Plenary Session 3: FP7 Implementation Issues
Cornelius Schmaltz,
Policy Officer, Co-ordination of Fp7 Operations, DG Research, European Commission

Rudy Hautman,
External Auditor, Financial on-spot auditor, DG Research, European Commission

The session on FP7 Implementation Issues was delivered by two speakers, Cornelius Schmaltz, the Policy Officer responsible for the coordination of FP7 operations within the DG Research at the EC, and Rudy Hartmann, an external auditor and financial on-spot auditor, again based at the DG Research. Here is a brief summary of what they had to say:

FP7 Implementation and Simplification
Cornelius Schmaltz

Cornelius split his presentation into two parts, the first of which dealt with the Commission’s Communication on simplification, looking at the political message of the Communication, its purpose, the timing of the proposed changes, measures that would be possible under the existing legal framework and options for changing the rules and funding mechanisms. The second part of the presentation dealt with IT tolls, in particular the Participant’s Portal.

In April 2009 the Commission adopted a Communication entitled ‘Simplifying the Implementation of the Research Framework Programmes.’ It presents options for simplification at three different levels: (i) measures that can be implemented under the current legal framework, such as improved user support or the use of prizes in selected areas; (ii) options that remain based on the current cost-based system but require changes of rules, such as the broader acceptance of ‘usual accounting practices’ or the removal of the obligation for interest-bearing accounts, and (iii) simplification measures that would move towards result-based instead of cost based funding, utilising lump sums. Cornelius reported that the Commission is currently receiving feedback on the Communication from the European Council and Parliament, and had already started to implement some elements.

The overall goal of the simplification measures is to make the Framework Programme more attractive to researchers, industry and in particular SMEs. Cornelius went through the measures which have been proposed in the three sections as set out in the Communication itself:

1. measures under the current legal framework;
2. options for changing the rules under the current cost-based system; and
3. options for changing the rules and moving towards result-based instead of cost-based funding.

Measures that can take place under the current legal framework include: improved user support, guidance, transparency and IT tools; uniform application of rules and reinforced coordination; better structure and timing of calls; adapting the size of consortia; adopting the use of prizes in certain areas.

Under the current cost-based system there are a few options for changing the rules to simplify the processes. These include a broader acceptance of usual accounting practices; extended eligibility of average personnel costs; restricting the variety of reimbursement rates and indirect cost methods; removal of the obligation for interest-bearing accounts which is currently a problem for many organisations; the inclusion of more lump-sum elements in the existing cost-based approach; and a streamlining of the selection process. It is more likely that the changes to the existing cost-based funding will be the preferred option rather than moving to a result-based funding model which would see lump sum funding against outputs and results.

Currently the interpretation of eligibility of cost elements is often difficult, in particular for cost elements in personnel and overheads. The Commission propose to accept usual accounting and management practice of the beneficiaries and compliance with national accounting and auditing standards as a sufficient basis for considering the eligible costs. The existing methods that are in place at the moment exclude 90% of existing methods for average personnel costs. They also propose to reduce the number of possible combinations of reimbursement rates and methods for indirect costs so that there will be one unique reimbursement rate and one flat rate for indirect costs.

The debate on the proposed changes will influence the legal framework of the next Framework Programme. However, if the debate was to establish a broad consensus on some measures there is the possibility that legislative proposals for changes to FP7 rules could be prepared more quickly.

The second part of the presentation was focussed on the changes being made to the IT tools used by the Commission, including changes to simplify the Participant Portal (PP) and Identity and Access Management (IAM.) The Participant Portal represents a new single entry point for all external stakeholders. It will handle all grant-related actions and it provides personalised services through role-based authorisation. In addition, some new and future IT developments in the negotiation and reporting processes were discussed, such as the online mechanism available for preparing the Description of Work (DoW) during negotiations which is currently recommended but not yet mandatory, and the FP7 reporting tools which are compulsory. Cornelius acknowledged that it was difficult to simplify the IT tools as a whole as the DG INFSO (Information Society and Media) currently uses different tools, however he did say that the Commission is currently trying to keep an overview of systems and to simplify wherever possible. Cornelius brought his presentation to an end with a brief outline of some possible future developments in this area which include the integration of the explanation of the use of resources into Form C, which according to plans will be only submitted electronically.

The FP7 Audits: Strategy and Recent Events
Rudy Hautmann

The presentation on the FP7 Audit Strategy was delivered by Rudy Hautmann from the DG Research and was divided into three parts. In the first part Rudy explained the context in which the Audit Strategy is carried out before moving on to discuss the Strategy’s objectives and tools, as well as its main concepts, such as error rates and extrapolation. Areas particular to research were also discussed, such as indirect expenditure which is currently reimbursed using a cost-based system where there is a high risk of mistakes making controls a necessity.

