Thomas Estermann, Director for Governance, Funding and Public Policy Development at the European University Association presents an overview of its membership consultation on the topic, highlighting the challenges and opportunities for the next Horizon 2020 and Erasmus+ programmes' phase in the wider context of EU budget constraints and pressures.

1. Thomas Estermann
Director Funding, Governance and Public Policy Development
European University Association
Porto
7 October 2016
European Funding
A call for dialogue to increase efficiency

2. Content
I. Key challenges on
• Sustainability of funding
• Sufficiency of funding
• Simplification
ll. How to increase efficiency
in the future

3. EUA member consultation 2016
Erasmus+
• 218 higher education
institutions from 36
countries
• The main contributors come
from Poland, Germany,
Spain, Italy and UK
• Variety of type and size of
institutions
• Most institutions with
experience in the
programme
Horizon 2020
• 153 higher education
institutions from 28
countries
• The main contributors from
Germany, Spain, Italy,
Poland and UK
• Variety of type and size of
institutions
• Majority has more then 10
H2020 projects
3

4. Impact of national public funding
on European funding
• Discrepancies between the systems continue to grow.
• Many national funders that have cut funding expect their universities
to compensate the loss through European funding.

5. European funding under pressure
• Low efficiency of public investment due to
 Low success rate
 Low cost-benefit ratio
 High application and management costs
 Lost opportunity
• Increasing use of loans to the detriment of grants
 EFSI

6. Exceptionally low success rate
• Overall success rate
goes down from 26%
in FP5, down to 19% in
FP7 to 14% or even
lower in Horizon 2020
• More than 1/5 of
respondents to the
member consultation
note lower success rate
in H2020
• Success rates in
Erasmus+ vary greatly
across the actions,
(e.g., 18% in KA2 and
4% in Knowledge
Alliances)
26%
18%
19%
14%
FP5 FP6 FP7 H2020
Evolution of success rate (proposals)

7. Low success rate: what institutions think
Horizon 2020
“The low success rate is problematic. In certain areas of
the program it is only by scoring top level, that there are
sufficient funds available. A project with 14.5 points out
of 15 is often not funded! […]. It creates a negative
impression of the program, along with burdensome large
partnerships. Low success rate = perceived as a lottery.
Adding to this, the long process of setting up a proposal,
makes it less attractive.” (DK)
Erasmus+
“It [Knowledge Alliances] is an interesting opportunity for
university-business cooperation, but a grant approval rate
of 4% (2015) is devastating in comparison to the extensive
application process.” (DE)

8. Low success rate: what does this mean?
• Has an impact on academic behaviour and
motivation.
• Leads to waste of top research ideas and new
scientific discoveries.
• Low success rates = Inefficiency
=> How much does it cost to participate and who
bears these additional costs?

9. Horizon 2020 success rates (Austria):
efficiency of public support
 Some maths:
2682 applications
493 funded = 18,4% sucess rate = 191 Mio. € received
2189 not funded = If minimum cost for application is 10.000 €
2189 x 10.000 € = 21,9 Mio. € costs
If maximum cost for application is 100.000 €
2189 x 100.000 € = 219 Mio. € costs
If average cost for application is 50.000 €
2189 x 50.000 € = 109 Mio. € costs
Data on number of applications and funding received
from FFG March 2015

10. Horizon 2020 success rates (system-wide):
efficiency of public support
 Some maths:
31115 eligible applications
4315 funded = 13,86% sucess rate = 5.5 bn € received
26800 not funded = If minimum cost for application is 10.000 €
26800 x 10.000 € = 268 Mio. € costs
If maximum cost for application is 100.000 €
26800 x 100.000 € = 2.68 bn € costs
If average cost for application is 50.000 €
26800 x 50.000 € = 1.34 bn € costs
Data on number of applications and funding for the
first 100 calls of H2020

11. European vs national RDI funding programmes I
33%
35%
32%
More attractive
Similarly attractive
Less attractive
How attractive is
Horizon 2020
compared to
national funding
programmes?=1
43)
Participants’ interest depends both on national funding and
chances to get funded, i.e., success rates.

12. European vs national RDI funding programmes II
NB: The success rate for applications from countries highlighted in green is higher than the country
average. No data for Norway and Switzerland.
Source: First 100 calls of Horizon 2020 (success rate); EUA Public Funding Observatory (funding
trends), EUA member consultation on Horizon 2020 (attractiveness of H2020)
Institutions from systems with growing public funding to universities
tend to have higher than average success rate in Horizon 2020.

13. EFSI: what’s in it for universities?
Lack of interest in EFSI:
Hardly any university has
engaged with EFSI so far
Universities are active in other
schemes for close-to-market
innovation
(e.g., FTI) based on grants
 EFSI has failed so far to deliver
upon its promise to bring universities
and industry together within joint
RDI.

14. Cost coverage in H2020 and Erasmus+
• Costs are not sufficiently
covered by H2020 and
Erasmus+
• Challenge for organisations
with limited resources to
participate in H2020
• Only institutions, mobile
learners and teachers with
sufficient levels of national,
public funding can afford
participating in E+
• Will increase concentration
and divide
82%
20%
12%
The core budget of
the university/sub-
entity
Specific financial
support from local,
regional or national
funders
Other sources
Funding of remaining costs linked to
participation in Horizon 2020 (N=153)

15. Cost coverage in Erasmus+
▪
• Cost coverage is for
69 % an obstacle to
participation in
mobility
• Cost coverage is for
62 % an obstacle to
participation in
Cooperation

16. Simplification under Erasmus+
A high number of respondents note the increased administrative
burden of Erasmus+, in particular for the Key Action 1 (KA1)
mobility programmes.

17. Simplification under Horizon 2020
• Progress has been
achieved with several
aspects to further
simplify the Framework
Programme
• Yet too much red tape
has still been reported,
(e.g., with regard to
cost accounting)
• Various costing schemes
don’t work (additional
remuneration, large
infrastructures, internal
invoicing, etc.)

18. Efficiency and Effectiveness
Erasmus+ and H2020 are delivering high added value!
• High return on public investment
• New R&D expenditures
• Growth in GDP
• Jobs
• Collaboration
• Student and staff mobility
High effectiveness but low efficiency
Some thoughts on how to increase efficiency

19. How to increase efficiency I
Tackle the low success rates together!
• Institutions:
 Strategy and support to only put forward top proposals
• National funders:
 Calculate real costs of participation
 Fund unsuccessful top proposals (common pots)
 Support institutions in strategic development
 Sufficient Funding at national level
 Simplification at national level
• European funders:
 Increase Funding for grants
 Reduce costs of application:
• 2 – stage calls
• More guidelines and clearer description of calls, esp. with regard to impact
• Support at application stage

20. How to increase efficiency II
Reduce costs of participation through Simplification!
European Funders:
• Accept nationally recognised costing methodologies
and institutional management and accounting
practices
• Calculation of personal costs
• Time recording
Build a trust-based funding system!

21. Together towards sustainability
• Universities
 Strategic approach to funding and awareness of costs
• National Funders
 Don’t expect European funding to replace cuts at national level and invest in
university sector
• European Funders
 Increase grant funding for research and education instead of loan funding

22. THANK YOU!
More information, data and studies:
www.eua.be
Contact:
Thomas.estermann@eua.be
www.eua.be
@ThomasEstermann /
@euatweets