A wider roll out of lump sums promises less administration and more flexibility. But research organisations are hesitant about how the change will affect transnational collaborative projects
Horizon Europe is set for “the first significant wave” of lump sum calls in 2023 and 2024, with an estimated 20 to 25% of large scale collaborative research projects set to adopt the approach.
The exact number of lump sums calls is pending the official adoption of Horizon Europe work programmes for the next two years. Most will be in pillar two of the €95.9 billion research programme, which supports transnational research.
As an alternative the real cost reporting, lump sum grants are paid out without the beneficiaries having to file timesheets and report on each item of spending. The Commission has been pushing for their adoption since 2018, with the goal of reducing bureaucratic overheads and cutting high error rates in EU spending on research.
The move is intended to benefit smaller institutions and companies with less experience in EU programmes, in particular. Over 70% of awards go to smaller organisations that hold only one or two grants and do not have the inhouse administration capacity to deal with actual cost reporting.
The Commission piloted lump sum grants in the last few years of the previous Horizon 2020 research programme. Although these were judged to have made the case for wider roll out, the pilot caused controversy in the research community, with many suggesting it was too early to draw conclusions.
Among those critical of the speedy roll out of lump sums is Dorte Dalsgaard, chair of the financial experts working group at the European Association of Research and Technology Organisations (EARTO) and deputy chief financial officer at the Danish Technological Institute, who said, "This is a research programme of significant amounts and this rolling out of lump sum projects without having evaluated a full life cycle is ridiculous problematic."
Others, such as Margit Ilves, senior adviser at the Estonian Research Council, have their reservations but back the objectives. “We believe that finding solutions so that researchers and innovators can focus on their work is a positive step. However, we are somewhat prudent. The details of implementation are important and should be thoroughly analysed before the broader deployment of the lump sum,” she said.
For universities, it is the lack of choice that is concerning. Thomas Estermann, director for governance, funding and public policy development at the European University Association, believes grant winners should be able to choose how they are reimbursed. “The simplification needs to be for the beneficiary and not for the funder. The logic is that you should provide several options for the beneficiary,” he said.
Keeping track of spending
For research institutions that have experience and expertise with EU grants and have actual cost reporting systems in place, the lump sum approach won’t do much to cut out the paperwork. Some lump sum projects are reported to use actual cost reporting internally in order to keep track of spending, despite not having to do so anymore, according to Dalsgaard.
The preferred option often depends on how institutions manage their money and how closely they keep track of costs. “It’s less the size of the institution, but rather the way their financial management is set up, and if they have a cost effective system in place where that’s what they would do anyway,” said Estermann.
The move to lump sum grants also shifts the administrative burden to the front end grant application process, requiring a breakdown of the budget at this stage. The same standard Horizon application form is used, but there is an extra requirement for a budget table, where the spending is justified. With Horizon success rates hovering around 16%, some fear adding further requirements early on could deter researchers from applying, given the low chances of getting a grant.
“It prolongs the application phase significantly,” said Dalsgaard. “It might sometimes be difficult to engage researchers with applying, because it takes more time to apply to EU projects compared with smaller national projects.”
Another key concern is a potentially higher risk that the money would not be paid if a project is unsuccessful. The Commission document describing lump sum grants says, “In all grants, the work described in the grant agreement must be properly implemented before payments can be made.” But it also says, “There is no intention and no basis for judging the performance of lump sum grants more strictly.”
The preliminary numbers do not support concerns about non-payment. Thus far, 99% of lump sums have been paid, and no contentious cases have come up as yet.
These are all preliminary figures. Only around 25 calls in the 2021-2022 work programme were based on lump sum grants and some of these are still open. In addition, the Horizon 2020 pilot has not been fully evaluated. A follow up study is expected in the second half of 2023, once the pilot grants are paid out in full and the numbers are more comprehensive.
The research community awaits an honest and timely evaluation. “We understand that you should take the mid-term review as a starting point for evaluating before upscaling this too quickly,” said Estermann.