Beneficiary capacity building goes beyond technical assistance. It is a strategic lever to transform beneficiaries into capable partners in advancing Cohesion Policy goals over the long term. Managing authorities are central to this endeavour. For them to drive this transformation, several enabling conditions should be in place, namely: a clear mandate in beneficiary capacity building; practical tools and exchange platforms to obtain innovative measures and techniques; and a system to help them better align programme design and management with beneficiary capacity needs. In addition, the manner in which Cohesion Policy is implemented needs to be “beneficiary friendly” and demonstrates the importance of strong capacity, so that beneficiaries can develop their own agency and motivation for capacity building.
Building Beneficiary Capacity under EU Cohesion Policy
Abstract
When well designed and managed, beneficiary capacity building can be a strategic lever for advancing long-term regional development goals.
Capacity building is one of the explicit objectives of Cohesion Policy, with resources dedicated to ensuring the “effective administration and use of Cohesion Policy funds” (European Commission, 2025[1]). Building capacity of actors within the management and control system, including beneficiaries,1 is frequently associated with technical assistance. This is due – at least in part – to the regulatory framework for Cohesion Policy, which places demands on the administrative capacities of the management and control system institutions, such as managing authorities and intermediate bodies, as well as beneficiaries. Nearly 4% of the Cohesion Policy budget – almost EUR 14 billion – are therefore allocated to basic “technical assistance” costs, including staff salaries, information and technology systems, and other administrative and communication costs required to implement the funds.
However, the level of technical assistance resources dedicated to beneficiary capacity building remains unclear owing to limited data availability. A European Commission study on the use of technical assistance funds in the 2014-20 programming period (Box 2.1) found that technical assistance support had not always filtered down to delivery agents and beneficiaries. The study identified this as a gap for implementing Cohesion Policy because its place-based logic is the bottom-up identification of the needs of relevant actors. The study recommended, for example, strengthening the assessment of capacity-building needs in the Cohesion Policy implementation ecosystem and earmarking technical assistance funds for different actors charged with management and delivery functions of the programme (European Commission, 2020[2]).
A European Commission study assessed 32 sample programmes on their use of technical assistance in the 2014-20 programming period. The study showed they allocated most technical assistance funding to human resources (65%), mainly for operational staff salaries and mainly in intermediate bodies, managing authorities and audit authorities. Support for human resources also included staff training and other professional development actions at all levels – from central government co-ordinating bodies, through managing authorities and intermediate bodies, to beneficiaries and other stakeholder groups involved in the implementation process.
The remaining technical assistance funds were used in many ways, including direct or indirect support for beneficiaries. Such uses included organising information days for beneficiaries (with the corresponding travel, accommodation and per diem expenditures) and continuing the monitoring committee activities of previous programmes. More specific examples included:
In Finland, technical assistance was used to support a co-ordinating strategy office to manage the Integrated Territorial Investment strategy, which connected six cities located in several functional urban regions.
In Latvia, technical assistance supported the development of a system for recording and storing data in electronic form, enabling the digitalisation of information and data exchanges between beneficiaries and programme authorities.
In Sweden, technical assistance invested in co-ordination capacity through a central office because there was no standard approach among regional offices of the managing authority to provide services for beneficiaries.
Source: (European Commission, 2020[2]).
In practice, managing authorities provide more than technical assistance when building beneficiary capacity: they directly allocate programme resources in projects that strengthen beneficiaries’ institutional capacity. Figure 2.1 illustrates this by capturing Cohesion Policy resources allocated to measures related to beneficiary capacity building. In addition to technical assistance (Category 1), two other categories are included, namely, specific capacity-building measures (Category 2) and projects related to beneficiary organisation capacity building (Category 3). Categories 1 and 2 cover capacity-building resources that target management and control system bodies – including beneficiaries – but cannot be further distinguished; Category 3 are resources targeting beneficiary organisations only.
