Wednesday, 29 June 2016

UK referendum: what next?

To implement the referendum result, the UK government must initiate the negotiation for the UK’s exit from the EU, which then must be completed in two years. After those two years, UK organisations would no longer receive H2020 grants, unless the negotiation agrees otherwise.

The resignation of the UK prime minister means that a replacement must be appointed before the UK can initiate the exit negotiation. The earliest this can happen is October 2016, giving an end date for UK participation in H2020 of October 2018.

Whether an end date of October 2018 means that all funding – including for running projects – ceases at that date is not pre-defined, but depends on the results of the exit negotiation. When Switzerland held its referendum on free movement of labour and was excluded from much EU research funding, all grant agreements signed at the time were funded by the EU until their completion.

In 2015, 44% of UK exports of goods and services went to the EU. So the UK will want to conclude a trade agreement with the EU before it completes its exit negotiation. Trade deals often take years to prepare: a recent one between the EU and Canada took three to four years to draw up and is still not signed. So it is likely that the new UK prime minister will delay initiating the exit negotiation by a year or two, until the outline of a trade deal with the EU has been agreed.

As a result, instead of negotiating the UK’s exit, EU and UK politicians are now negotiating about when the exit negotiation will begin!

Niels Bohr reportedly said that “Prediction is very difficult, especially about the future”. Currently, it seems likely that H2020 will be business as usual for UK organisations at least until some time in 2019 or 2020, and that projects awarded grants up to that time will be funded by the EU until their completion.

Singleimage - H2020 Training Workshops and Advice

Thursday, 2 June 2016

Audit closes another company

Last month we reported that a German company, GABO, was likely to close as a result of EC audit. This has quickly been followed by the announcement that a French company, Sigma Orionis, has closed as a result of an EC audit.

Like GABO, Sigma Orionis specialises in management of EU research projects. But in this case OLAF – the EC’s anti-fraud office – was involved. The company explains that from nearly two years of auditing, the EC could find no embezzlement, no bogus employment contracts, no fictional invoices, and no extravagant expenditure. But OLAF focussed on the tool used by the company to monitor the amount of time spent on each project by each employee, and prepared a report based on hypotheses and extrapolations. Despite the company’s record of delivering many projects successfully over many years, the EC has decided to suspend all present and future payments to it, forcing it to cease its activities and fire all its 28 employees.

While legal action by both companies is pending, the EC’s suspension of payments will bankrupt them before their cases come to court. Ouch!

Singleimage - H2020 Training Workshops and Advice