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Study to develop EU level Simplified Cost Options (SCOs) and other EU level results – based tools in the programming period 2021-2027

The study was launched by the Directorate-General for Regional and Urban Policy (DG REGIO) of the European Commission to respond to a demand for further simplification of the European Regional Development Fund (ERDF) and Cohesion Fund (CF) in the period of 2021-2027. The study also aims to respond to recent recommendations set out by the European Court of Auditors which urged the Commission to increase the usage of other result-based tools for financing under ERDF/CF, such as ‘Financing not linked to costs’ (FNLC). The study, which will be lead by PPMI, will be carried out together with t33 from Italy.

Previous studies on the use of simplified cost options (SCOs) under ERDF/CF shows that SCOs have been used under the large majority of ERDF/CF 2014-2020 programmes. Majority of ERDF/CF authorities have already used such simplified financing tools as flat rates covering part of the cost of the operations (particularly indirect costs). The use of SCOs, either Standard Scale of Unit Costs or Lump Sums, to cover all costs of the operation was reported only in a limited number of cases. Encouraging authorities to widen the scope of application of SCOs, introducing off-the-shelf options covering all or most costs of the operations, would be essential to increase the share of ERDF/CF budget covered by SCOs and to fully enhance the advantages of the simplification measure. EU Level SCOs would also represent an important tool and a reference for ERDF/CF authorities for the transition from input-based to results-based approaches.

To that end, the study team will undertake the following key tasks under this study:

  • Development of EU level SCOs for each Member State in three policy areas, namely:
    • Energy efficiency & renewable energy;
    • Research & Innovation activities;
    • SME Growth & Competitiveness.
    • Assessment of feasibility of developing EU level result-based tools such as FNLC in up to three policy areas to be identified by DG REGIO during the term of the contract.

The work carried out under this contract is accordingly expected to support the adoption of EU-level SCOs (under art. 88(4) CPR) and the development of EU-level financing not linked to costs (art. 89 CPR) under the ERDF/CF during the programming period 2021-2027. In turn, this will allow to achieve the benefits of simplification while avoiding possible risks and encourage ERDF/CF authorities to make a wider use of those simplification measures.

The study will cover all EU Member States as well as some third countries whose experience could be suitable for the use of EU level SCOs or financing not linked to costs under the ERDF/CF.