Cost categories for KTP FEC projects

  

Cost categories for KTP FEC projects

This guidance outlines the cost categories and rules applying to budget requests in Knowledge Transfer Partnership (KTP) projects.

 

Knowledge Transfer Partnerships use the Full Economic Costing (FEC) methodology for financial transparency.  Applicants must not assume that costs commonly claimed in research grants (for example estates, generic laboratory access or standard overheads) are automatically appropriate for KTP. All costs must be directly required to deliver the knowledge exchange activity described in the work plan.

All budget items requested in the application must comply with this guidance.

 ·       Costs can only be reimbursed once an Associate has started.  Costs incurred before the Associate starts are at the partner’s own risk

·       If competition budgets are exceeded, a portfolio approach can be taken to support a variety of sectors, business sizes, locations and project complexity.

·       All costs included in the budget should be clearly itemised within the application form, wherever the form provides the functionality to do so.

·       Although budgets are reviewed before a grant is offered, Innovate UK will not pay claims that fall outside the published cost guidance.

·       Costs must be calculated in whole months

 

Budgets per 12 months

Budget category	Budget	Can be exceeded?	Pro Rata?
Associate Employment (outside of London)	£60,000	With Business contribution	Yes
Associate employment (in London)	£63,000	With Business contribution	Yes
Associate Development	£2,500	With Business contribution	Yes
Travel & Subsistence	£2,000	With justification	No
Consumables	£3,000	With justification	No
Knowledge Base Supervisor	variable	Based on FEC	Yes
Estate Costs	£5,000 including £1,250 for specialist computing services	With Business contribution	Yes
Additional Associate support	variable	Based on FEC	Yes

 

Associate employment

The maximum eligible cost for employing an Associate is £60,000 per 12 months, or £63,000 where the project is based within 16 miles of Charing Cross, London. The Business may top up this budget where salary levels exceed this limit.

Projects with virtual Businesses cannot claim London weighting.

This includes costs for:

·       Associate salary

·       national insurance

·       sick pay

·       annual leave

·       pension

·       redundancy

·       pay rises

·       retention, completion or other bonuses

You must explain the rationale for the budget requested within your application.

Associate salary justifications must be benchmarked against the Business and wider industry context in which the Associate will operate. Academic qualifications may be relevant to the role but must not be the primary basis for the proposed salary. Evidence should demonstrate alignment with similar roles within the Business partner or typical reward levels within the relevant industry or sector. Partners may set salaries above the maximum where market conditions require but must cover all additional costs in full.

Justifications based solely on knowledge‑base pay grades or academic qualifications are not permitted. 

The minimum qualification level for an Associate is Level 4.

Maternity, paternity, adoption and parental leave

At the end of the grant period and based on the grant funding rate, Innovate UK will reimburse its share of the costs incurred by the Knowledge Base to cover any additional parental leave costs, including statutory maternity, paternity and adoption pay for staff.  The Business partner should also contribute towards these costs.

Associate development

£2,500 per Associate, per 12 months may be claimed to support relevant developmental training, including:

·       additional developmental training that is specifically required for the project, not available from either of the project partners

·       personal development that helps the all-round development of the Associate

·       attendance at 1 or more KTP Associate conferences (subject to availability)

·       participation in the Innovation Strategy course (subject to availability)

·       attendance fees for a maximum of 2 academic or business conferences and trade shows

During the project the Associate may use up to £700 of this budget on fees for a higher degree.

There are no exceptions to this amount. The Business partner is responsible for Associate development costs that cannot be met by this budget.

Travel and subsistence

£2,000 per Associate, per 12‑month period may be claimed to support travel and subsistence. Applicants may request funding in excess of this limit; however, a clear and robust justification for the total amount requested must be provided. This justification must demonstrate why the additional costs are necessary to deliver the project and align with the workplan. Details must be included in the “Do your project costs exceed the allowed limit?” section of the application form.

 

In all cases, the budget must be itemised

 

You must consider the environmental impact of your travel and be prepared to justify your choices. In order of preference, you should consider:

1.     walking and cycling

2.     public transport

3.     vehicles, including pool, hire and private cars

4.     taxis

5.     flying

The following costs must be used when preparing travel and subsistence budgets.

