First Report of Session 2021–22 Contents

1EU Research Programme: Horizon Europe1

This EU document is legally and politically important because:

  • the UK and EU have agreed that the UK will associate to Horizon Europe for the period 2021–27, paying an estimated gross contribution over that period of approximately £12.7 billion, subject to adjustments and exchange rate variations.

Action

  • Write to the Minister seeking clarity on the cost of Horizon Europe and how it is to be funded, as well as possible UK exclusions from the scope of the Programme, and how the UK intends to honour the reciprocal obligation to allow EU entities to participate in UK science programmes.
  • Draw to the attention of the Business, Energy and Industrial Strategy Committee and the Science and Technology Committee.

Overview

1.1Under the terms of the UK-EU Trade and Cooperation Agreement (TCA), the UK will associate to the EU’s Framework Programme for Research—Horizon Europe—lasting from 2021 until 2027. This means that UK scientists and businesses will be eligible to access grant funding under the Programme and be able to continue to form and lead collaborative partnerships with EU and other international partners.

1.2The UK’s association requires a financial contribution, which is likely to be around £12.7 billion in gross terms over seven years (see below for further details), although this figure is necessarily speculative and could be adjusted both upwards and downwards based on actual spending as well as exchange rate variations. That figure is a gross contribution, so before funding flowing back to the UK is taken into account. Association will enter into force through the formal adoption of a Protocol to the TCA that is already agreed in principle, after the Horizon Europe Regulation has been adopted.

1.3In her letter of 4 March 2021, the Minister for Science, Research and Innovation (Amanda Solloway MP) updated the Committee on the UK’s association to Horizon Europe, considering that it would further “the UK’s ambition to be a global science superpower”.

1.4The Minister explained that the overarching principles of the UK’s association to the Programme are contained within Part Five of the UK-EU TCA. Specific terms of the UK association are contained in a draft Protocol, relevant to Part Five and published alongside the agreement together with a joint declaration with the EU. The agreed terms, she said, ensure that the UK’s financial contribution is fair and appropriate and participation represents a real benefit to British people and industry.

1.5The Minister explained that the UK will formally associate to Horizon Europe once the EU has adopted its legislation for the Programme, and the relevant Protocol published in draft alongside the UK-EU TCA is adopted by the joint UK-EU Specialised Committee on Participation in Union Programmes.

UK participation in Horizon Europe

1.6Part Five of the TCA addresses UK participation in EU programmes. It is complemented by a financial annex specifying the implementation of the financial conditions and by a draft protocol, called Protocol I. This Protocol specifies the Programmes in which the UK will participate and the scope of its participation, as well as some rules specific to each programme, including Horizon Europe.

1.7The Protocol will be finalised and adopted by the joint UK-EU Specialised Committee on Participation in Union Programmes once the Horizon Europe Regulation has been formally adopted by the Council and European Parliament and published in the Official Journal of the EU.2

1.8In the meantime, several urgent Horizon Europe calls for proposals are already open3 and UK entities are eligible to apply. The only restriction is that grant agreements can only be signed once the association has come into force.

1.9In addition to financing, UK participation in Horizon Europe is based on other conditions as well as clear governance arrangements. As is the case for other third countries, the UK will have no decision-making powers in relation to how Horizon Europe is managed or run although it will be able to attend technical meetings as observers. The EU and UK must make “every effort” within their immigration systems to “facilitate the entry and residence of persons involved in the implementation” of Horizon Europe, “including students, researchers, trainees or volunteers”. There is also a condition of reciprocity, meaning that EU entities “may participate in programmes of the United Kingdom equivalent to” the EU’s research funds “in accordance with United Kingdom law and rules”.

Financial contribution

1.10The UK contribution to the Programme consists of two components:

1.11Any estimates of what the UK’s contributions might be are necessarily speculative as they can be adjusted based on actual EU spending as well as the flow of funding into the UK, and a number of complex adjustment mechanisms to ensure that the UK’s contribution and receipts do not diverge significantly. Based on the EU’s overall ceiling for Horizon Europe over the period 2021–27, though, the UK could expect to make a gross contribution of €14.2 billion (£12.7 billion) as an operational contribution and around €294 million (£263 million) as a participation fee over those seven years.

Scope of Association

1.12The UK is associating to the full Horizon Europe programme with the exception only of the European Innovation Council (EIC) Fund, as that is an EU financial instrument4 and the UK decided not to participate in any such instruments. UK entities can still apply for direct grants under the “EIC Accelerator”.

