Questions and Answers About the Restructuring of HUN-REN

Objectives of the Restructuring

Why is it necessary to renew the research network?

Although the restructuring of the research network began in 2019, the measures taken so far have not achieved the expected results. Despite some research centers delivering good results, it is clear that the network's overall research and innovation performance could be significantly improved. Additionally, there is considerable room for progress in utilizing research results more effectively.

What supports the claim that the network's performance falls short of its potential?

In early 2024, a comprehensive scientific and organizational audit of the research network began, involving around 100 distinguished Hungarian and international experts. The evaluation was conducted based on a predefined set of criteria, assessing the performance of individual research centers. In addition, we compared HUN-REN's performance with the data of numerous foreign networks (both European and non-European) - a process we typically refer to as a benchmark analysis - and found that, overall, in terms of values per researcher, we are positioned in the mid-range. Simultaneously, eight work packages composed of external and internal experts worked on strategically significant topics and identified intervention points.

Why are the documents underlying the restructuring not public?

The purpose of the analyses was to provide the research network with a clear understanding of its own performance, strengths, and weaknesses, as well as to examine how its operations could be made more effective and efficient. Based on these documents, we identified the directions for the restructuring, and the international evaluation helped research institutions better understand their areas for improvement. These documents contain sensitive data and information about the research institutions. It is no coincidence that other international research networks also do not publish the results of their internal reviews or similar background analyses.

Why can’t the research network’s performance be improved under the current organizational model?

The individual audits clearly highlighted the need for organizational renewal. Professor Alexander Zehnder, who led the international audit, stated the following in his letter dated October 4: “To achieve these goals, the organization must become more dynamic and interactive by transforming its structure and processes.” In other words, HUN-REN can only achieve its designated goals through a comprehensive renewal of its operational structure and processes. The current framework allows for incremental improvements in specific areas but does not support a full-scale transformation. The HUN-REN Act provides institutional, financial, and operational guarantees necessary for implementing these changes and ensuring more efficient operations compared to the existing model.

What are the main issues with the current operations at the network level?

There is no network-wide unified strategy outlining the strategic goals and directions of HUN-REN for the next 3-5 years. As a result, proper coordination within the organization is lacking, and the level of collaboration is low: the research centers mostly operate independently of each other, and synergies are not utilized at either the scientific or functional levels. The network is not sufficiently funded, resulting in salaries that lag behind those of comparable international institutions. Many facilities require significant research infrastructure upgrades, and the properties are not owned by HUN-REN (which is also one of the key obstacles to infrastructure development). The current base-budget state financing model does not incentivize higher performance, either at the organizational or individual level. The budget management framework is overly rigid, and a more flexible approach is needed.

What are the main issues with the current operations at the research center level?

The international evaluation, conducted by renowned experts in various fields, highlighted several areas in need of improvement. While the scientific results at most research centers can be considered commendable, few research centers have a clearly defined strategy, and their management systems are often ineffective. Many aspects of operations, such as performance evaluation systems and administrative support for researchers, require comprehensive development. A more deliberate approach to managing research topics is needed. Co-operation within research centers, across the research network, and with external stakeholders need significant improvement. It is also necessary to strengthen the utilization of scientific results, namely innovation activities.

What are the main objectives of the restructuring?

The HUN-REN Act provides institutional, financial, and operational guarantees and stability for Hungarian research and researchers. The key objectives are as follows:

Fostering a true network mindset and operation that offers multidisciplinary solutions to complex social and economic challenges (e.g. climate change, healthy lifestyle).
Developing research topics that strike a balance between fundamental and mission-driven research, with a focus on social and economic utility. Strengthening the innovation activities of the network.
Creating unified funding acquisition strategies and improving the efficiency of grant administration.
Introducing a performance-based remuneration system that enables salary increases of 1.5–2 times the current levels and rewards individual goals and achievements. This would support the creation of a career model crucial for ensuring future generations of researchers.
Ensuring ownership of properties and providing a high-quality work environment and infrastructure.
Strengthening international relations, attracting foreign researchers and keeping pace with global trends.
Shifting focus to a mindset that prioritizes shared goals and collaboration.

