Following a recent meeting with the European Commission, we would like to share with subscribers early information on a new optional way of charging personnel costs to Horizon Europe grants that use the actual cost model (i.e. excluding funding schemes such as the Marie Skłodowska Curie Actions based on unit costs or lump sum projects).
- The new standardised (average) unit cost for personnel working on Horizon Europe actions will take the form of a daily rate approved by the EC ex ante (before the projects commence) for individual beneficiaries.
- The unit cost will be calculated in the following way: Total staff costs of the beneficiary in the last closed full financial year/Annual work units in the last closed full financial year/215
- The unit cost fixed for a beneficiary will apply to all individuals working for the institution on all of its Horizon Europe projects.
- This method will be optional and the beneficiaries can continue to charge actual personnel costs (using the mandatory formula for calculating the daily rate indicated in the Corporate Model Grant Agreement).
- Different beneficiaries participating in the same project would have different unit costs set for their institutions.
- The Legal Entity Appointed Representative (LEAR) of each beneficiary institution will be responsible for encoding the data for the standardised unit cost on the Funding & Tenders Portal and uploading the necessary evidence.
UKRO understands that a Commission Decision authorising the use of the new unit cost on Horizon projects has already been approved and that the new method will be officially presented during the R&I Days in March. However, it is expected to be available only to beneficiaries on new projects (i.e. where the grant agreement is signed after 1 May 2024).
Pros and cons of the new method
The main benefit of using the new method of charging personnel costs is the fact that the beneficiary no longer needs to make detailed calculations for each employee working on a Horizon Europe project (which are traditionally the biggest sources of financial errors on projects). Instead, it will be possible to charge an average unit cost that will be automatically applied to all personnel spending a day on a project (regardless of their actual salary). Because the unit cost is fixed ex ante, there is no danger that the calculations of the beneficiary’s personnel costs will be incorrect thus potentially making the total costs ineligible. However, the downside of this method is that the beneficiary will be unlikely to recover its actual personnel cost, as the standardised unit cost will effectively be an artificial (simplified) way of claiming costs – it will not differentiate between the actual salaries paid to different types of staff (e.g. senior researchers and technicians).
While the new method is unlikely to be universally adopted by the beneficiaries in the UK, coordinators of future Horizon Europe projects should be aware of this possibility which could be used by organisations in other countries.
UKRO will keep subscribers updated on this subject through the UKRO Portal and provide further information on this method once it becomes available.