Rule change will allow businesses to claim costs of working with universities
The Technology Strategy Board is cutting between 5 per cent and 10 per cent of its collaborative R&D grants so that more funding can be given to small and medium-sized companies.
The changes to its funding terms and conditions took effect on 1 September. They follow an earlier decision to remove the 50 per cent cap on the TSB contribution to collaborative projects between businesses and universities.
Under the old system, universities and other research organisations could claim 100 per cent of their costs. Businesses on the other hand were treated differently: the amounts they could claim were lower, and in some cases they were not eligible at all.
For example, if the total cost of a collaborative project was £100,000, the maximum TSB contribution would be £50,000. If the university partner’s costs were £50,000, the university could claim all of its costs, with the project’s business partner getting nothing.
David Bott, TSB’s director of innovation programmes, told Research Fortnight Today that the old system put off SMEs from engaging with the science base.
“We inherited a system under the state-aid exemptions”, says Bott. “The rules changed at the beginning of the year and we spent a long time consulting with … BIS to make sure it is legal.”
Under the new system, larger businesses will be allowed to claim 50 per cent of the costs in such applied research and SMEs can claim 60 per cent. Universities and research organisations will still be able to claim 100 per cent, meaning that the total number of grants will have to fall.
“We’re basically encouraging SMEs to work more with the research base because we think there’s real value of them doing that”, Bott adds. “We probably think there’s going to be between 5 per cent and 10 per cent fewer grants.”
Although the changes will make the process more competitive for universities and other research partners, Bott says there’s a long-term benefit for such partners in expanding their collaboration with SMEs.
“We don’t fund universities. The reason why some of our money goes to universities is because of the companies we work with”, says Bott. “I don’t think they’re going to have to work any harder: I think what they’re going to do is to have a whole new range of potential partners with the SMEs—that’s what we’re trying to do.”
The reduction of the number of grants does not worry Bott, who says the changes are mostly a matter of “raising the bar a little”. He is also optimistic that the TSB will see an increase in funding at some point.
“Some people worry about there being less projects but they’ll be better projects and better-resourced projects”, he says. “We couldn’t have left it the way it was.”
However, in some specific competitions specifically targeting transfer of knowledge from the research base to business, the required business element may be reduced to 50 per cent of the total project cost.