·       Standard class peak rail tickets

·       Economy class flights

·       Overnight stays in mid range hotels

·       Substance rates based on the Knowledge Base travel policy

·       Milage rates based on the Knowledge Base travel policy

·       Travel visas

The travel and subsistence budget may be used to support Associate travel to academic or Business conferences and trade shows which must be beneficial to the Associate’s development and included in the workplan.  Conference attendance fees must be met from the Associate development budget.

Any travel must be carefully considered and must demonstrate a direct link to the achievement of project outcomes.  Travel within the UK is permitted where it is essential to support the delivery of the KTP project, including its innovation and commercialisation activities.

In exceptional circumstances, in addition to overseas conference attendance, one overseas trip may be considered, but only where it is essential for knowledge transfer that cannot be achieved within the UK and where it clearly and directly supports delivery of the project objectives. 

Travel and subsistence can also be claimed for:

·       Associates attending the mandatory management training modules, using the designated meeting location as the point of origin and where the destination is known

·       Associates attending in person training and development using the designated meeting location as the point of origin and where the destination is known

·       Associate travel to a maximum of 2 academic or business conferences or trade shows using the designated meeting location as the point of origin.

·       Associate travel to KTP Associate conferences (in addition to business or academic conferences) using the designated meeting location as the point of origin.

·       Associate travel to the Knowledge Base to access services provided on site, for example the library or lab equipment as detailed in the work plan.

·       the Knowledge Base supervisor and Knowledge Base lead to attend monthly project management meetings and Local Management Committee meetings, based on travel from the Knowledge Base to the designated meeting location.

·       the Knowledge Base supervisor to attend the New Partners Workshop, Associate interviews and LMC 0, based on travel from the Knowledge Base to the designated meeting location.  These costs would not be reimbursed if an Associate did not start.

 

The meeting location will be stated in the application form.  With the exception of virtual Businesses, this is a business location.

Any costs beyond these limits must be fully met by the Business partner and included in the additional Business cost estimates section.

The Associate is required to attend monthly project management meetings and Local Management Committee (LMC) meetings in person.  As the Associate is expected to spend the majority of their time within the Business, costs for their attendance at these meetings cannot be included within this budget.  If costs are incurred, they must be met by the partners.

Budget request will be approved or rejected by the KTP programme management.

The Business must also list its own travel and subsistence in the ‘additional Business cost estimates’ section of the application form.

Special arrangements for virtual Businesses

KTP recognises the advantages of virtual working and the flexibility it offers businesses without a physical location.  However, travel budgets cannot be accurately planned because the location of the Associate is unknown. KTP therefore expects virtual businesses to anticipate higher costs to support the Associate deliver the project.

 

Where a virtual business wishes to participate in KTP, the Business must agree to cover the following additional requirements and costs:

·       Monthly project management meetings and Local Management Committees must be held face to face at a location of the Businesses choosing, and at their expense. These meetings must not be held at the Knowledge Base except in exceptional circumstances. The location of these meetings must be identified within the application.  This meeting location must be used to determine eligible travel costs for Academics and Associates. 

·       To meet health and safety obligations towards their staff, virtual business usually supplies directly or indirectly, home office equipment such as desks, chairs and other office equipment necessary to run a home office. Such policies should be extended to the KTP Associate and home working arrangements must be discussed and agreed with the Knowledge Base prior to the Associate starting work on the project.

 

Virtual Businesses must agree to meet these additional requirements and demonstrate their agreement by including allowances within the ‘additional Business cost estimates’ section of the application form.  Where estimates are missing or unclear in the additional Business cost estimates section, the application may be withdrawn.

Consumables

The standard allowance is £3,000 per project, per 12 months. Applicants may request funding in excess of this limit; however, a clear and robust justification for the total amount requested must be provided. This justification must demonstrate how the additional costs are necessary to deliver the project and align with the approved workplan. Details must be included in the “Do your project costs exceed the allowed limit?” section of the application form. We encourage the Business partner to help with any costs over the standard amount.

 

Consumables are unlikely to exist or will be significantly transformed, after their use.  With the exception of IT equipment detailed below, equipment of any kind is not eligible.

Any items that are part‑funded by the KTP that have not been significantly transformed by the end of the project, must be retained and returned to the Knowledge Base at end of the project.  Ownership of any item part funded through the KTP resides with the Knowledge Base partner.  Shared ownership is not permitted.

