Horizon 2020: ‘The devil is in the details’

A major objective of the Commission’s new €80 billion Horizon 2020 research programme is to cut the red tape. It promises to simplify its grant-writing procedures so the average ‘time to contract’ accelerates to 100 days from a year at present, time sheets are no longer required for full-time researchers, and a simplified two-step reimbursement procedure begins.

For anyone who has had to struggle with the red tape of a typical EU grant, that should sound like paradise. But will it work? That’s one of the topics the European Parliament will address today (20 March) in a public hearing about Horizon 2020. Science|Business went ahead, and has asked some of the programme’s main stakeholders from industry and academia that same question over the past few weeks.

The answer: Well, not necessarily. It depends on the specifics that the Commission develops over the next 18 months as the proposal wends its way through the torturous EU legislative process.

“The devil is very much in the details,” says Paul Boyle, president of Science Europe, the association of Europe’s national research funding organisations.

Europe has to wait and see if the Commission can deliver on its promises, said also Volvo’s executive vice president Jan-Eric Sundgren: “Certainly the Commission has not gone too far, they should be commended for their high ambition. However, the proof is still in the pudding.”

If that sounds inconclusive, well, welcome to Brussels. But for just proposing the changes, the Commission gets credit from many. Horizon 2020 represents a 46 per cent funding increase from the current R&D plan, Framework Programme 7 – and would constitute more than 5 per cent of all European-wide public research funding. So putting a cut in red tape high on the agenda, alongside that €80 billion, has plenty of fans.

“Science moves very quickly and anything that the Commission can do to speed up its procedures is welcomed. We support simplification which does not compromise on scientific quality and good governance,” said Richard Bergström, Director General of the European Federation of Pharmaceutical Industries and Associations (EFPIA).

Kurt Deketelaere, secretary general at the European League of Research Universities (LERU), believes the potential for success is there: “Streamlining common rules for all parts of Horizon 2020 will facilitate and stimulate much higher participation in a wider variety of programmes and will lead to more efficient project administration, not only for the European Commission, but also for the beneficiaries.”

The proposed changes show the Commission sees its role differently, believes Leontios Hadjileontiadis, Professor at Aristotle University of Thessaloniki: “It was about time for the Commission to realize that by no means is there a lack of excellent researchers and innovative enterprises around Europe, but a lack of effective liaisons that actually bring together these innovation sources with the financial support,” he said.

The Horizon 2020 plan is in itself a paperwork mountain – more than 600 pages of bureaucratese poured forth from the Commission on the day, 30 November, it unveiled it. But with the benefit of a few months of study, the main lobby groups involved have come to some conclusions on some of the specific questions. And the Commission is already engaged in a series of meetings with them, to hear their analysis and make some changes in the plan. At the same time, meetings are going on with the European Parliament, and the individual member-states, to arrive at a consensus.

The Danish Presidency of the EU has set 31 May as a deadline to agree on some broad principles for how Horizon 2020 will work. Then comes the serious work, next Autumn and Winter, of arguing about the budget for it all. Few expect all €80 billion to get through unscathed, at a time of austerity across most of Europe – but a considerable increase is politically probable.

Here is a run-down of views on some of the key issues.

1.     Yes to the ‘trust-based approach’

An emphasis on trust is important in order to tackle complex procedures, argues Sundgren of Volvo: “Particularly for small and medium sized companies it is of paramount importance that the present bureaucracy is cut. Instead we need more focus on a trust and risk based approach.”

Deketelaere of LERU is also strongly in favor of a more trust-based approach, “We strongly hope that Horizon 2020 will continuously, effectively and completely implement this trust-based philosophy in all control and audit procedures.”

Bruno Pedrotti, senior advisor at employers association Business Europe, adds some specific advice for the Commission: “To encourage a trust-based approach, Business Europe calls on the Commission to elaborate guidelines for EU officials dealing with project financing as a clarification for the provisions on personal financial liability in the Financial Regulation and Staff Regulations.”

