Slovenia wants to rethink indirect costs in Horizon Europe

The European Commission should rethink how indirect costs for electricity, heating, rent and office supplies are calculated for Horizon Europe participants, according to Slovenia’s minister for higher education, science and innovation

In a letter sent to research commissioner Ekaterina Zaharieva, and seen by Science|Business, Igor Papič is calling for a “careful reassessment” of how this calculation is carried out. 

Researchers funded through Horizon Europe projects can have some of their indirect costs covered by the EU. These costs are reimbursed at a flat rate of 25% of the direct costs of the project, representing mostly salaries. 

Papič says the current calculation method makes indirect costs “highly contingent” on salary levels in member states. In a country like Slovenia, or other countries that joined the EU after 2004, researchers’ salaries are typically lower than in Sweden, for example, which means the 25% flat rate for indirect costs would translate to lower reimbursements.

According to his letter, indirect costs are subject to market prices that are relatively uniform across the EU, but personnel costs vary a lot between member states. “Institutions with higher personnel costs receive higher indirect cost reimbursements,” said Papič. “This approach creates unfounded imbalances.” 

The letter says this concern is shared by “fellow ministers” who are keen to address the imbalance while keeping the accounting system as simple as possible. 

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Papič has presented an alternative approach and asked the Commission to supply data on average personnel costs across Horizon Europe broken down by country. The alternative approach would allow participants to opt for a calculation of personnel costs based on an average calculated for the entire EU, rather than actual personnel costs. At least in theory, this strategy would decouple indirect costs from national salary differences. 

Not broken

Papič does not list the “fellow ministers” who agree with him, but not all countries in central and eastern Europe are sold on the idea that the system for calculating indirect costs needs fixing. 

According to a paper by the Czech National Contact Points (NCPs)for the Framework Programme, using a flat rate for indirect costs has proved effective so far under Horizon Europe, and should be continued in FP10 under the same conditions, with the possibility of increasing the percentage rate.

However, the Czech NCPs recommend a new system for calculating eligible personnel costs. This new equation should still be simple to implement, but it needs to take into account “national and institutional specifics” and ensures “fair and motivating” salaries for researchers.

“The current system is too complex, unclear, administratively burdensome, and does not consider national and institutional specifics,” the Czech position paper says.

Over the years, the issue of salaries for researchers in the Framework Programme has been a political hot potato. The question of unequal pay in EU-funded research projects generated heated debates during the negotiations for Horizon Europe. At the time, academies of sciences in Poland, Hungary, Slovakia and the Czech Republic urged a new regulation “that guarantees a minimum salary for researchers participating in EU projects.” 

More recently, Zaharieva said the issue of salaries for researchers in the Widening countries could be partially fixed through a European Research Area Act, which the Commission is planning to put forward in 2026. While she thinks it’s “naïve” to believe researchers’ salaries can be equal across the 27 EU member states due to significant differences in GDP, Zaharieva said “minimum standards” should be implemented.

But this issue goes beyond researchers’ pay and indirect costs in the Framework Programme. EU funding programmes in general have different funding rates, different indirect cost provisions and different eligibility requirements. The rules that apply to Horizon Europe are not the same in the Digital Europe programme, for example. These overlapping rules increase the bureaucratic burden for organisation wanting to tap into multiple funding streams.