1.13Exceptionally, Horizon Europe work programmes may restrict UK participation in elements of Horizon Europe for duly justified reasons relating to the EU’s strategic assets, interests, autonomy or security. The UK may, however, unilaterally terminate its participation in Horizon Europe in the event that the UK is excluded from over 10% of Horizon Europe. In addition, the UK’s contribution would be adjusted downwards to take into account exclusions. It was reported5 that a recent European Commission draft of the Horizon Europe Work Programme for 2021–22 contained such exclusions, relating to the EU’s strategic autonomy and specifically covering projects relating to space and quantum computing. The Work Programme is yet to be adopted by Member States, however, and some Member States are known to be concerned about the proposed exclusions, applying to the UK and other third countries.6

Financing of the UK’s contribution

1.14Concerns7 have been expressed that research organisations are expected to make the contribution from existing UK research funding, thus reducing the overall funding for research as the costs of the EU Programme would previously have been covered by the UK’s overall contributions to the EU budget.

1.15In response,8 the Government announced an additional £250 million of science funding for 2021–22, identified to pay for Horizon Europe participation, and noted that £400 million earmarked at Spending Review for 2021–22 to support Government priorities and drive the development of innovative ways to build new science capability would help to pay for association to Horizon Europe.

Our assessment

1.16The Government has not set out clearly its estimate of the cost of association to Horizon Europe. We will seek clarity on the Government’s estimates, as well as information as to how association will be funded, noting the concerns expressed by researchers that the funding would mostly come from existing domestic research budgets.

1.17Concerning scope, it is unclear whether UK entities are likely to be excluded from Horizon Europe space and quantum technologies projects, and so we will also seek further information on that matter.

1.18Finally, the TCA includes reciprocity, meaning that EU entities “may participate in programmes of the United Kingdom equivalent to” the EU’s research funds “in accordance with United Kingdom law and rules”. We will ask the Government how it intends to facilitate such participation.

Action

1.19We have written to the Minister raising the issues identified above. Our letter is set out below.

1.20We are copying our letter to the Business, Energy and Industrial Strategy Committee and the Science and Technology Committee.

Letter to the Minister for Science, Research and Innovation (Amanda Solloway MP)

We considered your letter of 4 March 2021 on Horizon Europe at our meeting of 12 May 2021.

We were pleased to see that the UK and EU agreed that the UK should be able to associate to the EU’s Horizon Europe research programme over the period 2021–27.

There are several outstanding questions about the UK’s association concerning which we would welcome your comments.

First, we estimate the likely gross UK contribution over the seven year period to be in the region of £12.7 billion, although this is necessarily speculative given the potential for adjustments both upwards and downwards according to actual spending, UK receipts and the various safeguards built into the UK/EU Trade and Cooperation Agreement (TCA), and also given the potential for exchange rate variation. It would nevertheless be helpful if you could set out the Government’s broad expectations as to the cost.

Second, there was some concern among the research community—expressed in a letter from Universities UK to the Prime Minister on 16 March 2021—that the UK’s association to Horizon Europe would be funded from existing domestic research budgets. We note that, since then, some additional funding has been put in place, but the new funding does not appear to equate to the likely total cost of association. Could you tell us, please, how the UK’s association to Horizon Europe will be funded?

Third, a draft of the Horizon Europe Work Programme 2021–22 suggested that UK entities might be excluded from some projects in the areas of space and quantum technologies. It would be helpful if you could clarify latest developments on the scope of UK participation in Horizon Europe.

Finally, the TCA included reciprocity, meaning that EU entities “may participate in programmes of the United Kingdom equivalent to” the EU’s research funds “in accordance with United Kingdom law and rules”. How does the Government intend to facilitate such participation?

We look forward to a response within ten working days.

1 Proposal for a Regulation establishing Horizon Europe—the Framework Programme for Research and Innovation, laying down its rules for participation and dissemination; EU reference numbers: 9865/18 + ADDs 1–6, COM(18) 435; Legal base: Article 173(3) TFEU, Article 182(1) TFEU, Article 183 TFEU, Article 188 TFEU (second paragraph), ordinary legislative procedure, QMV;. Department: Business, Energy and Industrial Strategy; Devolved Administrations: Consulted; ESC number: 39882.

2 The Horizon Europe Regulation has been politically agreed, but still needs to be formally adopted and published in the Official Journal of the European Union.

3 The calls for proposals are available on the Commission’s website, searching under Horizon Europe for the 2021–2027 programming period.

4 Financial instruments refers to EU funding arrangements that do not take the form of grants, but where the EU budget is used to provide loans or equity investment for a recipient, in pursuit of an EU public policy objective in areas like infrastructure, employment and climate change.

5 Daily Telegraph, “Brussels tries to freeze UK out of quantum and space projects“ (30 March 2021)

6 Financial Times, “Germany resists EU move to limit UK role on R&D“ (26 April 2021)

7 Letter from Universities UK, to the Prime Minister, 16 March 2021.

8 Department for Business, Energy and Industrial Strategy, “£250 million additional funding to boost collaboration and protect ongoing research“ (1 April 2021)




Published: 18 May 2021 Site information    Accessibility statement