% of amount in total planned investment amount
Note: Data include European Regional Development Fund, European Social Funds Plus, Cohesion Fund, Just Transition Fund and Interreg funds. Category 1: Technical assistance includes resources allocated to priority objective technical assistance (codes 179, 180, 181, 182), including programme evaluation studies, preparation, communication and administrative capacity, as well as technical assistance related to specific thematic investments (e.g. Smarter Europe, Greener Europe) under codes 998 and 999. Category 2: Specific capacity-building measures includes preparing territorial development strategies (Code 169), improving programme-body capacity linked to fund implementation (Code 170), enhancing co-operation with partners within and outside European Union (EU) Member States (Interreg, Code 172), and enhancing public authorities’ and stakeholders’ capacity to implement territorial co-operation projects (Interreg, Code 173). Category 3: Projects related to beneficiary organisation capacity building includes a wider range of 30 intervention codes that explicitly contribute to beneficiaries’ capacity development, such as skill development, management and process optimisation, feasibility studies, networking and exchange activities. The majority targets non-public beneficiaries. The full list of intervention measures of each category can be found in Annex 2.A.
Source: OECD calculation based on (European Commission, 2025[3]), data extracted on 7 May 2025.
Interreg programmes are particularly active players in supporting capacity-building initiatives (Figure 2.1). They allocate 7.3% of their resources to technical assistance (Category 1), with around one-third related to climate change adaptation, culture and tourism, and research and innovation. Interreg programmes have also allocated 15.3% of their total planned investment to Category 2, which supports enhancing co-operation with partners within and outside EU Member States, and reinforcing capacity among public authorities and stakeholders to implement territorial co-operation projects. By contrast, not many national and regional programme resources have been channelled to Category 2 activities, which include supporting the preparation of territorial development strategies and improving the capacity of entities linked to programme implementation. In fact, only one-third of national and regional programmes across the European Union have allocated resources to these activities – the North-East Regional Programme in Romania, which participated in the pilot project, is one of them. Cohesion Policy programmes allocate approximately 12% of total planned investment to support projects related to beneficiary organisation capacity building (Category 3), mostly driven by Interreg and regional programmes. This category includes funding for industrial research and feasibility studies for enterprises, co-operation and technology transfer between enterprises and research centres, supporting the development of digital skills and supporting civil society working with marginalised communities.
These differences largely reflect the distinct strategic orientations and targeted outcomes of different programme types. Interreg programmes, with their mandate to foster cross-border and transnational collaboration, naturally prioritise projects that strengthen territorial co-operation and facilitate knowledge exchange. This can explain their relatively higher share of capacity-building investments. Regional programmes are more likely to fund organisational development of small and medium-sized enterprises (SMEs) and initiatives that bolster community-level skills, compared to national programmes. The data and analysis presented above underscore the importance not only of broadening the conventional understanding of “capacity building” beyond technical assistance, but also of aligning capacity-building strategies with the specific objectives and stakeholder ecosystems of Cohesion Policy programmes.
However, the data need to be interpreted with caution. First (as stated above), how much of the investment in technical assistance and specific capacity-building measures (Category 1 and 2) trickles down to beneficiaries remains unknown. For example, half of the EU Member States’ programmes and Interreg programmes opted for “flat rate”2 technical assistance - a simplification measure introduced for the 2021-27 programming period. In such cases they do not need to report how the technical assistance funding is used, and consequently, there is no information in this regard. Second, the data may underestimate the resources allocated to beneficiary capacity building under Category 3. This is because some investment activities, such as pre-project preparation studies for a school construction or exchanges among municipalities for a join water management project, are not captured. These activities are often considered part of the overall investment project and cannot be separated. In addition, some managing authorities may fund beneficiary capacity-building activities with resources beyond those offered through Cohesion Policy. For instance, the Managing Authority of Programme Technical Assistance for European Funds in Poland – which is also the national focal point for European Economic Area (EEA) and Norway grants – capitalises on the synergies between EU Cohesion Policy technical assistance funding and EEA and Norway grants in supporting local-government capacity building.
Moving forward, more disaggregated data or analysis on how managing authorities go about building beneficiary capacity, and the resources mobilised to do so, would provide additional insights – certainly on how much has been allocated, but also the strategies and types of interventions adopted across programmes, as well as their outcomes and impact. Analysing how capacity-building resources are mobilised and used over time can also shed light on emerging trends and generate insights for future directions. By consolidating and disseminating such information and learning from peers across the European Union, managing authorities can increase the range of tools and approaches to beneficiary capacity building.