Consumables must not:

·       have already been purchased

·       have been included in other costs categories

·       be purchased from the Business partner

Within KTP, transcription services are considered a consumable.

Participation rewards do not meet the KTP definition of a consumable and are not supported.

Consumables (IT Equipment)

The maximum eligible cost for IT equipment is £3750 per Associate. Applicants may not request funding in excess of this amount, however, the Business may contribute to this budget where costs exceed this limit.

Specifications should be clearly stated and will usually align with the equipment the Knowledge Base provides for the majority of its staff.

A clear and robust justification for the specified computer must be provided in the “Do your project costs exceed the allowed limit?” section of the application form. If the Business is making an additional contribution to the costs, this must be included in the “additional Business cost estimates” section of the application form.

In some circumstances the Business may purchase the Associate’s personal computer, however, this must be done in accordance with the Knowledge Bases procurement policies.

In all cases it is expected that the computer is owned and managed by the Knowledge Base.  At the end of the project the Knowledge Base will retain ownership of the equipment.

Where standard peripherals (e.g. mice, keyboards, and monitors) are normally provided by the Knowledge Base as part of its standard equipment provision, these must not be charged separately to the project.  Only where such items are not provided as standard, and where the Business is unable to supply them, may the cost of basic peripherals be included.

The following items are not eligible for KTP support:

• Monitor risers, arms or wall mounts
• Monitors larger than 25 inches

Costs of all personal computers will be monitored and reviewed. Knowledge Bases may be asked to provide additional justification.

This budget does not support the costs of more than one personal computing device, commercial software licences, IT hardware including servers, physical storage units and tablet computers, mobile phones and contracts (unless specifically required for the safety of an Associate), commercial AI modules, commercial cloud computing and commercial online data storage services or any other equipment, software or service that is likely be used by the Business partner after the project has completed.

Other costs

Other costs, including those supporting KTP office functions, are only eligible with prior approval from the KTP Programme Manager. Applicants must request approval before submitting their application.

 

Knowledge Base supervisor

This is the cost of Knowledge Base employees who will give the Associate academic supervision in the partnership.

The Knowledge Base supervisor must spend a minimum of half a day a week supporting the project. Weekly supervision is usually provided virtually, with monthly face to face meetings mandatory.

In rare cases where the partners need the Knowledge Base supervisor to provide more support, you must justify your request in the application form.

We will not fund the supervision and support given to the Associate by the Business partner. These costs must be met by the Business partner.

Associate estates cost

£5,000 per Associate, per 12 months may be claimed to support access to specialised services and facilities within the Knowledge Base, when justified within the work plan.

Because of KTPs’ knowledge exchange focus, Associates are expected to spend the majority of their time within the Business rather than on Knowledge Base premises, therefore this budget will usually be zero.

Knowledge Bases may use this budget to cover essential charges for the use of their facilities or services essential to deliver defined tasks in the work plan and include the use of specialist chargeable facilities and equipment (for example, wind tunnels or electron microscopy) and access to cloud computing services, API licences and software subscriptions purchased through the Knowledge Base.  Eligible items should be charged at internal rates.

General access to offices, desk space or standard academic facilities are provided for within the additional Associate support budget.

Up to 25% of this budget may be allocated specifically to cloud computing services, tokens, API licences and software subscriptions not already included within the Knowledge Base’s basic provision under Additional Associate Support.

It is essential that the relevant authorities within the Knowledge Base are sighted on the use of these services, consequently they must be supplied and charged directly by the Knowledge Base usually via the IT department.  Where the IT department cannot supply these services, the Knowledge Base polices on procurement must be followed. 

Services purchased directly from commercial suppliers outside of procurement policies and frameworks, are not eligible.  Innovate UK will not support the cost of services that will be used by the Business partner.

It is essential that all project partners actively participate in decisions around the use of AI and collectively decide a position on its usage before the project commences.

You must explain why this budget is needed in the “Do your project costs exceed the allowed limit?” section on the application form. Your request will be approved or rejected by KTP programme management. There are no exceptions to the maximum budget.

There are no exceptions to this amount. The Business partner is responsible for any costs over the allowable budget.

