From the 2026 budget audit
6 billion Ft a year to run the grant machinery — for grants that do not improve innovation.
The managing agency exists to operate the levy-and-grant loop. As the three sub-funds phase out, the agency phases out with them — its 6,416 millió Ft operational cost ends when the loop does.
6,416 millió Ft — roughly 665 Ft per employed worker — funding the salaries, IT, and premises of an agency that scores grant applications and monitors projects in a system the evidence suggests is not converting public money into private innovation capacity.
What you see — and what you don't
The seen: staff processing applications, running calls, monitoring deliverables — administrative work by capable people. The unseen: every firm whose 0.3% contribution pays both the grants and the machinery that distributes them, in a country whose private business R&D still runs below the EU average despite a decade of public grant spending.
Objection
"The staff are doing real work — they can't just be let go because the system is reformed."
Answer
The reform protects the agency's permanent staff through a 24-month severance-with-overlap: full salary continues while they transition to the private sector or EU funds administration, where grant-management and contract-monitoring skills are transferable and in demand. What phases out is the institution, not the people's ability to earn. The non-payroll spend — IT systems, premises — follows the grant programmes to zero; those are vendor contracts, not employee lives.
Share if you think administrative machinery should wind down when the programme it runs is phased out.
The analyst's verdict
Funds transferred to the managing agency
Rationale
This line funds the agency that administers the fund — runs the calls, scores applications, manages contracts, monitors projects. It is the operating cost of the grant machinery. Its classification follows mechanically from the classification of the three sub-funds: if the grant programmes are phased out, the agency administering them has progressively less to administer, and the line phases out in step. The agency is not an independent rights-protection function; it exists to operate the levy-and-grant loop. Once that loop is wound down, the administrative line has no residual rationale. The relevant question is not whether to phase the line out — that follows from the sub-fund classifications — but how to honour the agency's employees during the transition.
Transition mechanism
Phase-Out over 5 years, with the protected party being the agency's permanent-contract staff. The 6,416.0 millió Ft envelope is administrative: it funds salaries, employer contributions, and the agency's own operating and IT costs. Severance-with-overlap protects only the payroll component. KSH labour-cost data for the public-administration sector (NACE O) indicates personnel and employer contributions account for roughly 55-60% of operating cost in administrative public bodies of this kind;[^5] applying ~58% gives a payroll component of approximately 3,721 millió Ft. The non-payroll component (~2,695 millió Ft of IT, premises, services) falls to zero as the grant programmes wind down and the systems are decommissioned. Staff are offered 24 months of severance-with-overlap: they keep their full salary for two years and may take private-sector employment in that window while keeping both incomes. Grant-administration, contract-management, and monitoring-and-evaluation skills are general administrative and project-management skills with a broad private-sector and EU-funds-administration labour market. After the two-year overlap, the payroll bridge ends. The line reaches zero by year 5.
Affected groups
The agency's permanent staff — on public-administration salary scales — are the protected party; the two-year severance-with-overlap and the transferability of their skills make private-sector or EU-administration re-employment the realistic household path. The non-payroll spend (IT vendors, premises) ends without bridge protection, because those are contract counterparties whose rights are honoured through contract run-off, not employee transition.
Sources
- Labour-cost statistics for public administration (NACE section O) · Kozponti Statisztikai Hivatal (KSH) (2024)
Free Society Institute
Support independent analysis
Our research is free, open, and unsponsored. If you find it valuable, help us keep it that way.