Writing Horizon Europe lump sum proposals: budget planning and work package strategy
4th July 2025 at 11:29 am
Lump Sum (LS) grants, first introduced as a pilot initiative under the final phases of Horizon 2020, have evolved into a standard funding mechanism within Horizon Europe. While initially tested to simplify financial management and reduce administrative burden, the model is no longer classified as a pilot approach. The European Commission has explicitly stated its strategic intention to expand the use of lump sum grants, with the objective of allocating up to 50% of the Horizon Europe budget through lump sum funding mechanisms by the year 2027. This target reflects the Commission’s commitment to simplifying programme implementation while ensuring sound financial management. This policy direction has been confirmed in multiple official communications, including the 2025 Interim Evaluation of Horizon Europe and the 2024 Assessment Report on Lump Sum Funding, both of which outline the suitability and scalability of the lump sum model across various Clusters, ERC and EIC grants.
Proposal planning and budget structuring under the Lump Sum model
Even though LS funding might ease the financial reporting during the project, it might be a bit more work during the proposal writing stage. For LS applications, the rules for Part B allow five extra pages to accommodate this change (e.g., RIA/IA projects have 50 pages instead of 45; EIC Pathfinder Challenges have 30 pages instead of 25). As part of the proposal submission you need to complete an Excel budget table that is provided in the EU Funding and Tenders Portal with cost estimations for each cost category (personnel costs, subcontracting costs, purchase costs and other cost categories) per beneficiary and affiliated entity (if any) and per work package (WP). The completed Excel budget table needs to be submitted separately in the online submission system as an Annex to Part B, as an .xlsx or .xls file as you can see below. For each WP, one LS is then defined based on each partner’s cost estimations, which is paid out only upon completion of its activities. All cost categories are still subject to the same eligibility rules as in actual-cost-based grants.
There are three types of LS-based projects in Horizon Europe:
- Type 1: the so-called ‘top-down’ approach, where the total LS amount is pre-fixed by the Granting Authority and your requested budget must equal (add up to) this. Here, you need to propose a split of lump sums per WP and describe the efforts and resources each beneficiary (and affiliated entity) commits to mobilise for this amount.
- Type 1a: pre-fixed total for certain project types (meaning that the LS is the same for every project funded under that call, regardless of its individual scope, size or consortium configuration).
- Type 1b: pre-fixed building block amounts for certain activities (meaning that the LS will be based on the same amounts per activity (e.g. organise a training workshop), but may vary from project to project depending on the activities selected).
- Type 2: the so-called ‘bottom-up’ approach, where you are free to define the total LS amount by estimating your project’s direct costs, to which a flat rate of 25% is added to cover indirect costs as per the European Commission’s standard practice.
The type of LS model you are required to apply is mentioned in the call topic description.
There is the possibility to split up WPs with a long duration (e.g., management WP, dissemination WP, clinical trial, etc.) into multiple WPs along the reporting periods. Given that WPs are only paid out after completing the activities of the WP at the end of a reporting period, the EC recommends splitting these WPs to ensure smoother project implementation, more sound financial management and to avoid cash-flow problems. It is possible that the resulting WPs contain the same tasks (e.g. project management). In this case, there is no need to repeat the same description for each split WP in the proposal (Part B, table 3.1b). You may include as many WPs as needed, but they should still be effective and support the entire project (a single task or activity is not a WP), so carefully consider what a WP constitutes, how long it runs and how much costs are linked to its activities.
Personnel cost dashboard
When it comes to your proposal evaluation, LS proposals are subject to the same evaluation criteria as for other Horizon projects: ‘excellence’, ‘impact’ and ‘efficiency of the implementation’. Hence, the evaluators will consider if the proposed resources and the distribution of WPs enable the completion of the activities described in the proposal. Only clearly over- or under-estimated costs will lead to a lower score in the ‘implementation’ evaluation criterion. Note that the EC still reserves the right to reduce a certain LS share in the grant preparation phase (contract negotiations with the EC) even after your proposal has been selected for funding if it is deemed too high.
To facilitate the evaluation, experts will use the ‘Horizon dashboard for lump sum evaluations’, a tool that provides a comprehensive analysis of personnel costs. The dashboard compiles data on the number of person months funded across Horizon Europe, broken down by country and organisation type, highlighting regional and sectoral variations in personnel costs. It allows even a more detailed analysis which might only be comprehensible to financial experts: for each specific combination of country and organisation type, it showcases the range of funded costs, focusing on the distribution between the 20th and 80th percentiles and differentiated by staff qualification levels, thus offering a robust benchmark for assessing cost reasonableness in proposals. Therefore, applicants are strongly encouraged to use the Horizon dashboard to benchmark their personnel costs effectively. While proposing costs above the 80th percentile isn’t inherently problematic, it does require extra justification. At last, the “costs per unit” for personnel costs (1 unit is 1 person month) in the detailed LS budget table must not be confused with the concept of “unit costs” in actual-cost-based grants.
Key take-home messages:
| As a general principle, applicants should aim to provide as many justifications for each cost item as possible, as evaluators seek realistic, non-excessive budgets that are feasibly aligned with the project’s objectives. |
| Divide longer WPs into shorter ones matching the reporting periods for better project management and cash flow, but make sure each WP is meaningful and well-planned. |
| Additionally, the description of activities within each WP should be sufficiently detailed, enabling a clear assessment (e.g., based on KPIs or milestones) of whether a WP has been completed. This level of precision ensures that both costs and project’s implementation plan are well-defined and justifiable. |
| Initiate budget discussions with partners early in the process, as refining and agreeing on WP splits and costs may require several iterations. |
In the administrative forms in the EU’s Funding and Tenders Portal you will find a new statement dedicated to LS budgeting in the list of declarations. It goes without saying that in order to submit the proposal, this box must be ticked just like the others.
A trusted partner in your research endeavours
At accelopment, we have supported numerous Horizon Europe projects across all clusters and funding instruments, including those funded through lump sum grants. Our team combines in-depth knowledge of EU funding rules with hands-on experience in proposal preparation, budgeting, and project implementation. We assist applicants in navigating the specific requirements of lump sum funding, from structuring work packages to aligning with evaluation criteria. Let’s collaborate to turn your innovative ideas into successful projects!
Dr. Johannes Ripperger
Research & Innovation Manager
Andreia Cruz
Research & Innovation Project Manager