As a taxpayer funding HUN-REN, what can we expect from the renewed organization?

HUN-REN has already contributed significantly to the advancement of science in Hungary, the preservation and enrichment of collective knowledge and culture, the training of future educators and researchers, and enhancing the country’s international reputation. The aim is to perform these activities more effectively while placing much greater emphasis on the practical application of research results in order to better support Hungary’s economic development and address pressing social and economic challenges.

The method of restructuring

How did HUN-REN contribute to developing the restructuring concept and drafting the proposed legislation?

At the end of September, we reviewed the results of the international audit with the leadership and research community of HUN-REN during our fifth workshop, attended by more than 150 participants from the research network. Following this, we presented the principles defined during the workshop to Minister Balázs Hankó, who assured us of his support. In mid-October, the HUN-REN Governing Board issued a statement outlining the key elements of the new model. The Ministry of Culture and Innovation then used this as the foundation to draft the proposed legislation, which was discussed by the government at the end of October. The collaboration with the Ministry was close and active during this process, the core principles of the new model were incorporated into the draft at the initiative of HUN-REN.

How were research centers involved in drafting the proposed legislation?

From October 15, 2024, the president and CEO of HUN-REN held regular meetings with the heads of research centers to share the results of discussions with senior representatives of the Ministry of Culture and Innovation regarding the restructuring of the research network.

The feedback process on the draft legislation involved both HUN-REN Central Administration leaders and the heads of research centers, who consulted with their staff. Between November 7 and 14, research center leaders organized numerous employee forums to ensure broad participation. This approach allowed HUN-REN employees to become familiar with the provisions of the proposed law.

The initial suggestions and feedback were reviewed by the Governing Board after consultations with directors-general. After consolidating and summarizing the perspectives of the research centers, the Governing Board submitted HUN-REN’s official position to the Ministry of Culture and Innovation.

Since then, regular weekly meetings with the heads of research centers have continued, providing a platform to discuss questions related to the restructuring and the development of the new operational model.

Did HUN-REN employees have the opportunity to provide feedback on the draft legislation?

Yes, in addition to leaders, all HUN-REN employees were consulted on the strategic directions prior to the creation of the draft legislation. A questionnaire sent to all staff was filled out by 1,374 staff members. Additionally, through research center and institute leaders, every employee had the chance to contribute to the review of the draft legislation.

During the feedback process, between November 7 and 14, research center leaders organized numerous employee forums, which were attended by hundreds of participants.

All discussions involved relevant employees and leaders. Both leaders and employees were/are informed promptly and appropriately about management decisions, not only through forums but also via newsletters and updates on the HUN-REN website.

Was the research community’s feedback truly considered?

Several amendments were incorporated into the new draft legislation specifically at the initiative of the research community. The draft submitted to Parliament includes all the amendments proposed by the HUN-REN Governing Board (GB) based on the Joint Declaration of HUN-REN institution leaders to the Ministry of Culture and Innovation (KIM). Key changes include:

The submitted draft stipulates that the HUN-REN, to be established as a distinct legal entity, will be governed by the general rules for legal entities under the Civil Code (Ptk.), replacing the previous proposal that referenced foundation-specific regulations. As a further result of the amendment, the current research centers and independent research institutes will continue their activities as organizational units with derived legal personality.
The rules governing the appointment of Governing Board (GB) members and the participation of research institution leaders were revised. Under the amendment, the responsible minister is now required to seek the opinion of the National Science Policy Council before nominating the members of the GB.
The heads of research institutions will participate in GB meetings with three delegates who have consultative rights. Additionally, the work of the GB will also be supported by an advisory Institutional Leadership Council, composed of the directors of research institutes.
The draft now explicitly includes provisions to preserve the possibility for exploratory research based on free topic selection alongside research themes aligned with area-specific priorities set in the public funding agreement. The revised draft also confirms that research institutions will conduct scientific research in their fields in accordance with their professional programs.

Going forward, how can HUN-REN employees contribute to developing the new operational model?

