Explained: the perpetual fight over unspent Horizon Europe money

08 Dec 2022 | News

The annual EU budget negotiations are done, but the Brussels research circles are ‘fatigued’ with the fight over whether to return unspent money into the €95.5 billion funding pot

Next year’s budget for Horizon Europe has been agreed, but the deliberations around unspent money from previous years continue, giving Brussels’ research proponents a headache.

Every year, around 5% of the money committed to research in framework programmes does not make it to scientists. These are so-called decommitments. Some of it is then returned back to the EU’s (on paper) €95.5 billion research budget and since 2021, this ‘reconstituted’ money has amounted to €286 million.

Stakeholders are not happy seeing the money leave the EU’s overstretched research programme. Horizon Europe’s success rates hover around 16%, and many excellent proposals get turned down.  “You have an underfunded programme, but you have money left at the end. That should not justify not returning these decommitments. We fully agree with [MEP] Christian Ehler when he says that it’s equivalent to greenlighting cuts to Horizon,” says Enora Bennetot Pruvot, deputy director for governance, funding and public policy development at the European University Association (EUA).

The issue is not the absorption of the money but how the grants are paid out. At the beginning of a project, the Commission commits to giving it the full amount of money promised. But it’s difficult to calculate how money will be needed for each project. During the lifetime of a research project, goals and expenditure change, and often less money ends up being paid out at the end than was committed to at the start.

Money that is not paid out simply gets cancelled in the European Commission’s accounts. “We always have to hammer that the money left in the end doesn’t mean a lack of interest and good ideas. It’s not an absorption rate issue,” notes Bennetot Pruvot.

Since 2018, decommitments have become a sticking point in the EU budget negotiations following the introduction of a new rule that allows the money to go back into the research pot, if the European Parliament and member states agree to it.

Under Horizon Europe it was agreed that €500 million of unspent money will go back to the budget, but how much of it should be sent back each year has become a contentious issue. The Parliament sees the €500 million figure as a minimum. The member states, for whom decommitments mean re-committing the money from their own state budgets, see it as a maximum. The years-long running time of Horizon projects add extra difficulty to the equation: the unspent money is counted after a project ends, which means the current unspent money up for deliberations comes from the previous seven-year EU budget, making it all the more difficult administratively.

Rethinking the rules

The Commission is gearing for a big EU budget review next year, looking to introduce more flexibility and stability, as the bloc deals with consecutive crises while bidding on an expensive transition to a green and digital future. Some argue this could be a chance to address the decommitment issue.

“The reality right now is that we have decommitments and that the member states refuse to re-use them,” says Christian Ehler, the European Parliament industry, research and energy committee, ITRE, rapporteur for Horizon Europe budget negotiations. “Therefore, we need to use the recast of the Financial Regulation to make the re-use of decommitments automatic rather than dependent on the annual budgetary procedure.”

Universities are on the same page. Bennetot Pruvot says the hope is to the budget review will make the EU budget more flexible. This way, she hopes, the member states will be less reluctant to allow the money back into the research pot, instead of putting it aside for emergencies.

“We face crisis after crises after crisis, so we see a need for more creative thinking around the EU budget,” says Bennetot Pruvot. “If you combine this with the general sense of fatigue that we have as stakeholders around the annual fight, I do think there is a need for a more structural rethinking of the budget with a priority given to future oriented policies and mechanisms that allow for smart flexibility.”

Ehler also wants to see if decommitments can be reduced. “As I see it now, decommitments as such are not a problem. However, it has been an issue only in recent years so we would welcome it very much if the European Court of Auditors, for example, would draw up a special report on research decommitments so that we understand better where they come from,” he says.

It’s also unclear how the status quo will shift following the wider introduction of lump sum funding to Horizon Europe, reducing the bureaucracy that comes with reporting project costs. The Commission is yet to weigh the impact. “This will only have an impact in the long run,” an insider tells Science|Business. “We don’t have any exact figures for the moment, so it’s difficult to know which kind of projects it will impact, but of course we expect to have less decommitments.”

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