In the second part Rudy explained some of the new developments which have had a considerable impact on the Audit Strategy whilst clarifying the key areas behind three recent Commission Communications on (i) simplification of recoveries; (ii) simplified implementation of FP7; and (iii) cost control and risk of error. The first of these was concerned with making the recovery process a lot simpler due to the discovery of systematic errors in audits. Plans to make the system simpler include a move towards the broader acceptance of usual accounting principles; the possible use of average personnel costs; a limit to the variety of rules regarding funding rates, organisation types and activity types; clearer methods for determining indirect costs; and more lump sum arrangements.

The second Commission Communication discussed during the presentation was on the simplification of FP7 where Rudy highlighted the current contradictions between the rules on the use of accounting principles and the way in which they are implemented. The idea of result-based funding as an alternative to cost-based was also discussed where a lump sum would be paid against agreed outputs or results. However this is not likely due to the same reasons discussed previously with concerns that this will limit the amount of high-risk frontier research.

The final Communication discussed by Rudy was the recent communication on controls and the importance of striking a balance between costs of control and the risk of error. The Communication proposed a new TRE (Tolerable Risk of Error) to be between 2 and 5%. This would allow them to focus less on coverage, decreasing the number of controls needed, and more on risk based and fraud controls.

Finally Rudy explained some of the terminology, or buzz words such as time recording, productive hours, and overheads which are commonly used but not commonly understood. On time recording and the use of productive hours Rudy emphasised that all time should be recorded as this gives the most accurate account on timesheets – quite often it is obvious that timesheets are completed at the same time before the audit. Rudy reiterated that timesheets should be updated over the duration of the project, indicate the project number and should be signed and counter-signed. The use of flat rates for subsistence and accommodation is another possibility to simplify auditing – in this case the auditor will check the reality and duration of travel rather than bills, receipts or invoices. The issue of subcontracting on research grants is an area which the auditors give particular attention due to the high risk of error. Rudy reiterated that subcontracting within the consortium was not permissible. The final point for discussion was with regards to the myriad of problems caused by the requirement to declare interest yielded by the pre-financing – Rudy explained that he hopes this is one area in which the simplification agenda for FP7 would bring a change of rules.

Plenary Session 4: UKRO Achievements 2009-10 and Priorities 2010-11
Amanda Crowfoot,
Director, UK Research Office

Amanda Crowfoot, the Director of UKRO took the opportunity at the 2010 UKRO Annual Conference to give a brief overview of their developments over the past year, in particular in the context of the changing research landscape. Amanda also provided some insight on future developments at UKRO planned for the current year (2010-2011), inviting subscribers to provide their own input to UKRO on a number of issues.

The UKRO mission, revised in April 2010, is to promote effective UK engagement in EU research, innovation and higher education activities by:
• Enabling sponsors and subscribers to make informed decisions about participation in EU programmes and to realise the opportunities available to them;
• Supporting UK input in European research policy development and implementation through informing and interfacing with the appropriate bodies; and
• Developing and maintaining a suite of quality services that meet the evolving needs of sponsors and subscribers.

The past year (2009-2010) has seen many developments at an EU level, most notably with a new European Commission and European Parliament. Policy wise we have seen the launch of the EU 2020 Strategy and the ongoing development of the Research and Innovation Strategy. Other developments include amongst others the FP Simplification Communication, the review of EU Financial Regulation and its Implementing Rules, the publication of the interim review of ERC and the start of discussions on the next Framework Programme.

One of the major developments to have taken place over the past year at UKRO is the development of the new five year Strategic Plan designed to better reflect the recent changes in the research landscape. In accordance with the EU knowledge triangle (research, education and innovation) UKRO’s mission now includes innovation. The development of the new UKRO portal which will merge the current website with UKRO’s information services into one system has also been a major part of the developments over the past year, and is due to be launched in the next few months. A number of staff changes have also been made over the past year, in which UKRO celebrated its 25th anniversary, including the appointment of our own European Advisor, Amy Williams, who will be visiting the university on the 7th September for the Annual UKRO visit.

