Performance-based Instruments

The original full study analyses the implications of a shift towards performance-based instruments for budgetary control. In the Recovery and Resilience Facility (RRF) and (to a lesser extent) Cohesion Policy, the use of Financing not Linked to Costs (FNLC) was adopted as a means of simplifying the financing of programmes funded by the EU. Instead of disbursements being based on costs, beneficiaries have to demonstrate that they have made progress towards achieving plans. For the RRF, qualitative milestones and quantitative targets are at the core of this new approach: beyond pre-financing, subsequent tranches of funding are only released once planned milestones/targets have been reached. From the perspective of budgetary control, monitoring and scrutinising performance-based instruments is more complicated than for the more traditional cost-based approach.