Beneficiary capacity building as a sustained process and strategic lever for long-term impact
In addition to broadening the scope of what is considered “beneficiary capacity building”, it is also important to position it as a strategic element in Cohesion Policy implementation. Beneficiary support has often been viewed as a relatively short-term activity within the project cycle, helping beneficiaries apply for funds, checking their eligibility and assisting them to move forward quickly to complete the project. In many cases, beneficiary support may also be seen as a “compliance-driven” cost, as resources are spent on helping beneficiaries fulfil reporting requirements and develop documents to comply with regulations and rules. While such support is fundamental, beneficiary capacity building should be more expansive and approached with a “long-term lens”. This means that: 1) beneficiary capacity building itself is a cumulative process and takes time to yield results; 2) it should be designed to contribute to long-term policy effects; and 3) it should be robust and adaptable, ensuring continued relevance across different future contexts and potential evolutions of Cohesion Policy.
When well designed and managed, beneficiary capacity building can be a strategic lever for advancing long-term regional development goals. This means that beneficiaries can learn by doing – provided they are supported through tailored guidance and clear feedback, and given sufficient time for reflection. For instance, achieving the green transition or digital transformation relies heavily on the ability of regional actors to develop robust project pipelines, secure financing and deliver complex projects. When executing green and digital projects and with adequate support, these regional actors could develop expertise in project design, becoming more strategic, efficient and competitive. Examples include municipalities being equipped to implement energy-efficient urban planning projects, local SMEs receiving training to adopt advanced digital technologies, and regional authorities developing long-term water management strategies. In addition, when programme priorities change, a long-term approach to beneficiary capacity building can increase adaptability and iron out steep learning curves related to priority changes. This idea of capacity building as a sustained process and a lever for long-term impact also applies to other public investment policies for regional development beyond Cohesion Policy.
Positioning beneficiary capacity building as a strategic element for Cohesion Policy implementation also enhances beneficiary commitment. When beneficiaries – such as territorial authorities, SMEs or community groups – understand that EU investments in areas like the green transition, social innovation and digital skills can enhance local expertise and networks, they are more likely to invest their time and energy to engage in programmes, develop projects and learn. For example, 38% of respondents from the pilot project’s beneficiary surveys indicated that peer-learning and networking activities would motivate them to engage with the managing authorities. Successful beneficiary networks can become hubs for exchanging knowledge, mentoring new beneficiaries and ensuring continuous capacity development beyond specific funding cycles.
Managing authorities need a clear mandate, information and tools, resources and time, and learning opportunities to build beneficiary capacity sustainably.
Managing authorities are pivotal to beneficiary capacity building. They develop beneficiary support strategies, deploy beneficiary support measures and invest in initiatives that enhance a beneficiary’s capabilities. They are directly involved in programme implementation, and serve as a key interface between policy design and project delivery (OECD, 2020[4]). However, several framework conditions should be in place to enable managing authorities to focus on long-term and impact-oriented beneficiary capacity building, in addition to ensuring they have sufficient resources to do. These conditions include a clearer mandate for beneficiary capacity building; tools, guidance and exchange opportunities allowing them to adopt more innovative and strategic beneficiary support measures; stronger incentives and capabilities for them to analyse beneficiary capacity needs and use the insights to inform programme design and implementation.
A clearer role for managing authorities in beneficiary capacity building
The responsibilities of managing authorities towards beneficiaries are defined in the EU-level regulations. Among the responsibilities of individual managing authorities are making relevant information available to beneficiaries, including providing a document setting the conditions and specific requirements for supporting each operation, as well as “satisfying itself that the beneficiary has the administrative, financial and operational capacity (to execute their tasks)” (PPMI and European Policies Reseach Centre, 2025[5]). In practice, however, the manner in which these responsibilities are delivered is open to interpretation, and often overshadowed by other roles and tasks (e.g. reducing irregularities, ensuring compliance and managing audit trails). Managing authorities sometimes find it difficult to strike a balance between their roles as fund controllers and beneficiary advisors. This tension was raised by pilot managing authorities and other managing authorities during meetings and exchanges of the Network of Heads of Managing Authorities (Box 2.2). How should they balance enforcing the rules and ensuring investment quality, versus helping beneficiaries design and implement projects that will have a long-term impact? Being in a “sandwich position”, managing authorities may perceive ambiguity in their interactions and relationships with beneficiaries. This ambiguity can result in inconsistent levels of guidance, reluctance to provide support or overly cautious communication, ultimately limiting beneficiaries’ ability to build capacity and engage effectively.