Parallel Session C1: Digital Agenda for Europe
Detlef Eckert
Director, Lisbon Strategy and Policies for the Information Society, DG Information Society and Media, European Commission

In his presentation Detlef Eckert explained the background of the main aims of the European Digital Agenda and how the Commission sees the development of a Digital Single Market by 2015. The ‘Digital Agenda for Europe,’ which is one of the seven flagship initiatives of the Europe 2020 strategy – the Commission’s new ten year Strategy aimed at making the EU more dynamic and competitive – has been devised to focus on customers, services and the EU added value which the strategy could bring. The Digital Agenda is centred on seven problem areas: a single digital market; openness and interoperability; online trust and security; internet for all; research and innovation; digital inclusion; and digital public services. The agenda, which is the successor of the European Information and Communication Technologies (ICT) framework ‘i2020,’ includes a number of activities to be implemented through new legislation and policy, along with amendments to EU funding schemes supporting ICT.

Detlef also discussed the role of research and innovation and how this should be co-ordinated on a European level. This will be done through the Work Programme for 2011-2012, which has a budget of €2.5 billion, and the subsequent one year Work Programme for 2013. The Future Internet Public Private Partnership (PPP) has also been allocated €300 million for the remainder of FP7. The first calls for this were launched on the 20th July 2010. The theme will also be extended into the next Framework Programme. Plans are for investment in ICT R&D to be doubled to €11 billion, which would come from the EU and Member States. Detlef was confident that Member States will commit to double annual public spending on ICT R&D by 2020, which was a concern for many of the delegates. He reminded delegates that the US currently spend a lot more on ICT R&D, and the target for EU investment is linked to the EU2020 Strategy target that 3% of EU GDP should be invested in R&D.

Currently a number of working groups have been established to take forward the strategy which include representatives from Member States. The implementation of the Digital Agenda will be monitored largely through an annual ‘scoreboard’ which will feed into a Communication to the European Council. Action teams have also been established for each of the activities in the Digital Agenda.

Plenary Session 5: Europe 2020 Strategy: Tackling the Crisis and Restoring Growth in Europe
Tonnie de Koster,
Team Leader of the Europe 2020 Strategy, Secretariat General, European Commission

In his presentation Tonnie de Koster, the Team Leader of the Europe 2020 Strategy, gave delegates an overview of the aims of the EU2020 Strategy which is the Commission’s new ten year Strategy to promote sustainable growth to the EU economy. Tonnie explained that the Europe 2020 Strategy was about creating the structural reform necessary for a strong and sustainable recovery. The new strategy has been designed in response to the economic situation which exposed the weaknesses in Europe’s including sluggish structural growth, high unemployment, the productivity gap and levels of debt and limited fiscal room. The crisis showed that our economies are closely inter-linked so we must act in a more coordinated way to counter the crisis.

The Lisbon Strategy (2000-2010) provides the starting point for Europe 2020. Whilst the Lisbon Strategy was no great success, it was by no means a failure. It demonstrated that there was strong convergence on the direction of reform and whilst the target of 3% GPD for R&D had not been met it provides an impetus and basis for reform. The problems with Lisbon such as the lack of ownership and weak communication with regions not sufficiently involved have been taken into account with the design of Europe 2020. Delivery mechanisms have now moved to national level with education and research at the heart of the strategy. One of the criticisms of the Lisbon Strategy was that it was too EU-inward looking, however Europe 2020 recognises the need to have a global outlook as well as more local to create sustainable growth. The Commission has also realised the need to ensure growth is sustainable and more even after the delivery gap built up between Member States under Lisbon.

So, Europe 2020 is about delivering reforms and building on the foundations of Lisbon. This will be achieved through a focus on three interlinked priority areas:

1) Smart growth: developing an economy based on knowledge and innovation
2) Sustainable growth: promoting a more efficient, greener and more competitive economy
3) Inclusive growth: fostering a high employment economy delivering social and territorial cohesion

Supporting these three areas are five headline targets which shall be translated into national targets and national reform programmes to be implemented by Member States. By 2020:

• there will be a 75% employment rate for those aged 20-60);
• 3% of the EU’s GDP will be invested in R&D;
• the ‘20/20/20’ energy targets will be met, including a 30% reduction in emissions;
• education levels shall be improved, reducing school drop out rates and increasing the share of the population having completed tertiary or equivalent education; and
• social inclusion, in particular through the reduction of poverty, will be promoted.

There will be seven flagship initiatives comprising of a mix of legislative and non-legislative measures to underpin the targets. These are:

• Innovation – ‘Innovation Union’;
• Education – ‘Youth on the move’;
• Digital society – ‘A digital agenda for Europe’;
• Climate, energy and mobility – ‘Resource efficient Europe’;
• Employment and skills – ‘An agenda for new skills and jobs’;
• Competitiveness – ‘An industrial policy for the globalisation era’; and
• Fighting poverty – ‘European platform against poverty.

The monitoring mechanisms put in place will ensure a close dialogue between Member States and the Commission and close cooperation with the European Parliament and other EU institutions in addition to National parliaments, social partners, regions and other stakeholders leading to an enhanced coordination of economic policies.