Engaging the entire HUN-REN community is a top priority for addressing the remaining aspects of the restructuring. The goal is to establish an operational model that HUN-REN employees can identify with and fully support. One key initiative is the newly established Transformation Program Office, which supports the restructuring process. Many researchers and research support staff are actively involved in its subprograms. In addition, HUN-REN’s management and research center directors are organizing forums, meetings, and discussions focused on specific topics to collect and integrate employee feedback into the development of the new operational model.

When will the restructuring take place?

According to the draft legislation, the restructuring could take place on April 1, 2025, at the earliest.

Legal status

Is it true that the institutes will lose their independent legal status and that HUN-REN will function as a single legal entity?

This statement, as presented, is not accurate. The new HUN-REN will become an independent legal entity with a unique status. At the same time, the current research centers and independent research institutes will continue their activities as organizational units with derived legal personality, thereby retaining their autonomy.

Will HUN-REN operate as a KEKVA-type institution, similar to the universities that underwent a model shift?

No, as the 2021 Act IX on public interest asset management foundations performing public duty (commonly referred to as the KEKVA Act) will not apply to HUN-REN in any way. HUN-REN will not operate as a foundation but as a unique legal entity, with no maintainer-maintainee relationship and no board of trustees. The general rules for legal entities under the Civil Code (Ptk.) will apply to HUN-REN as a background framework, rather than foundation-specific regulations. The legislation has been designed to align with HUN-REN’s specific characteristics.

Why does the HUN-REN law resemble the KEKVA law in some areas?

The HUN-REN law only mirrors KEKVA regulations in matters related to (state-owned) property transfer, financing, and conflict of interest rules. This is because HUN-REN is transitioning from a budgetary institution to a private-law organization outside the state budget framework (as this is necessary for establishing a flexible operating environment and a long-term, stable financing and asset structure). The rules related to the mentioned attributes must be stipulated in the HUN-REN law, as is the case with other similar legal entities operating outside the state budget but entrusted with public tasks - such as universities maintained by KEKVA. However, there are no similarities in governance structure, leadership powers, or organizational framework.

Is it possible that institutions will be eliminated during the restructuring?

The current research centers and independent institutes, as budgetary institutions (and not as research institutions), will cease to exist through legal succession. Their activities will continue as part of HUN-REN in the form of organizational units with derived legal personality (research institutions). It is important that these organizational units endowed with legal personality will become the general legal successors of the respective research institutions in terms of rights and obligations.

Governance

What will the new organizational structure of HUN-REN look like?

Our aim is to establish a more efficient operational model. The proposed new institutional structure will be simpler, more transparent, and feature clearly defined levels of responsibility.

There will be no changes regarding the fact that the Governing Board, consisting predominantly of scholars, will remain the executive and decision-making body of the new legal entity, led by the President, while the CEO will serve as the operational head of the research network.

Governing Board (GB)

the executive and decision-making body of the new legal entity
consists of seven members, with the majority (more than half) selected from among scholars
will be assisted by an international scientific advisory board (members appointed by the GB President).
Will be supported by the institution directors' collegium (comprising leaders of research institutions).

President

leader of the GB and representative of HUN-REN (elected by the GB, except during the initial establishment)
oversees HUN-REN's operations.
reports to the GB
In case of absence:
- scientific matters are handled by the Vice Presidents for scientific fields.
- operational and organizational matters are managed by the CEO.

CEO

operational leader and administrative director of HUN-REN.
reports to the GB
the President may delegate to the CEO partially or entirely:
- ownership rights related to HUN-REN's assets
- tasks assigned to the President by the foundational charter

Supervisory Board

consists of three members, with the chairperson elected from among them
- the foundational charter may set educational and professional requirements for the Supervisory Board chairperson.

Vice Presidents for scientific fields

coordinate the scientific activities of research institutions
their responsibilities are defined by the Organizational and Operational Rules (SZMSZ) and the foundational charter

Will the Governing Board (GB) truly operate autonomously in managing HUN-REN?

