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Traditionally, Horizon 2020 funding is based on the reimbursement of incurred costs that are aligned with the budgets provided in project proposals. However, this type of reimbursement requires extensive financial reporting and is prone to error.

One of the main elements of simplification in Horizon 2020 (H2020) has been the adoption of lump sum funding in a range of instruments, with the aim of reducing the burden of the financial management of H2020 grants. The adoption of lump sums is indeed meant to shift the focus from administrative matters to scientific and technical achievements. This scheme removes all obligations on cost reporting, as well as the need for timesheets and for financial ex-post audits on costs incurred.

So far, the lump sum scheme has been adopted in a limited number of instruments:

  • For the SME Instrument Phase 1 (low value grant)
  • As a pilot in traditional grants:
    • 2 pilots in 2018 (a Research and Innovation Action in SC1 and an Innovation Action in NMBP)
    • In 2019, it was extended to ERC Proof of Concept and to the Shift2Rail Joint Undertaking
    • In 2020, it is being piloted in almost all themes and instruments, in order to have an adequate sample to build upon for including the scheme in Horizon Europe.

This simplification exercise is based on four main issues:

  • Ex ante cost validation
  • Accomplishment of tasks
  • Activity monitoring and performance
  • Robust consortium management

Considering that the European Commission (EC) intends to continue adopting the lump sum financing in Horizon Europe as well, we hope that this document will provide a useful basis also for applications under the next Framework Programme.

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Luxinnovation is the National Contact Point for Horizon 2020, the European framework programme for research and innovation. Building on our decade-long experience of EU funding programmes, we are able to respond to questions on where to get up-to-date information on programmes and calls for project proposals, what programmes are the most suitable for you or where and how to find European partners.

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