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Horizon 2020 full-costing debate heats up

Lobby groups have reiterated calls for overhead expenses to be met on a full costs basis under the next EU research programme, ahead of an upcoming meeting of policymakers.

Both business and academia representatives have said that indirect expenses, such as travel and equipment, need to be reimbursed well to encourage researchers to participate in Horizon 2020. 

For Horizon 2020, the European Parliament has proposed a funding model under which participants would be allowed to account for the full direct and indirect costs of a project, but only be refunded 70 per cent of this amount to keep costs down.

Business Europe, which represents 41 business federations across 35 countries, says the Parliament’s suggestion would be inadequate, and discourage business participation in the programme. In the letter, dated 5 April, Business Europe says Horizon 2020 participants should be offered two options for funding reimbursement. This should either be 100 per cent for direct research costs and an extra 30 per cent of this amount to cover indirect costs, or participants should be able to claim indirect costs on the basis of the actual amount spent.

In contrast, the European University Association has welcomed the Parliament’s suggestion, because it maintains an option for institutions to use full cost accounting. However, the EUA said the level of reimbursement should be increased from 70 to 75 per cent. The flat rate for institutions unable to account for full costs should also be increased, to 40 per cent, an EUA statement says.

The debate is further complicated by a suggestion, made by the Commission in October 2012, that organisations with high indirect costs could declare some of these expenses as direct costs. The Commission told lobby groups it would prepare guidelines on this, but no details have yet emerged.

“We have asked the Council and Parliament to demand that the Commission produces written guidance, with legal certainty, before taking any final decision on cost reimbursement,” said one Brussels source. “This has not happened yet.”

Representatives from the Council of Ministers, the European Parliament and the European Commission will meet on 16 April for a trilogue discussion on the details of the Horizon 2020 programme, including the funding model to be used for research projects.

In its Horizon 2020 proposal, the European Commission says it intends to use a simplified funding model. This would pay participants 100 per cent of direct research costs, and an additional 20 per cent of this amount for indirect expenses—with no option to reclaim the value actually spent.

The Council of Ministers, which represents member states, supports this simplified approach, but suggests the flat rate for indirect costs be increased to 25 per cent.