“This could possibly be done by drawing on the experience of member states on the matter and should incentivize a more proactive and risk taking attitude in full compliance with Commission internal regulations,” said Pedrotti.

2.    A ‘flat rate’ is great – but at what rate?

The Commission has proposed that Horizon 2020 should have one funding rate per project, instead of the three different rates in the current framework programme. Furthermore, the Commission proposes one single flat rate covering indirect costs, instead of the four methods in FP7 to calculate indirect costs.

Science Europe’s Boyle says it remains to be seen whether the new reimbursement proposals will help achieve simplification: "There will be in fact two reimbursement rates: one for ‘pure’ research projects set at 100 per cent and one for projects ‘close to market’ set at 70 per cent."

“Coupled with the relatively low flat rate for indirect cost of 20 per cent, this could create a disincentive to coordinate projects, especially in projects with an innovation component and industry involvement where reimbursement will be lower,” says Boyle.

John Smith, deputy secretary general of the European University Association (EUA), agrees with Boyle: “The proposed lowering of the indirect costs flat rate to 20 per cent in comparison to 60 per cent in FP7 is not a simplification but rather a clear step backwards,” he said.

Smith believes the proposal sends a negative signal to universities and public authorities across Europe “as to the importance of moving towards funding on a full cost basis to support a sustainable research funding base. The FP7 indirect costs flat rate should be maintained and a simplified procedure introduced to recognize universities who have the capacity to identify and calculate all direct and indirect costs of their institution’s project activities.”

Pedrotti of Business Europe warns against non-standard calculation of direct and indirect costs: “For industrial companies, usually maintaining an analytical accounting system, it is very important to be able to charge direct and indirect project costs that are determined according to their usual accounting principles and management practices. If rules require them to do otherwise, they would have to establish and maintain a parallel system to determine their projects costs. Such a situation has to be avoided.”

“Business Europe demands that the participant’s usual accounting principles are widely accepted. Consequently, the application of the flat rate on direct eligible costs to determine indirect eligible costs should not be mandatory,” Pedrotti says.

“The provision for indirect costs is particularly disappointing,” said Boyle, “as it does not adequately cover the level of these costs incurred by institutions, and moves the Commission away from the full costing model which it has been encouraging for several years.”

Boyle points out the importance of possible changes to the regulation that contains detailed rules for the European Union’s budget: “It remains to be seen whether significant progress will be made on the complexities surrounding eligible costs, as these are dependent on forthcoming revisions to the EU’s Financial Regulation.”

With regard to a single reimbursement rate of eligible costs, CESAER, the association of technical universities, is against fixing the maximum rate in the work programme or work plan: “Leaving the final rates to be defined in the Work Programmes would mean a substantial drawback for the intended simplification since different programme lines will define different rates which will present new complications for applicants,” CESAER said in a statement.

CESAER said it “[…] would welcome a clear statement that the Horizon 2020 grant will be 100 per cent of the total eligible costs for R&D and mixed projects.”

“For actions exclusively consisting of activities such as prototyping, testing, demonstration, experimental development, piloting, market replication CESAER proposes that the Horizon 2020 grant shall be seventy per cent of the total eligible costs for the corresponding actions.”

“There is a need to devote further considerations to the level of such a flat rate,” says CESAER, whose members complain that co-financing of participation in EU projects is becoming more and more a problem for many universities. “For large projects, such as the activities under the Future and Emerging Technologies (FET) scheme, the co-financing problems have reached untenable levels,” warns CESAER.

“For many universities of technology overhead costs - including costs of research infrastructures - are relatively higher than for general universities; therefore many of them charge actual cost already. The funding gap opened by the Horizon 2020 proposal of a twenty per cent flat rate is much larger for universities of technology than for general universities that have less overhead and less costs for research infrastructures.”

“Offering different options for funding might reduce the effects of simplification. Therefore, in order to take into account the problems described above CESAER proposes, as a compromise, to apply a flat rate higher than twenty per cent for indirect eligible costs.”

