This guidance is aimed at knowledge bases (host research organisations) applying to Innovate UK’s Knowledge Transfer Partnership (KTP) competition for full economic costing (FEC) projects. The FEC costing method is typically used by higher education institutions.
You must calculate the costs of your project in whole months.
You must not:
- charge the business partner any project costs that have not been included in your application
- reduce the costs to the business partner after KTP has approved the grant
Associate employment
From 26 January 2023, the maximum costs you can claim for employing the associate are £55,000 per 12 months. This includes costs for:
- associate salary
- national insurance
- sick pay
- annual leave
- pension
- redundancy
- pay rises
- retention, completion or other bonuses
Within the application you must explain the rationale for the budget requested. This must be based on evidence that the associate salary, and other costs, are appropriate for the industry or business in which the KTP will take place. Justifications relying solely on pay grades within the knowledge base or qualifications are not allowed.
If the business partner’s premises where most of the project work will be undertaken is within 16 miles of Charing Cross, London, you can include an extra London weighting of £3,000 per 12 months. This brings the total to £58,000 per 12 months.
Projects with virtual businesses cannot claim London weighting.
The knowledge base and business partner are responsible for any salary and additional employment costs that exceed these maximum amounts.
Maternity, paternity, adoption and parental leave
At the end of the grant period we will reimburse costs incurred by the knowledge base to cover any additional parental leave costs, including statutory maternity, paternity and adoption pay for staff.
Innovate UK’s contribution will be limited to the funding level (%) stated in the grant offer letter. The business partner is also expected to contribute towards these costs.
This aligns with section 8.3 of the UKRI full economic cost (FEC) grants standard terms and conditions.
Associate development
This supports the associate’s personal and professional development, providing:
- additional developmental training that is specifically required for the project
- training that helps the all-round development of the associate
The maximum associate development costs are £2,000 per 12 months. There are no exceptions to this maximum. The business partner is solely responsible for associate development costs that exceed this amount.
During the project the associate can use up to £700 of this on fees for a higher degree.
Travel and subsistence
For projects with virtual businesses, the business must pay all associate travel costs and include a budget for this in the ‘additional business costs estimates’ section of the application form.
For non-virtual businesses, travel and subsistence can be claimed for:
- the knowledge base supervisor and knowledge base lead to attend monthly project management meetings and Local Management Committee meetings
- associate travel in relation to the delivery of the project as listed in the workplan
The business must also list its own travel and subsistence in the ‘additional business cost estimates’ section of the application form.
The standard travel and subsistence amount is £1,250 per 12 months, you can exceed this amount. You must justify all travel and subsistence costs in the application.
The cost of standard class peak rail tickets may be used when preparing travel and subsistence budgets. Your request will be approved or rejected by the KTP programme management.
The travel and subsistence budget may also be used to support associate travel to training courses, conferences and trade shows approved by the Local Management Committee. Attendance fees must be met from the associate’s development budget or funded by the business partner. As a general guide no more than two conferences or trade shows will be supported per project and must be included in the work plan.
The business partner must fully support any costs over the standard amount, for visits to client sites, overseas partners, or more than two conferences or trade shows included in the workplan.
You must consider the environmental impact of your travel and be prepared to justify your choices. In order of preference, you should consider:
- walking and cycling
- public transport
- vehicles, including pool, hire and private cars
- taxis
- flying
Special arrangements for virtual businesses
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 and academic travel costs will be based on this.
Projects with virtual businesses may only claim for academic travel and substance. All associate travel will need to be paid for by the business partner. The business will need to include an allowance for associate travel within the ‘additional business costs estimate’ section on the application form.
If these figures are not included, it will be assumed that there is no budget available, and applications withdrawn from the competition.
Consumables (materials)
This only covers consumable items that are essential to carry out and complete the project. You can include the associate’s personal computer but not capital items that the business partner will use after the project is completed. Except for the personal computer, consumables are unlikely to exist or will be significantly transformed, after their use.