The European Agenda was adopted by the Council in the Spring, and the June European Council set the numerical rates for education targets, approved indicators for social inclusion, and endorsed Member States’ national targets and integrated guidelines. The next steps will be for Member States to make the first presentations of their national reform programme before the launch of the flagship initiatives and implementation. The first activities within these programmes is expected to start in Spring next year. For more information on Europe 2020 visit the EUROPA website.

Plenary Session 6: Belgian Presidency Research Priorities
Caroline Mancel,
Attaché, Belgium Permanent Representation to the EU

The Belgian Presidency took over the rotating presidency of the European Council from Spain on 1st July 2010 and will run until 31st December 2010. Speaking on the second day of the presidency Caroline Mancel from the Belgian Permanent Representation to the European Union attended the UKRO 2010 conference to give a short presentation on their research priorities.

The Brussels-Capital Region and Research
Caroline explained that some legislative powers are devolved to a regional level in Belgium: ‘Belgium is a Federal State composed by Communities and Regions’ (Article 1 of the Belgian Constitution.) Belgium has 3 regions and 3 communities, as can be seen in the diagram to the left.

As a result of this composition decision making on research policy takes place between representatives of Flanders, Wallonia and the Brussels Capital Region. However, the seat in the European Council is currently held by the Brussels region with Minister B. Cerexhe. Caroline expressed her belief that the Belgian regions are competent in a lot of policy areas such as the environment, research, industry, regional policies, and the Brussels Capital Region is situated in the top 10 of the European Regions for its potential of scientific research and innovation.

Looking at the wider European environment Caroline moved on to discuss the recent policy updates at the EU level, including the Lisbon Strategy and Europe 2020 Strategy which were discussed in more detail in previous sessions. Caroline also discussed the current European economic climate with its budgetary constraints, and situated the Belgian Presidency in the context of the institutional changes taking place with the new European Parliament and Commission which will be in place for a five-year term and the focus on research and innovation.

The Belgian Presidency and Research

The majority of Caroline’s presentation was focused on the Belgian Presidency’s major priorities in the area of research priorities, of which there are six:

1) Enhancement of R&D&I within new EU strategy 2020: Innovation flagship

The enhancement of research and innovation revolves around a number of high-level meetings including an informal meeting of the Competitiveness Council in July 2010 which will inform the R&I plan which is expected to be published in September. This document will detail how the Innovation Union Flagship Initiative, which is part of the Europe 2020 Strategy will be implemented. The document will emphasise the importance of a properly integrating research and innovation into the Strategy. Further meetings of the Competitiveness Council and a special Innovation seminar in October will follow this in the run up to the meeting of the European Council in December.

2) Simplification

This will build on the Commission’s proposal for a simplification of FP7, as discussed in an earlier session at the UKRO 2010 Conference and the work of the Spanish Presidency. Caroline identified several key meetings for this priority, including the Simplification Seminar and a discussion of the problems in an Informal Council meeting which took place last month.

3) ERA implementation

This involves the implementation of ERA with a follow up of ERA initiatives. Part of this will be the launch of three Joint Programming Initiatives (JPIs.) So far Draft Council conclusions on the three proposed new Joint Programming Initiatives have been sent to EU Member States, and the next step will be to reach an agreement on the framework conditions for their operation. A major conference on joint programming will also take place in October to enable progress on the issue to be made.

Improving standards to achieve excellence in universities also falls under this priority. Improving mobility and career prospects for researchers and a focus on international cooperation activities such as the launch of the India-EU Pilot Initiative on water in November will also be looked at. A conference on governance, funding and innovative research training is due to take place in October and we should expect a new ERA action plan/strategy later this year.

4) Research and Sustainable development

The Belgian presidency intends to make a strong effort to be a sustainable presidency and will therefore focus on European research initiatives which will contribute to sustainable development. Key events for this priority include the European Energy Technology Summit (on the SET Plan) in November this year.

5) Atomic questions/Extending the scope of the Euratom FP

This will involve an extension of the 7th Euratom Framework Programme. Plans for a timetable of legislative proposal are expected to be announced by the end of the year.

6) Space Policy

Progress will hopefully be made towards the development of an EU space policy which will take into account cooperation, space exploration and security. EU-USA cooperation is important for developing a common vision of space exploration.

Finally Caroline told delegates that although a first report on the next Framework programme will be published during the Belgian Presidency, this will not be discussed at a ministerial level. FP8will not form a significant part of the Belgian Presidency’s research priorities, which will be more the concern of the Hungarian Presidency in early 2011.