In addition, managing authorities operate in environments shaped by the regulatory framework and multi-level governance model of EU Cohesion Policy, as well as the broader institutional and political expectations. These EU and national level framework conditions and dynamics can influence how they interpret their role in beneficiary capacity building, whether they prioritise compliance oversight or invest more effort in supporting and guiding beneficiaries, and to what extent they position themselves as beneficiaries’ partners. Helping managing authorities strike a balance between the control and support functions and build trust-based partnership with their beneficiaries requires a clearer mandate for them from a higher level – regional, national, European, or all three.
Depending on the country, region or programme, the potential role of managing authorities could be to identify or help identify the capacity gaps of territorial actors in delivering regional development investment. They could be encouraged to generate beneficiary capacity needs analyses to inform Cohesion Policy programme planning. They could also be encouraged to experiment with different approaches to beneficiary capacity building. At the European level, the roles and mandates of managing authorities in beneficiary capacity building should be made clear to both the managing authorities and beneficiaries.
Clarifying the role of managing authorities does not mean creating a standardised path for them across the European Union. Rather, it means creating a space for managing authorities to engage in structured exchanges and reflect collectively on longer-term (beyond a single programming period) and more strategic approaches to beneficiary capacity building. Involving managing authorities directly in shaping their role and mandate for beneficiary capacity building can help strengthen their sense of ownership and leadership. This, in turn, enables them to lead their organisations to advance beneficiary capacity building. The European Commission’s Network of Heads of Managing Authorities could offer opportunities for such discussions (Box 2.2). Over the past decade, numerous tools have been made available to support capacity building for Cohesion Policy implementation. Yet the central question remains whether these tools are effectively applied within the policy implementation systems through managing authorities (PPMI and European Policies Reseach Centre, 2025[5]). The answer to this question depends not only on managing authorities’ technical competencies, but also on the strength of their leadership in guiding and embedding beneficiary capacity-building efforts.
Tools and exchange opportunities for managing authorities to learn from each other on beneficiary capacity building
While many managing authorities have developed innovative activities and measures to support beneficiaries, these practices often remain isolated or poorly disseminated. Meanwhile, managing authorities express a strong desire for greater peer exchange and mutual learning – an observation from the pilot project (Box 1.1 in Chapter 1). Such peer exchange can take place at different levels – intra-national, cross-national, thematic (e.g. among regions with similar investment needs) – or topic-oriented (e.g. on common implementation challenges, the shared legal context). National co-ordination bodies and international bodies – such as the European Commission and the OECD – can play a role in facilitating these exchanges; so can established networks among regional managing authorities within a country (e.g. the network of regional managing authorities in France within the association Région de France3). At the European Commission level, various Communities of Practitioners and the Network of Heads of Managing Authorities could offer opportunities for discussion and exchange on beneficiary capacity building (Box 2.2). Regardless of the format, what matters most is that managing authorities have regular, trust-based opportunities to learn from the successes and missteps of peers.
The REGIO Peer2Peer Communities of Practitioners
The REGIO Peer2Peer Communities supported by the European Commission are networks of civil servants from national and regional administrations in EU Member States. They manage EU funding from the European Regional Development Fund, the Cohesion fund and the Just Transition Fund. Participants exchange knowledge and experience relevant to Cohesion Policy. These Communities of Practitioners were designed so that actors could share innovative ideas, develop new approaches and consider new instruments to implement the funds. Examples include the Network of Heads of Managing Authorities, and the New European Bauhaus community and Administrative Capacity Building communities. The Administrative Capacity Building community emerged following the development of administrative capacity-building roadmaps in July 2021 and now boasts over 250 members. The community’s efforts have contributed to tangible results, such as databases of methodologies, indicators and good practices for administrative capacity building.
The Network of Heads of Managing Authorities
The European Commission has launched the first dedicated Network of Heads of Managing Authorities, with the support of the OECD. Through this network, managing authority heads and key decision-makers can exchange on a range of strategic issues, inspiring ideas and common solutions in pursuit of a more effective Cohesion Policy. The first meeting was held in April 2024 in Brussels; the second meeting was held in October 2024 in Faro, Portugal, hosted by the Regional Co-ordination and Development Commission – Algarve, Portugal; the third meeting was held in Brussels in April 2025.
