For some programmes, the European Commission is using lump sums funding in Horizon Europe. The European Commission gives the beneficiary a fixed amount of grant and the project is only evaluated at performance level, not from a financial point of view. This allows beneficiaries to reduce administration and financial errors. Lump sums make the programme simpler by removing the need to report actual costs. This means easier access to the programme, especially for small organisations and newcomers, who often lack the experience and capacity to cope with the complex rules for actual costs.

Lump sums are defined up-front and fixed in the grant agreement. They are paid upon completion of the activities in work packages.

The planning, evaluation, and execution of projects does not change much. In particular, the payment of lump sums is not dependent on successful outcomes (which are never certain in research) and follows the standard payment schedule. Lump sum projects enjoy the same degree of flexibility, and their performance is judged by the same standards.

Despite all simplification, funding based on reimbursement of incurred costs remains complex and error-prone. Lump sums project funding removes all obligations on actual cost reporting and financial ex post audits i.e. a major reduction of administrative burden. The access to the programme becomes easier, especially for small organisations and newcomers. They can focus on the scientific and technical content and less on financial management.

Lump sum evaluation and grant agreement follow the standard approach with the same: evaluation criteria, pre financing and payment scheme, and reporting periods and technical reporting, though focusing on completion of work packages.

One lump sum share is fixed in the grant agreement for each work package. Once the work package completed, the payment can be launched. Payments do not depend on a successful outcome, but on the completion of activities. Work packages can be modified through amendments (e.g. to take into account new scientific developments). No intention and nor basis for judging the performance of lump sum grants more strictly than the
performance of other grants.

There are two lump sums options in Horizon Europe:

Option 1: The call for proposals defines a fixed lump sum. The budget requested in your proposal must be equal to this fixed lump sum. Your proposal must describe the resources mobilised for this amount.

Option 2: You define the lump sum in your proposal. In setting the lump sum, you are free to define the amount necessary to carry out your project.
The lump sum chosen must be justified by the resources mobilised. The type of lump sum is specified in the text of the topic to which you are applying.

Source and more information on the EC website.