Items must not:
- have already been purchased
- have been included in other costs categories
- be purchased from the business partner
Standard consumable costs are £2,000 per 12 months. You can exceed this, but you must justify your request in the application form. Where high specification computers are required, the business must contribute to their cost. Your request will be approved or rejected by KTP programme management.
KTP 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 cloud computing and online data storage services or equipment that is likely be used by the business partner after the project has completed.
In your justification, make clear which stage of your work plan each cost relates to. We encourage the business partner to help with any costs over the standard amount.
Non-FEC knowledge bases may additionally include elements of estate costs in this category, where their use is directly related to the delivery of the proposed project. The same maximum applies as for FEC. It must be clear from the justification why these costs have been included and where they link to the workplan.
Other costs
These costs help develop and support KTP offices. If you want to claim for this, you must contact the KTP programme manager before you submit your application.
Knowledge base supervisor
This is the cost of the knowledge base employee 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.
In rare cases the partners may need the knowledge base supervisor to provide more support, but you must justify your request in the application form. Your request will be approved or rejected by the KTP programme management.
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
This includes the use of existing facilities and anything chargeable within the knowledge base.
Normally this will be zero as the associate is located at the business partner’s premises.
When using FEC, the knowledge base partner can request up to £10,000 extra for each project where the work plan demonstrates that the associate needs to spend significant time using the knowledge base’s facilities, including laboratory or office space. The associate is expected to spend the majority of their time in the business so extended periods of work within the knowledge base are discouraged.
This category includes the use of specialist facilities and equipment that are chargeable (often by the day or hour) within the knowledge base, such as wind tunnels or electron microscopy.
You must explain why this budget is needed and your request will be approved or rejected by the KTP programme management. There are no exceptions to this maximum.
We encourage the business partner to help with any costs over the standard amount.
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.
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) and must be satisfied that only these audited and approved costs are included in your project’s budget.
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 £80,000 (salary plus overheads) are multiplied by 0.1 giving the figure of £8,000.
Additional associate support
Additional associate support costs include indirect costs and the costs of providing the Local Management Committee secretariat. In the example below, £36,000 of costs have been calculated on the KTP FEC certificate and charged at 50% to the project (£18,000).
Example: Standard FEC costs for one associate for 12 months, located at the business's premises
In the following example, associate employment costs of £45,000 have been determined as appropriate for the type of business.
For associate employments costs and travel and subsistence costs, projects with virtual businesses may:
- not claim London weighting
- only claim for academic travel and subsistence
- not transfer travel and subsistence to another budget
| Eligible costs | Innovate UK grant at 67% | SME contribution at 33% | |
|---|---|---|---|
| Contribution to associate employment costs | £45,000 | £30,150 | £14,850 |
| Associate development | £2,000 | £1,340 | £660 |
| Travel and subsistence | £1,250 | £838 | £413 |
| Equipment, consumables, and other costs | £2,000 | £1,340 | £660 |
| Knowledge base supervisor | £8,000 | £5,360 | £2,640 |
| Estate costs | 0 | 0 | 0 |
| Additional associate support | £18,000 | £12,060 | £5,940 |
| Grant payable or business contribution in total | £51,088 | £25,163 |
| Eligible costs | Innovate UK grant at 50% | Large business contribution at 50% | |
|---|---|---|---|
| Contribution to associate employment costs | £45,000 | £22,500 | £22,500 |
| Associate development | £2,000 | £1,000 | £1,000 |
| Travel and subsistence | £1,250 | £625 | £625 |
| Equipment, consumables, and other costs | £2,000 | £1,000 | £1,000 |
| Knowledge base supervisor | £8,000 | £4,000 | £4,000 |
| Estate costs | 0 | 0 | 0 |
| Additional associate support | £18,000 | £9,000 | £9,000 |
| Grant payable or business contribution in total | £38,125 | £38,125 |