Peer2Peer exchange
The European Commission’s TAIEX-REGIO Peer2Peer instrument supports the organisation of peer-learning exchanges between programme authorities and other bodies in relation to the management of European Regional Development Fund, Cohesion Fund and Just Transition Fund programmes. These exchanges can be organised as either one-off meetings or a series of events and help staff from eligible bodies get answers to their questions on thematic aspects of the EU Regional and Urban Policy or on cross-cutting issues related to the management and control of the programmes.
Supporting managing authorities to develop and integrate beneficiary capacity insights into programme design
Managing authorities should invest in better understanding the strengths and constraints of beneficiaries, and in using the insights to reduce misalignment between investment priorities and the actual conditions, capacities and needs of the targeted beneficiary pool. This misalignment has been found to be a key obstacle in effective fund absorption and Cohesion Policy implementation (Ciffolilli and Pompili, 2024[8]; OECD, 2020[4]; Zubek and Henning, 2016[9]). To develop such an understanding, managing authorities could conduct a beneficiary capacity analysis to understand who the beneficiaries are or will be, the size of their organisation, their operational model and their networks, and more importantly, their capacity needs – strategic, technical, administrative and financial (Table 1.1 in Chapter 1), and the underlying factors that shape their capacity levels and needs. Managing authorities can use the analysis results to better estimate the level of resources needed for beneficiary capacity building across different investment areas (e.g. green transition, social innovation), when in the programming process to build their capacity, through which measures, and in what format.
Comprehensive analyses of beneficiary capacity to support programme design are not yet common. Investment needs (e.g. increasing investments for research and development, reducing greenhouse emissions) are usually well-identified in programming documents. However, less analysis is dedicated to beneficiary capacity to make these investments and reach the stated targets. Such an analysis can range from the average size of SMEs in the region, the focus of current green transition research projects in research institutions and universities, to the efficiency of the public procurement system and the financial capacity of local governments (Netherlands Institute of International Relations, 2024[10]; OECD, 2020[4]). Managing authorities’ lack of use of a comprehensive beneficiary capacity needs analysis in programming could be rooted in two factors, explored below.
The first is a lack of time, resources or expertise within managing authorities to develop such an analysis. Data collection alone can be challenging, as many indicators can be very detailed or difficult to collect and compare, especially in territories or investment areas with many actors. In some cases, managing authorities need to collaborate with other public and private actors (e.g. national or regional statistics office, public procurement body) to collect data. As Cohesion Policy embraces new investment priorities, beneficiary profiles will change. New actors, such as green biotech start‑ups or large‑scale housing consortia, will become increasingly prominent in beneficiary pools. To carry out beneficiary analysis and generate useful insights for programme design, managing authorities will need to strengthen their skills in analytical techniques, such as horizon scanning and foresight exercises, to anticipate emerging trends and associated capacity gaps. The OECD Strategic Foresight Toolkit for Resilient Public Policy (OECD, 2025[11]) and the “Framework for Anticipatory Governance of Emerging Technologies” (OECD, 2024[12]) are potential sources of information for managing authorities to undertake such exercises.
The second factor could be that managing authorities may worry that the results of the beneficiary capacity analysis will negatively reflect on their beneficiary pool when presenting such information in programming negotiations. Beneficiary capacity analysis should not be used to estimate how much beneficiaries can absorb – rather, it should be used to guide resource allocation to make the overall programme more effective. For example, if a programme allocates EUR 10 million to drive SMEs’ green transition, the analysis could cover the number of SMEs to target, their size, their knowledge level on green transition, key green technology trends they have adopted, and so on. The results should be used to help identify the mix of capacity-building and investment activities targeted by the programme (e.g. green technology transfer, access to expertise, upgrading SME business models, networking events), and how much of that budget should be allocated to various capacity-building and investment measures. Therefore, at the European Commission level, it is highly important to encourage managing authorities to undertake beneficiary capacity analysis and address managing authorities’ potential concerns – if any.
