Commission vows to cut the red tape

Let’s say you run a small technology company, and want to apply for a European Commission research grant specifically designed to help companies like yours. Get ready for some paperwork.

First, you have to prove to the Commission that your company really is small. And guess what? Its lawyers have written a precise definition for that, and created a series of forms you have to fill out to prove you meet the definition. Time for each small company to fill out the form: Easily, hours and hours. Time for the Commission to read and process the forms: Easily, hours and hours. In fact, handling these forms is the job of about 100 Commission staffers. And all this paperwork is just to prove you are legally eligible to apply for the grant; whether you get it is an entirely different review.

Bureaucratic madness? That’s exactly what the majority of European Union leaders have been saying over the past few years - and in their new, seven-year, €80 billion Horizon2020 research and innovation plans announced 30 November, they have made simplification of the bureaucracy a centrepiece.

“We’re slashing red tape,” promised Máire Geoghegan-Quinn, Commissioner for Research, Innovation and Science. “We want our scientists and researchers to spend more time in the laboratory, and less time filling out forms.”

Indeed, this top-level willingness to reform the EU research bureaucracy was immediately hailed as a step forward by university and industry groups. But the €80 billion question for them all is whether this top-level desire will in fact translate into lower-level action. And the first hints to that are scattered through the roughly 600 pages of detailed regulations and explanations that the Commission dumped on the research and innovation world 30 November as it submitted its formal legislative proposal for Horizon2020 to the European Parliament and Council.

Before reading all that, a little history might help. The EU research programmes have gradually evolved and grown - first, from the 1957 Euratom Treaty that began funding nuclear-power research, and then from the early 1980s when the Commission began funding computer and telecommunications research. That gradually grew into the economy-wide Framework Programme which, already at an aggregate cost of €55 billion from 2007-2013, is the world’s second largest civilian research programme, after the US National Institutes of Health. The next edition, renamed as Horizon 2020, runs from 2014 to 2020 and, if the Commission gets its way, grows to €80 billion.

But as it has grown, so has the bureaucracy to administer it - and so have the scandals that go with big money. The most traumatising of them all was the Cresson Affair in the late 1990s, when former French Prime Minister Edith Cresson, in a new job as EU Research Commissioner, was accused of hiring her dental surgeon as a ‘visiting scientist’ with EU funds. As more problems emerged in Brussels, the affair led to the 1999 resignation of the entire Commission - and since then, the Brussels vow has been ‘never again.’  The result was a rapid rise in audits, paperwork, review committees, monitoring reports, evaluations and - most controversial of all - so-called time sheets to document that scientists in a lab were really working on EU-funded projects when they said they were. Indeed, until recently, the Commission had placed in charge of the bureaucracy one of its audit experts, who had been (and is again now) in charge of its massive farm subsidies.

But pressure for change began rising a few years ago - in part because of a confrontation between the Commission and the main French research agency, the Centre Nationale de la Recherche Scientifique. The Commission tried to claw back about €20 million in research grants - not because of any proven fraud, but because the CNRS hadn’t been doing the paperwork the way the Commission auditors wanted. At the same time, universities in northwestern Europe - the scientific core of the EU - began agitating against all the money they had to spend on staff to understand and comply with the EU grant rules. The European Parliament joined the no-red-tape bandwagon about 2010.

The result was announced 30 November, with a proposed new set of financial regulations for Horizon 2020. Some of the main promises:

• A simpler structure overall - with the sub-programmes grouped into three main goals (promoting excellent science, industrial competitiveness, and solutions to society’s biggest challenges) with one common set of funding rules.

• Simpler and standardised rules for reimbursement of direct and indirect costs of research. This, the Commission promises, entails reimbursing research expenses at one rate, instead of three at present, for all types of participants regardless of whether they are companies (big or small), universities, government labs or other entities. It also entails reimbursing ‘direct’ costs at up to 100 percent for most grants, and 70 percent for prototyping, demonstration and other closer-to-market work. Indirect costs (for instance, the electricity bill at a synchrotron) get a flat 20 per cent reimbursement rate - still leaving researchers to scramble for local funding for the rest.

• Time sheets go - for some. The new rules would let a grant recipient simply certify that the researchers on a project actually worked the time they claimed, rather than keep a time sheet for each one. But that only applies to full-time staff. Part-time and occasional workers on a project are still stuck with time sheets. Grant applicants can use average personnel costs in their forms, rather than individual rates for each type of worker.

• A greater move to online, simplified forms. The Commission has been struggling for years to bring its research paperwork into the Internet Age, but has already started letting repeat applicants re-use their old forms rather than fill out new ones for each grant. That ‘paperless’ approach will apply to the entire Horizon 2020 system. And the dreaded small-company forms will go.

But does the Commission really mean it? That’s the question on the minds of most university and company grant administrators. The Commission promises to cut by 100 days the ‘average time to grant’; that’s about 350 days now. And it further vows that only 7 percent of grant recipients will get a post-grant audit - a paperwork nightmare, especially for small companies.

But it’s the details that matter - and, as you start reading the proposed regulations, the ambiguities and occasional seeming-contradictions are disturbing. For instance, the 100 per cent direct-cost coverage promised publicly on 30 November turns out to be somewhat fuzzier in the regulations: reimbursement “may reach a maximum of 100 per cent of the total eligible costs.” It doesn’t explain “may”.  Then when you try to read the definition of eligible costs, you are referred to yet another document:  “Conditions for eligibility of costs are defined in Article X of Regulation (EU) No xx  [the Financial Regulation/Delegated Regulation].”

And the detailed description of the Commission’s auditing plans give pause. It says it spends €267 million a year on internal controls for Framework Programme 7, with 23 per cent of that on post-grant audits. Then it says its auditors, as they do their work, have been using a 2 per cent error limit in the grant accounting as ‘chief indicator’ of whether the programme is well managed - but will loosen that to a range of 2 per cent to 5 per cent. If you think that sounds like an improvement, think again: A few paragraphs later, the document says about 5 per cent is in fact “the current rate of error.”

Click here for the European Commission's official Horizon2020 Documents.