself to normal "value for money" measurements.

Figures from this week's report show that 46,000 people participated in Peace II projects and about 9,600 gained qualifications. The bulk of the money, €547 million, went on economic projects, and these created 1,950 new jobs. Training accounted for another €221 million. Social inclusion related projects were given €147 million.

According to Philip McDonagh, chief economist of PricewaterhouseCoopers in Belfast, the jobs created on the back of the peace money were a bonus. "The real economic impact was on empowering local communities, getting people working at that level, improving the local economic situation," he says.

Alan Bridle, chief economist at the Bank of Ireland in Northern Ireland, agrees that the peace money has paid dividends.

"There's plenty of evidence that the peace money has worked. There's no doubt people have benefited in the areas that bore the brunt of the Troubles. The questions you really have to ask is what it would be like if that peace work hadn't been carried out," he says.

According to Bridle, the requirement for peace-building has meant that the main effect of European money in Northern Ireland has been to sustain consumption and maintain living standards. This differs from the Republic where the vast bulk of funds were invested in infrastructure. But infrastructural investment hasn't been ignored.

Another European fund, Building Sustainable Prosperity, with a value of €929 million, has invested in various building projects. The fund paid for the construction of a gas pipeline linking Carrickfergus to Derry, the refurbishment of the Foyle bridge and a computers for schools programme.

But the North's infrastructure requires still requires serious investment and is the next clear funding priority. Some £18 billion has been earmarked under Gordon Brown's economic package to a devolved Assembly.

Meanwhile, the next round of peace money, which will run until 2012, is being drastically cut to just €200 million - about a fifth of the last round. If peace money has created a level of prosperity within some of the most deprived communities in the North, surely its absence will be keenly felt?

Shaun Henry says that some peace-building activities will naturally come to an end. "Going forward, we'll be focusing on core reconciliation projects. We still have high levels of sectarianism and we need to focus community and civic leaders on that issue," he says. He also points to the new challenges that are arising for Northern Irish society, namely the influx of migrant workers and the racism some are experiencing. New communities are being created and these too will have to be integrated into the Northern Ireland of the future.