Full autonomy will be ensured by transferring the exercise of founding rights to the Governing Board (GB), which is predominantly composed of scientists, rather than retaining these rights with the minister who formally established HUN-REN. With the transfer of founding rights to the GB, HUN-REN's formal-legal connection to the Government or the Ministry of Culture and Innovation (KIM) will cease. The legal relationship with the state will be maintained solely through the public duty-financing agreement. The authority of the Governing Board will remain essentially unchanged from the current structure, ensuring that it continues to function as the decision-making and executive body of HUN-REN.

How can the independence of the Governing Board (IT) from politics be ensured?

Strict conflict-of-interest rules outlined in the draft legislation apply to members of the Governing Board, the CEO, and the supervisory committee. For instance, members cannot include Members of Parliament, senior political officials as defined by the law on government administration, or even professional managers active in politics.

Will the Governing Board (GB) take scientific considerations into account?

Firstly, the majority of the members of HUN-REN's Governing Board (GB) must be selected from among practicing scientists. Secondly, according to the current draft, the National Science Policy Council will provide opinions on GB members. This Council includes the President of the Hungarian Academy of Sciences (MTA), the President of HUN-REN, as well as leaders from the academic and corporate sectors. Thirdly, the draft law imposes strict conflict-of-interest rules on GB members, the CEO, and members of the Supervisory Board. Individuals such as Members of Parliament, political executives defined by the Government Administration Act, government commissioners, ministerial commissioners, senior professional executives, or even professional leaders, are prohibited from holding such roles. Additionally, civil servants employed at special-status organizations, as defined by Act CVII of 2019 on the legal status of special-status bodies and their employees, are also excluded, as are individuals who held any of the aforementioned positions within one year prior to their appointment as Governing Board member, CEO, or Supervisory Board member. Strict conflict-of-interest rules apply to the executive officers of legal entities established or maintained by HUN-REN under the Hungarian Civil Code (Ptk.). Furthermore, the draft law stipulates that individuals holding such positions cannot simultaneously serve as officers of a supported foundation or supported legal entity under the Act on Public-Interest Asset Management Foundations Performing Public Duties (hereinafter collectively referred to as "supported entities") if holding these roles concurrently would compromise, or limit, their ability to perform their duties impartially, objectively, and without bias.

Compliance with conflict-of-interest rules may also be reviewed by the State Audit Office, and this review can be initiated by an official of HUN-REN.

Will the Governing Board consider scientific perspectives?

In HUN-REN's governance structure, the Governing Board, which is predominantly composed of active scientists, continues to serve as the decision-making body. Under the proposal, it retains similar powers to those currently in place. The Constitutional Court concluded in the second half of 2022 that this structure adheres to the principle of scientific research freedom.

The draft law ensures that the majority of the seven-member Governing Board will be selected from among individuals actively engaged in science.

Furthermore, the proposal specifies that decisions on key issues - such as the establishment, restructuring, or termination of institutes, or the approval of research institute budgets - must be approved by a majority of the Governing Board's scientific members. It also stipulates, in alignment with the Fundamental Law, that only those involved in scientific research may decide on scientific matters.

What role do institution leaders have in the work of the Governing Board (GB)?

Up to three individuals delegated by the leaders of the research institutions may participate in GB meetings with consultative rights. Additionally, the institution leaders will form an Institutional Leadership Council, which must convene at least twice a year. This council will have an advisory role to support the work of the GB.

Autonomy of research institutions

What guarantees the autonomy of research institutions?

The draft law ensures that the current research centers and independent institutes will continue to operate within the newly established HUN-REN as its legally recognized organizational units.

The draft law stipulates that institutions will possess derivative legal personality, and the founder (the minister responsible for coordinating science policy on behalf of the state) is required to issue the founding charter in accordance with this provision. In the future, HUN-REN may designate certain organizational units as legal entities, in compliance with the provisions of the Civil Code (Ptk.).

Will the names of the research institutions change during the restructuring?

No, the previous names of the research institutions will remain unchanged, as will the titles of directors and general directors. The draft legislation (aligned with the recommendations of institution leaders) uses the terms "research institution" and "research institution leader" uniformly. However, in practice, the existing names and titles can continue to be used.

What does the autonomy of research institutions mean?