You must explain why this budget is needed in the “Do your project costs exceed the allowed limit?” section on the application form. Your request will be approved or rejected by KTP programme management. There are no exceptions to the maximum budget.

We encourage the Business partner to help with any costs over the maximum budget.

Additional Associate support

These are the costs for managing the Associate, such as computing, personnel admin, learning resources and secretariat support to the Local Management Committee.  These must be based on audited institutional cost structures and included within the FEC certificate and charged at 50% of the institution's per capita FEC overhead.

Project costs for FEC

The principle behind FEC funding is that Knowledge Bases need to indicate the full economic cost of a project.

As a Knowledge Base using FEC, you’ll have a breakdown of your costs readily available because the UK government requires you to calculate them as part of the transparent approach to costing (TRAC). These costs will have been audited and approved.

Providing your FEC certificate for KTP

You must provide a current FEC certificate when you apply to a KTP competition. If your certificate is not valid on the day you submit your application, your application will be withdrawn.

Your certificate must:

▪ confirm that your proposed KTP finances only include costs that are authorised to be recovered and that have been audited

▪ list those costs in the certificate, with clear subheadings

▪ have the certificate signed by your finance manager or an appropriately authorised member of the finance staff

▪ confirm you will charge your Business partner in full for its contribution to any project expenditure, and that the sums charged match your application

▪ submit the certificate with every new application, as KTP does not keep a copy of your certificate

▪ make the information available to your KT adviser

The project assessors will be able to view your FEC certificate (also known as an FEC letter).

Your certificate will include these indirect costs:

▪ vice chancellor and pro vice chancellor’s office

▪ health and safety office

▪ internal audit

▪ registrar’s office

▪ legal costs

▪ library

▪ IT services

▪ development office

▪ human resources

▪ corporate communications

▪ strategic planning and change

▪ academic office (postgraduate research activity)

▪ international office (postgraduate research activity)

▪ research and economic development support services

▪ treasurer’s department

▪ interest payable

▪ treasury charges

▪ department indirect costs

▪ cost of capital adjustment

Estate costs will include these costs:

▪ buildings depreciation

▪ equipment depreciation

▪ insurance

▪ infrastructure adjustment

▪ utility costs

▪ building maintenance

▪ garden and grounds

▪ laboratory technicians

▪ departmental space costs,

▪ other chargeable costs for use of equipment or facilities

Calculating FEC-specific costs

Knowledge Base supervisor

Your Knowledge Base supervisors’ costs will vary depending on their current salary and the overheads levied by the Knowledge Base. KTP will support these costs for 0.1 full time equivalent (half a day per week). In the example below, the Knowledge Base supervisor costs of £140,000 (salary plus overheads) are multiplied by 0.1 giving the figure of £14,000.

Additional Associate support

Additional Associate support costs include indirect costs and the costs of providing the Local Management Committee secretariat. In the example below, £98,000 of costs have been calculated on the KTP FEC certificate and charged at 50% to the project (£49,000).

Example: Standard FEC costs for one Associate for 12 months, located at the Business's premises

In the following example, Associate employment costs (salary plus overheads) of £50,000 have been determined as appropriate for the type of Business.

 

Small and medium-sized Business (SME) project

	Budget requested for project	Innovate UK grant at 67%	SME contribution at 33%
Contribution to Associate employment costs	£50,000	£33,500	£16,500
Associate development	£2,500	£1,675	£825
Travel and subsistence	£1,750	£1,173	£578
Equipment, consumables, and other costs	£3,750	£2,513	£1,238
Knowledge Base supervisor	£14,000	£9,380	£4,620
Estate costs	0	£0	£0
Additional Associate support	£49,000	£32,830	£16,170
Grant payable or Business contribution in total	£121,000	£81,070	£39,930
Large Business project
	Budget requested for project costs	Innovate UK grant at 50%	Large Business contribution at 50%
Contribution to Associate employment costs	£50,000	£25,000	£25,000
Associate development	£2,500	£1,250	£1,250
Travel and subsistence	£1,750	£875	£875
Equipment, consumables, and other costs	£3,750	£1,875	£1,875
Knowledge Base supervisor	£14,000	£7,000	£7,000
Estate costs	0	£0	£0
Additional Associate support	£49,000	£24,500	£24,500
Grant payable or Business contribution in total	£121,000	£60,500	£60,500