European Scrutiny Committee Contents

4 Horizon 2020 — EU funding for research and innovation




COM(11) 881




COM(11) 822

+ ADDs 1-2

Draft Council Decision establishing the Specific Programme implementing Horizon 2020 - the Framework Programme for Research and Innovation (2014-20)

Draft Decision of the European Parliament and of the Council on the Strategic Innovation Agenda of the European Institute of Innovation and Technology (EIT): the contribution of the EIT to a more innovative Europe

Legal base(a)  Article 182(4) TFEU; consultation; QMV

(b)  Article 173(3) TFEU; co-decision; QMV

DepartmentBusiness, Innovation and Skills
Basis of considerationMinister's letter of 27 November 2012
Previous Committee ReportsHC 428-xlvii (2010-12), chapters 5 and 7 (18 January 2012); HC 428-li (2010-12), chapter 3 (22 February 2012); HC 86-iii (2012-13), chapter 5 (23 May 2012)
Discussion in Council11 December 2012
Committee's assessmentPolitically important
Committee's decision(a)  and (b) Not cleared; further information requested, but waiver granted under paragraph (3)(b) of the Scrutiny Reserve Resolution

Background and previous scrutiny

4.1 The draft Decisions form part of a package of measures, referred to collectively as Horizon 2020, which establish the legal base, objectives and budget for EU expenditure on research and innovation for the period 2014-20. The centrepiece of the package is a draft Regulation proposing an overarching framework for the Horizon 2020 programme and a budget of €87.7 billion to be distributed between three priority areas: excellence in science; industrial leadership; and societal challenges.

4.2 Document (a) would establish a Specific Programme to implement the Horizon 2020 framework programme. It sets out the specific objectives to be pursued in the three priority areas for EU funding and the type of activities envisaged to achieve them. Document (b) proposes a new Strategic Innovation Agenda for the European Institute of Innovation and Technology ("the EIT"). The EIT was established in 2008 and promotes the development of "Knowledge and Innovation Communities" ("KICs") which bring together higher education institutions, research organisations and industry to stimulate innovative research and create the critical mass needed to disseminate and exploit the fruits of research. The EIT is seen as an important tool in helping to deliver the objectives of the Horizon 2020 programme. So far, the EIT has established three KICs (on sustainable energy, climate change adaptation, and the future information and communication society) and the Horizon 2020 Framework Programme makes provision for a substantial increase in EU funding for the EIT to enable it to provide seed money for a further six KICs.

4.3 The Strategic Innovation Agenda outlines the priority areas for EIT activity for the period 2014-20 and recommends launching three new KICs in 2014 covering healthy living and active ageing, raw materials, and food4future, followed by three more KICs in 2018 on urban mobility, added-value manufacturing, and smart, secure societies. It suggests that membership of the EIT's Governing Body should be reduced to cut administrative overheads and that there should be a new Stakeholder Forum to promote dialogue and the exchange of information across the innovation chain. Our earlier Reports provide more detailed background on the Horizon 2020 package.[35]

4.4 The Competitiveness Council in May agreed a partial general approach on the Horizon 2020 Framework Programme, excluding the budgetary elements. The Government supported the partial general approach, but added:

"[T]he Government will only agree to partial general approaches for those programmes which have not been significantly increased in scope and which have no definite fixed spend (i.e. the programme is not scalable to different levels of spend). When agreeing to partial general approaches we have consistently stated that doing so does not prejudice the UK's negotiating position on the Multiannual Financial Framework."[36]

4.5 The Government anticipates that the Presidency will seek a partial general approach on the draft Decision establishing the Specific Programme for Horizon 2020 and on the draft Decision on the Strategic Innovation Agenda for the EIT at the Competitiveness Council on 11 December.

The Minister's letter of 27 November 2012

4.6 The Minister for Universities and Science (Mr David Willetts) invites us to consider granting a scrutiny waiver to enable the Government to support partial general approaches on both draft Decisions. He adds:

"Any partial general approach, that is to say a freeze to negotiations where the Presidency considers textual changes to the regulations are mature enough to warrant this, would be explicitly on the basis that 'nothing is agreed until everything is agreed', including cross-cutting issues with other regulations (such as the overarching Multiannual Financial Framework). This means we have the opportunity to reopen discussion should the need arise."

4.7 The Minister continues:

"The Cypriot Presidency regard obtaining agreement for a partial general approach on these items, as a key priority and technical discussions on the content of the proposals (excluding budgetary issues) have been ongoing since October in the Council Research Working Group. These are progressing in a satisfactory manner with active UK participation and the likelihood is that agreement on the text of both instruments will be reached at COREPER before the Competitiveness Council."