Scientific research and innovation activities will continue within the research institutions, upholding the principle of academic freedom. Institutions will conduct scientific research in their respective fields based on their professional programs, provide opinions on scientific matters, support the professional development of their researchers and ensure the training of future experts. In addition, they will collaborate with higher education institutions in teaching, research, and doctoral programs in accordance with the agreements signed with such institutions.

Efforts are being made to ensure that institutions maintain broad operational autonomy in other areas as well, as this supports the effective fulfillment of their core responsibilities. The research institution leader is responsible for the following tasks:

determining the internal organizational structure and operational framework of the research institution,
managing the operational direction for fulfilling the public duties and core activities of the institution.
developing the scientific strategy of the research institution, preparing work plans, and coordinating scientific and innovation activities,
exercising employer rights,
overseeing the establishment of cooperation agreements and contracts related to scientific work,
managing allocated financial resources and self-generated income responsibly,
submitting and implementing grant applications related to scientific work,
exercising ownership rights over business entities,
managing the assets of the research institution.

However, certain general frameworks and rules need to be established centrally to leverage the benefits of operating as a network. Reducing redundancies across the network will significantly improve efficiency, further strengthened by coordinated operations within the network's structure. The specific tasks and powers of the research institutions and their leaders must be defined in the founding documents and the organizational and operational regulations. Regular consultations are held with the institution leaders regarding these matters.

Can the state dictate who researches what?

The HUN-REN Hungarian Research Network is committed to the values of the Bonn Declaration, which identifies academic freedom as a cornerstone of democracy and resilience - these principles form the foundation of the Network's values.

The state cannot dictate in the future - just as it has not done so in the past - what methods researchers or research groups should use or what research they should conduct. The draft law fully respects and adheres to the Constitutional Court's ruling, which states that: the freedom of scientific research can only be ensured if (1) it is free from external (particularly state) influence, and (2) it is organizationally guaranteed within the research institution that representatives of science can express their views, meaning that decisions on scientific matters rest with the representatives of science.

At the same time, it is a legitimate expectation from the state - and fully aligned with international standards - that the state, in collaboration with HUN-REN, defines priority research directions and broad research themes. These should align with Hungary's RDI (Research, Development, and Innovation) strategy and the Neumann János Program while addressing topics of significant importance to the country, contributing to solutions for major societal and economic challenges. However, establishing these research directions together does not and will not limit the freedom of scientific research. This freedom has always been fully respected and will continue to be upheld.

An important safeguard is that, based on the draft law, the agreement between HUN-REN and the state must stipulate not only the research topics defined by thematic priorities but also exploratory research conducted under free topic selection.

Financing

Wouldn’t it have been enough to simply increase funding and retain the current structure?

Increased funding alone is not sufficient to ensure that HUN-REN operates more effectively. The 2021 funding increase did not lead to a significant improvement in scientific and innovation performance because it was not accompanied by measures to enhance operational efficiency and effectiveness. This was clearly highlighted by the international audit as well.

A new, performance-based financing and operational model, combined with increased resources, offers a substantial opportunity to elevate the network’s overall performance to a higher level.

To what extent will HUN-REN’s state funding increase?

By 2025, the draft law includes a 50% increase in funding for HUN-REN, amounting to nearly 18 billion forints (considering the establishment of the new HUN-REN on April 1). It also provides for a one-time additional support related to the restructuring. In 2026, HUN-REN’s funding will increase by 75% compared to the 2024 baseline, and by 100% starting in 2027, exceeding 97 billion forints. The Government guarantees this funding for a six-year period under a public duty-financing agreement, which will also be formalized in a 25-year framework agreement between HUN-REN and the state.

Won’t inflation devalue the funding, even in the short term?

No, because the draft law requires the state and HUN-REN to establish a six-year agreement that includes a framework for adjusting the funding to maintain its value over time. In other words, HUN-REN's funding will retain its real value.

What does it mean that the state will sign a public duty financing contract with HUN-REN?

The fulfillment of HUN-REN's public duties will primarily be defined by the public duty financing contract (KFSZ). Unlike the current base-principle state financing, this represents a performance-based financing system. The agreement must specify, among other things, the committed volume of activities performed, their indicators, and the amount of funding.