The European Commission could play a role in facilitating the development of beneficiary capacity analysis among managing authorities. First, it could encourage them to start with small steps and experiment, helping them to gradually build capacity and systems. For example, managing authorities could select one or two investment areas or measures to analyse the capacity of potential beneficiaries. They can select areas with available data and/or areas that are expected to be more challenging for beneficiaries to invest in (e.g. a new investment area in a region). Starting small by focusing on certain areas is a first step in narrowing the gap between investment needs and beneficiary realities. Pillar 2 in Chapter 3 discusses concrete challenges and practical solutions on analysing beneficiary capacity needs, drawing on the pilot project.
Second, the European Commission could identify examples of good practices among managing authorities and facilitate exchanges on this subject. It could also help capture beneficiary data and identify indicators available at the EU level that could support beneficiary capacity analysis by managing authorities. For example, the Kohesio database, capturing over 640 000 beneficiaries since 2014 (European Commission, 2025[13]), represents a significant attempt to understand beneficiaries and their projects at the EU level. Managing authorities could further explore this database for information regarding their beneficiaries. The European Commission could also have a dialogue with managing authorities to understand what data or analytical tools they require to better analyse beneficiary capacity needs through their existing networks and communities of practice (Box 2.2).
Once beneficiary capacity needs are understood, it is also important to track progress in beneficiary capacity development. To begin with, managing authorities could gather information on outputs (e.g. the number of beneficiaries who received training or attended seminars, the number of questions requesting regulation clarification) and initial results (e.g. a reduction in the number of irregularities, the number of new project ideas supported, the number of partnerships or collaborative projects). They can also work with external partners, such as strategic planning teams in line ministries or statistical offices, to gradually collect data on longer-term impact. It is important to remember, however, that beneficiary capacity building takes time – strong results may not be evident in a single programming period. Thus, the collection of data, information and evidence on the success of capacity-building measures needs to be undertaken with the long term in mind.
Beneficiary capacity building is only sustainable when beneficiaries view Cohesion Policy programmes as a rewarding experience and feel motivated to learn.
Even the most well‑resourced managing authority cannot guide every applicant through every form. Attempts to do so would be unrealistic, place unsustainable demands on staff and risk creating dependence, rather than building capacity. Real, lasting capacity emerges when beneficiaries take ownership of their own development – when they recognise the value of investing time and effort to master processes, adopt new practices and build institutional memory. However, many managing authorities face significant difficulties in promoting such agency, often pointing to recurrent obstacles (“beneficiaries do not read the guidelines”, “the companies do not want to innovate, and we have to convince them”).
Motivation springs from how beneficiaries perceive the benefits of capacity building relative to their other priorities. A small community group offered a EUR 5 000 grant may view compliance workshops as a distraction from core activities, whereas a mid‑sized municipality planning an infrastructure upgrade worth several million euros will view the same workshops as essential to minimising irregularities and unlocking future investments. Similarly, a civil society organisation that sees reputational gains from successful project delivery will enthusiastically embrace training and networking opportunities, while a private firm on a tight timeline may bypass support and risk missteps. Given the diversity of beneficiaries, no single strategy will inspire every beneficiary to invest in capacity building. Nevertheless, to empower beneficiaries to build their own capacity, managing authorities and the European Commission must clearly demonstrate the tangible value of capacity building, make beneficiary capacity-building activities user-friendly, and simplify Cohesion Policy funding processes at the programme and project level to free up beneficiary time and resources for learning. Making capacity building both valuable and manageable will better motivate and equip beneficiaries to develop their skills independently.
Crafting incentives for beneficiaries to build capacity
Managing authorities should clearly communicate the benefits of participation in Cohesion Policy programmes and promote beneficiaries’ sense of ownership of their own capacity building. Participation means not only applying for funds and executing projects but also engaging in discussions, workshops, trainings and networking activities offered by the programmes. Managing authorities must engage leaders within beneficiary organisations, demonstrating how capacity investments yield returns – in smoother audits, faster implementation and stronger community buy‑in, as well as for beneficiaries’ organisational development – in the long run. This engagement will look different depending on whether the target is an SME, a municipality or a civil society group, each with different drivers and barriers to participation. This requires candid dialogue with the different beneficiary groups about risks and rewards. When beneficiaries perceive capacity building as a pathway to new opportunities – further EU funding, partnerships or enhanced reputation – they may be more likely to move from passive recipients of support to active learners. Managing authorities can also set up recognition schemes – public spotlights, small performance bonuses – to signal that capacity building is valued. Exploring incentives such as reductions in co-financing obligations or expedited processing for beneficiary organisations that complete defined modules can align incentives with learning.
