Deadlock over funding model could delay programme’s start
Horizon 2020 seems unlikely to include an option for participants to be reimbursed on the basis of full costs, as the Council of Ministers and European Commission stand firm on their plans for flat-rate payments.
But a lead negotiator for the European Parliament has said he will not agree to the proposal, threatening to prevent a final decision on the programme this month and delay its start next year.
Research organisations are divided on the issue. Representatives of the European University Association and the European Association of Research and Technology Organisations, Earto, continue to fight for reimbursement based on full costs, whereas the League of European Research Universities, Leru, has called on leaders to accept the flat-rate model, saying a delayed agreement would lead to EU research being “irreparably compromised”.
Representatives of the Council, the Parliament and the Commission are approaching the end of informal trilogue discussions to determine the details of Horizon 2020. Negotiators are aiming for an agreement before 1 July, when the Irish presidency of the Council ends. But disagreement over the funding model to be used, which will determine how much participants are reimbursed for their research expenses, has caused deadlock.
The Council says reimbursement must be made on a flat-rate basis—100 per cent of direct research costs plus an additional 25 per cent of this amount to cover indirect expenses—because this would be a major simplification. But the Parliament wants an option to be included for organisations with high overhead costs, such as universities and research organisations, to be paid on the basis of their full costs.
At a press conference on 28 May, German MEP Christian Ehler said the Parliament “cannot give up defending the interests of stakeholders”.
“We need a move from the Council…otherwise we will need to start all over again under the Lithuanian presidency,” said Ehler, one of the Parliament’s rapporteurs. Supported by representatives of Earto and the European University Association, Ehler urged the Council to consider a compromise under which not-for-profit organisations would be offered a full-cost option, to be paid at 70 per cent of the total amount spent.
The secretary-general of Earto, Chris Hull, said this option is essential because “the average research and technology organisation has indirect costs equivalent to about 100 per cent of direct costs”. The solution must be “flat rate for the many who want it, full cost for the few who need it”, he said.
But the press conference had little effect on national research ministers, meeting as the Competitiveness Council on 30 May. Seán Sherlock, Ireland’s research minister, said “a very strong majority” of countries backed the flat-rate model. Brussels sources said that only the UK and Germany remained undecided.
The Council’s stance was welcomed by the elite university group Leru, as well as by the UK Higher Education International Unit. Leru said plans for simplification were “an absolute priority” that “should not be endangered by unrealistic desires”.
Before the meeting, the Commission released a document on how it intends to differentiate between direct and indirect costs for large infrastructures under Horizon 2020. Under a flat-rate model, this “will become a key question for the beneficiaries—and in some cases even decisive for being able to keep similar funding intensities as in FP7,” said the Commission.
However, Hull said this statement was “irrelevant” because the document describes the system already in use under Framework 7, meaning the Commission is proposing “a false solution to a real problem”. In fact, the plans could increase complexity by requiring participants to deviate from usual accounting practices, said Hull.
Brussels sources say the Parliament is awaiting the Council’s official position before planning for the final trilogue on 17 June. Failure to reach a compromise then is likely to defer an agreement until the autumn.