4.8 Turning first to the Horizon 2020 Specific Programme, the Minister says:

"Our major objective has been to ensure that the text is properly aligned with the amended text of the "core" Horizon 2020 Regulation which was agreed at the May Competitiveness Council and which represented a satisfactory outcome from a UK perspective. In particular we have ensured that the Programme remains focussed on excellence. We have continued to work closely with UK stakeholders to identify the areas within Horizon 2020 which represent most potential benefit and ensure that the Specific Programme takes full account of them; for instance we have sought to ensure that Social Sciences, Arts and Humanities research are embedded across the Programme and that the wording of the "Smart, green and integrated transport" societal challenge will enable the UK aeronautics sector to participate fully.

"The one significant area which remains subject to negotiation concerns the way in which the Member State Committees which oversee the implementation of the Programme are structured. The Commission have proposed a substantial reduction in the number of committees which would assist it in the execution of Horizon 2020 than pertains in the current FP7 programme. In common with the overwhelming majority of Member States, we are pressing for a structure which will allow adequate Member State scrutiny of actions undertaken to implement the Programme, both in terms of establishing annual Work Programmes and approving major funding decisions. I hope that it will be possible to reach agreement on a satisfactory structure before the Competitiveness Council."

4.9 The Minister explains that discussions on the Strategic Innovation Agenda for the EIT have mainly focussed on the number of proposed new KICs, the thematic areas they should cover, and whether or not the Agenda should include "open or closed lists" of thematic areas. He continues:

"However, as the Council will not agree any position on these issues until the budget is known, references to the themes and funding therefore remain in square brackets (i.e not decided). A subsequent Commission proposal and co-decision approach to agreeing the themes for the second 'wave' of KICs will be required in 2017 (subject to available budget and a positive evaluation). It appears a broad consensus is emerging among Member States on the current text and the Presidency has indicated they aim to achieve a PGA [partial general approach] at the 11 December Competitiveness Council.

"In view of the importance of EU level research and innovation programmes to the UK (both to academia and industry) it is in the UK's national interest that the negotiations on Horizon 2020 are concluded in due time, such that the new programme can start on time in January 2014. I should also underline that the budgetary aspects do not form part of the partial general approach; these will continue to be dealt with in the context of the Multiannual Financial Framework."

4.10 The Minister undertakes to write again after the Competitiveness Council.


4.11 We thank the Minister for his letter. We were unwilling to grant a scrutiny waiver in advance of the May Competitiveness Council, at which a partial general approach on the framework Horizon 2020 programme was agreed, because we considered that we had insufficient information on the progress made on other elements of the package, including the rules for participating in, and implementing, Horizon 2020 projects and programmes. As partial general approaches have now been reached on the framework programme and on the rules of participation, and the Minister has assured us that the draft Decision establishing the Specific Programme is properly aligned with the overarching Horizon 2020 framework, we are willing to grant a scrutiny waiver to enable the Government to support the partial general approach at the Competiveness Council on 11 December. In so doing, however, we wish to underline that we share the Minister's concern about the need to secure adequate oversight by Member States of the implementation of the Specific Programme and trust that the Government will seek to obtain a satisfactory outcome on this issue before endorsing the proposed partial general approach.

4.12 We have previously indicated that we would be unwilling to grant a scrutiny waiver for the Strategic Innovation Agenda for the European Institute of Innovation and Technology (the EIT) because it contemplates the creation of six new Knowledge and Innovation Communities (twice the number already in existence) and nearly all of the substantial budget increase proposed for the EIT for the period 2014-20 would be used to support the development of these new KICs. We argued that the Agenda should reflect, rather than determine, the resources to be made available to the EIT. This now appears to be the case, as the proposed partial general approach excludes any reference to the number of KICs to be created between 2014-20 or the thematic areas which any new KICs should cover. We therefore agree to grant a scrutiny waiver under paragraph (3)(b) of the Scrutiny Reserve Resolution of 17 November 1998.

4.13 However, both draft Decisions remain under scrutiny pending further information on the Horizon 2020 programme budget and the allocation of EU funding to the EIT, and we ask the Minister to report back to us on the outcome of the December Competitiveness Council.

35   See head note. Back

36   See (33493); HC 86-xi (2012-13), chapter 4 (5 September 2012). Back

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Prepared 13 December 2012