Asking beneficiaries how they would like to participate in capacity-building activities is an effective way to better engage with them. Results from the pilot project beneficiary surveys (Box 1.1 in Chapter 1) show that over one-third of surveyed beneficiaries stated they would be motivated to participate in in-person dialogue – either at the managing authority’s premises or at their own premises. Opportunities for networking and peer exchange with other beneficiaries are also welcome formats for participation. Many beneficiaries from the pilot project stated that they find peer-learning useful since they “speak each other’s language” and can learn directly from their peers, as well as apply the good practices shared.
Beneficiary-centric simplification
Since a common challenge cited by managing authorities is that "beneficiaries do not read the guidelines", the question is why. Despite managing authorities’ many efforts to provide user-friendly explanations and guidance to help beneficiaries comply more easily with Cohesion Policy rules and regulations (Pillar 3, Chapter 3), their complexity still poses a challenge. There exists limited room for managing authorities to simplify the narratives and presentation if the regulations and requirements themselves are complicated. When the whole procedure is overly complex and burdensome, it can significantly reduce beneficiaries’ motivation to learn and build capacity. The result is that beneficiaries will either outsource the various tasks (e.g. preparing project applications, conducting assessments for compliance) to external, or seek other funding opportunities. Even when beneficiaries invest in building their own capacities to navigate the system, they may spend most of their time and energy focusing on learning how to manage red tape and administrative burden, crowding out space to focus on strategic and technical capacity building. Simplification is necessary not only to attract beneficiaries to access EU funds, but also to help them focus more on their own capacity building throughout the programme cycle.
Ultimately, whether simplification measures are effective depends on the experience of beneficiaries. The European Commission has been making efforts to simplify Cohesion Policy implementation and other initiatives (Box 2.3). Managing authorities can play a key role in supporting this process by ensuring this simplification focuses on actual beneficiary needs and experience (user experience). Examples can be drawn from beyond the European Union. For example, Australia’s Business Registration Service (n.d.[14]) simplifies business registrations, addressing the common regulatory hurdle for small businesses. Developed through iterative user feedback and prototype testing (Australian Government, 2023[15]), its online tool – “Work out your business registrations” – asks short, targeted questions about business structure, employees, and intended activities, then provides a personalised list of relevant registrations with direct application links. Questions are phrased simply with practical examples (e.g. “Will you pay for benefits that are not salary or wages for your employees, such as a car for private use, food and drink, movie tickets?”) (Australia Government, n.d.[16]).
Managing authorities are likely to be the bodies that “translate” the simplification measures to beneficiaries – but this does not take place automatically. There exist cases where managing authorities have not adopted simplification measures because they did not have time to understand and apply those measures when designing procedures, or did not have enough guidance and were afraid of being audited. To ensure that simplification measures trickle down to beneficiaries, managing authorities need time, guidance and confidence to simplify and change the usual ways of working. They can also further the dialogue with beneficiaries, collect feedback and information, and provide valuable insights to higher-level decision-makers responsible for designing and refining the simplification measures. This bottom-up and beneficiary-centric approach to simplification could also help build trust within the Cohesion Policy implementation system. In such a trust-based system, beneficiaries trust that managing authorities and the European Commission take their voices into account, managing authorities trust their beneficiaries as equal partners, and the European Commission trusts that managing authorities and beneficiaries work together towards better programme implementation.
In 2018, the European Commission published the Simplification Handbook: 80 simplification measures in cohesion policy (European Commission, 2018[17]). These measures include unifying and streamlining the legal framework for easier programming, reducing ex ante conditionalities, extending the use of simplified cost options and introducing the option of “financing not linked to costs”. Some measures have a more direct impact on beneficiaries, such as a clearer document retention period for beneficiaries, simplifying cost items (e.g. standardising hourly rates for staff costs so that beneficiaries do not need to provide specific timetables or salary data). However, what remains unclear is the actual adoption of these measures across EU Member States and programmes, and the effectiveness of simplification initiatives – especially from the beneficiaries’ perspective.