According to this contract, the state will account annually for the predetermined support amounts for each fiscal year based on HUN-REN's annual reports. Importantly, the contract will be concluded between the two parties (the state and HUN-REN), meaning its content must be approved by both parties. This ensures that only elements approved by the HUN-REN Governing Board can be included in the public duty financing agreement (KFSZ).

Furthermore, the KFSZ will be a private law agreement (since it is concluded between the state and a private legal entity), and as the draft law explicitly states, it will be enforceable under private law. In other words, if the state fails to fulfill its obligations under the contract, HUN-REN will have the right to seek legal recourse through the courts.

Why is the proposed performance-based funding beneficial?

Linking funding to defined tasks, measurable results, and performance creates motivation at both the organizational and individual levels, encouraging greater achievement.

Is it true that HUN-REN will lose access to EU funding after the restructuring, similarly to the universities that underwent a model-shift?

This is completely untrue. The direct EU funding that plays a crucial role in HUN-REN's professional collaborations and financing is not at risk. Neither the new legal status, governance system, financing model, nor any other element of the draft law gives any EU institution reason to object. HUN-REN will not fall under the law governing public-interest asset management foundations responsible for public tasks, and the proposal contains no references to such a framework. This has never been an objective. Claims made in the Hungarian press about this issue are entirely baseless.

Career model and salary increases

What guarantees does the draft law provide for researchers?

The draft law includes a 25-year framework agreement and predictable and value-preserving task- and performance-based funding, secured for 6-year periods. It creates the financial flexibility needed to establish a genuine and attractive career model for researchers.

Will the increased funding include raises for the currently very low salaries?

Yes, the significant increase in HUN-REN's budget over the coming years will enable the offering of internationally competitive salaries, aimed at retaining Hungarian researchers and attracting talent back to the country. The goal is to establish a career model and a performance-based salary system, with predictability and meritocracy as its two key pillars.

Could anyone's salary decrease during the restructuring?

No, Section 31 of the draft law explicitly and as a guarantee stipulates that upon the transition to employment under the new legal entity, the employees' salaries will remain identical to the salary amounts they previously received at the predecessor organization.

Will the salary increases apply only to researchers?

No, the salary adjustment intentions also apply to non-research staff in addition to researchers. They are equally valued members of the HUN-REN community, just as important as the researchers.

Assets

Is it true that the Hungarian Academy of Sciences' (MTA) real estate portfolio is being privatized?

This is a complete misunderstanding; in fact, the opposite is true. If the General Assembly of the Hungarian Academy of Sciences (MTA) supports the compromise reached between the Ministry for Culture and Innovation (KIM) and the MTA leadership regarding the key conditions of the sale, and based on that, the MTA concludes a sales contract with the Hungarian National Asset Management (MNV), the properties used by the research institutes will become state-owned through a sale transaction. Subsequently, these properties will be transferred to HUN-REN as an in-kind asset grant to ensure that responsible and efficient property management is carried out directly by the research institutes. There is no "privatization" planned or ever considered. All asset management rules applicable to HUN-REN are thoroughly detailed in the new draft law. Highlighting just two guarantees:

HUN-REN may only use revenues generated from the utilization of its assets for the public duties explicitly defined in the law
if any public duty is later removed from HUN-REN - by virtue of the law - the assets associated with performing that task will revert to the state.

The Hungarian Academy of Sciences (MTA) lacked the resources to renovate the properties used by research institutes, which were not owners but merely statutory users. As a result, the condition of these properties deteriorated over time. Establishing clear ownership - combined with the opportunities provided by increased funding - offers the chance to significantly improve the condition of these properties and, consequently, the working conditions.

Will the research institutions retain their current corporate shares and movable assets?

The restructuring does not affect either corporate holdings or movable assets. According to the draft law, movable assets available for the fulfillment of public duties and currently owned or managed by research institutes will, by the force of law, become the property of the derived legal entities with legal personality - namely, the research institutions.

Will the restructuring enable the renovation of HUN-REN’s poorly maintained properties?

The increased funding provides numerous opportunities, including allocating more resources for renovations.