Red tape can be a deterrent for small businesses and start-ups; they might sometimes give up on the opportunities offered by the ESI Funds because of the administrative procedures. It means precious potential for improving Europe's competitiveness is left untapped.
This is why a year ago the Commission launched a High Level Group on Simplification to find solutions and facilitate access to the European Structural and Investment Funds for businesses.
So far the Group has issued a set of recommendations in four areas:
- online procedures;
- simpler ways to reimburse expenditure;
- easier access to funding for SMEs;
- increased uptake of financial instruments.
At the end of 2016, the Group will focus on tackling the issue of 'gold-plating', i.e. the additional administrative requirements imposed on beneficiaries by national or local authorities.
Commissioner for Regional Policy Corina Creţu said: "Simplicity and flexibility are key to ensuring the success of ESI Funds investments in Europe. We need to help innovative and quality projects see the light of day by making access to the funds easier for small businesses and start-ups. In addition, the recommendations of the Group are also directly feeding into our reflection on the future of Cohesion Policy after 2020".
Former Commission Vice-President and chairman of the High-Level Group Siim Kallas commented: "Efforts must continue to remove bottlenecks and ensure synergies between the Funds. It is not always necessary to change regulations; best practices have to be identified and promoted throughout the EU. And this is what we aim to do."
- Some of the Group's recommendations have already been included in the Commission's mid-term review of the Multiannual Financial Framework. These include:
- Simpler ways to reimburse expenditure; for example, beneficiaries would no longer have to justify every single cost item but can use flat rates or fixed prices for certain categories of costs, including staff or other business expenses such as insurance or rent;
- Promotion of the "once only" principle; documents provided by the beneficiaries should be kept in digital form and would not have to be reproduced at each step of the implementation of the project;
- Promotion of synergies and best practices, such as single calls for proposals, which could bring together different EU funding streams. It would allow SMEs to apply for one investment package rather than for multiple calls;
- Alignment of the requirements for entrepreneurs who receive loans from financial instruments supported by ESI Funds as much as possible with market practice. This would mean that these requirements are lighter than the requirements for normal grants, for example, fewer documents would be needed, retention periods for documents would be shorter.
Building on the recommendations of the Group, the Commission also proposed to make combinations with the European Fund for Strategic Investments (EFSI) easier, with only one set of procedures for the applicant instead of separate rules for each Fund.
The High Level Group on simplification for beneficiaries of the European Structural and investment (ESI) Funds was set up by the European Commission following the decision of 10 July 2015. It began its work in October 2015.This group of 12 experts advises the European Commission on how to reduce the administrative burden for applicants to the five Funds.
The ESI Funds Regulation for 2014-2020 already offers a range of opportunities for simplification and reduced administrative burden. These include a set of common rules for all ESI Funds, the extended use of simplified costs options and the move towards e-cohesion. The Group also monitors the uptake of these opportunities by the Member States.
The final report of the High Level Group, which is to be expected in 2018, will be one of the cornerstones of the Commission's reflection on the future of Cohesion Policy.