The mid-term review of Cohesion Policy, while focusing on new investment priorities, also addresses simplification and alleviation of the administrative burden for beneficiaries, especially for economic operators like SMEs (European Commission, 2025[18]; European Commission, 2025[19]). The European Commission has proposed to modify the applicable regulations to address new strategic EU priorities and accelerate investment through simplification and flexibility. This includes increasing flexibility for transfers of Cohesion Policy funds to the suggested new priority areas within a programme; a one-off additional pre-financing to all programmes that reallocate at least 15% of their programme allocations to new priorities; and extending the end date for these programmes’ eligibility for Cohesion Policy by one year. To ease the implementation of the Just Transition Fund, restrictions regarding the modification and functioning of its programmes are removed.
The Political Guidelines for the Next European Commission 2024-2029 (European Commission, 2024[20]) highlight the simplification of EU policies and laws and their better implementation as essential to make business easier and faster in Europe. To deliver on this, the Commission work programme focuses heavily on simplification initiatives, introducing 11 key proposals to cut red tape (European Commission, 2025[21]). It aims to streamline rules and reduce the administrative burden for businesses by 25%, and for SMEs by 35%, by the end of 2029. As part of this work programme, in February 2025, the European Commission proposed the first and second Omnibus packages of sustainability rules aiming to simplify and reduce EU sustainability reporting requirements. While these packages do not directly target Cohesion Policy investments and beneficiaries, certain measures will affect them, such as the simplification of “do no significant harm” criteria.
Beneficiaries may be stretched thin when investment funds are fragmented
Experience from the pilot project covering six managing authorities shows that the difficulty of engaging beneficiaries could stem from a systemic problem – the fragmentation of funds and programmes that stretch beneficiary capacity and time. There exist many studies analysing the potential overlaps and competition between the Recovery and Resilience Facility and Cohesion Policy from the investment perspective. From the beneficiaries’ perspective, the challenge is also that they are not able to dedicate the necessary resources and time to engage in different programmes – including understanding the programme objectives, designing high-quality projects, and participating in discussions. The Recovery and Resilience Facility’s shorter implementation period also led to beneficiaries to prioritise applications and projects targeting those funds rather than Cohesion Policy funds. From the managing authorities’ perspective, the challenge lies in motivating beneficiaries to allocate time and resources to participate in Cohesion Policy programme discussions. Enhancing co-ordination among the funding schemes available to territorial actors would help safeguard the Cohesion Policy programme’s engagement efforts with beneficiaries. Effective co-ordination would also benefit other investment programmes, ultimately making public investment for collective regional development more effective.
Managing authorities are pivotal actors in beneficiary capacity building. They develop strategies and measures to support beneficiaries, allocate technical assistance and explore other resources for capacity-building activities. They also directly invest in initiatives contributing to beneficiaries’ organisational development. Supporting managing authorities in improving their beneficiaries’ capacity means exploring innovative approaches in capacity-building to better advance Cohesion Policy objectives.
Beneficiary capacity building should be considered a strategic lever for Cohesion Policy implementation, not just a means to improve administrative processes – now and in the future. Doing so, however, means approaching beneficiary capacity building as a long-term and impact-oriented activity – one that aims to transform beneficiaries into capable partners that contribute to regional development and Cohesion Policy goals, and is embedded in programme planning. A few enabling conditions are necessary for managing authorities to pursue a long-term and impact-oriented beneficiary capacity-building model. These include: 1) a clear mandate for beneficiary capacity building, enabling them to build and maintain trust-based partnerships with their beneficiaries; 2) opportunities to learn from peers and pilot innovative measures in supporting beneficiaries; and 3) incentives and capacities to analyse beneficiary capacity needs and integrate the insights into programme design and management. EU Member State governments and the European Commission could enhance data collection and analysis on beneficiary capacity to construct a clearer picture of the capacity-building measures already implemented across programmes. They could also empower managing authorities to test innovative initiatives and identify practical ways to build their own capacity building. Working together, managing authorities and beneficiaries can generate real and lasting capacity for investing Cohesion Policy funds.
References
[16] Australia Government (n.d.), Work out your business registrations, https://business.gov.au/registrations/work-out-your-business-registrations (accessed on 12 June 2025).
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