3.    A shorter ‘Time to Grant’ would be great, but there’s lots more to fix, also

"While the target of reducing time to grant is welcomed, the focus of simplification must be on making processes simpler and more straightforward for participants, not just for the Commission itself,” warns Science Europe’s Boyle.

“Reduction of the average ‘time to contract’ is welcomed,” said Smith of the EUA, “and it is a positive move that full time researchers will not require time sheets. But it needs to go further to accept both the usual accounting practice of the beneficiaries and other time allocation mechanisms which reflect good practice in the university sector.”

Anna Voseckova, head of the Czech Liaison Office for Research and Development (CZELO), is hopeful that the time to grant will decrease: “The reduction or time to grant from approximately a year to 100 days will be especially reached by the introduction of a two-step evaluation procedure. The Commission and the evaluators will then have only the best few proposals in the second round to deal with. There is no doubt that this will accelerate the negotiations and reduce the time to grant.”

But Voseckova calls for more transparency in the selection procedures: “But what we have seen now in the FP7 calls that already use this procedure […], is simply not correct: the proposals that were not selected for the second round, received a very vague evaluation summary report - in fact copy and paste text - from which the consortia had no idea why their proposal was not OK and what they should do better.”

4.    Kill the time sheets

Deketelaere is pleased with the proposed reduction in time recording requirements for those working exclusively on projects funded by the EU, but doesn’t think the proposal goes far enough: “[..] as we have emphasized previously, we believe time recording should be removed for all staff working on an EU project,” he said.

CZELO’s Voseckova disagrees: “The issue of no timesheets will be an advantage for a limited group of participants. But I would not in fact support the removal of this obligation in general, as I do not think it is such a burden for the researchers working on more projects or for more employers to record their work hours, according to my view, it is quite useful.”

5.    Simplify the rulebook, too

Voseckova points to the EU’s Financial Regulation that is currently being revised: “It is necessary to bear in mind that Rules for Participation (RfP) in Horizon 2020 are closely linked to the Financial Regulation that is now being revised. In order to have a common set of rules for all EU funding programmes, the Financial Regulation took over a lot of articles from RfP.”

“This does not make things easier for the users,” warns Voseckova, “as they have to study in fact three documents: the Financial Regulation, the RfP and the future Model Grant Agreement, to have a clear picture of their obligations and rights. This is not a simplification and is quite user-unfriendly.”

“If real simplification is going to be achieved it will much depend also on the design of the subsequent rules and how these rules are implemented and interpreted which remains one of the major problems with FP7,” said Smith of the EUA. “Stakeholders and practitioners need to be included in shaping these more detailed rules.”

Bergström of EFPIA agrees: “The Commission’s proposals are going in the right direction but we know from experience that the best intentions can still lead to an unnecessary and excessive administrative burden for researchers, if they are not implemented in an effective manner, taking into account the particular nature of the project.”

“One size does not necessarily fit all: when keeping the necessary level of control and competition, the processes should be adapted to the type of collaboration and nature of projects,” said Bergström, “What is essential is that those participating in the various collaborative research and training programmes and instruments to be supported by the Commission under Horizon 2020 are made fully aware of the procedures well in advance.”

CESAER also stressed the importance of clear procedures: “[…] we propose more clear formulations in the proposal for the Rules for Participation which is important for ensuring university participation.”

Of course, the ultimate goal is getting more research and innovation accomplished – and Leontios Hadjileontiadis, a professor at Aristotle University of Thessaloniki, is hopeful: “Coming from academia and from a country - Greece - that every day faces the austerity threat, I can assure you that even under such extreme circumstances, there is a strong effort for creative thinking and innovation.”

But for researchers today, he said, the EU programmes are just too complicated. “With the Horizon 2020 initiative, this seems much simpler and gives hope for wider participation,” concludes Hadjileontiadis. It could, he says,  help steer research towards more pragmatic problems and reduce the distance between research and real-life.