Notice

Grant Call: LaunchUK Technology Investment

Updated 30 September 2022

UPDATE: Due to problems accessing SharePoint, please email complete applications to spaceflight@ukspaceagency.gov.uk by the deadline provided in the call.

1. Background

The Launch UK Technology Investment Programme is the UK Space Agency’s (UK Space Agency) new fund established to support the development of technology within the UK’s launch supply chain.

The programme will provide grant funding to UK project teams to support the development of their technology, products, services and capabilities.

The UK Space Agency is now inviting applications from organisations, including industry and academia, that are interested in developing their technology, products, services or capabilities, related to launch.

We are looking to match-fund projects that are complete in this financial year, therefore for this call please restrict projects to those that will achieve significant milestones by the end of the 22/23 Financial Year (FY). We aim to release a longer/multiyear call the following FY.

Lead organisations will only be eligible to be awarded one grant directly.

The programme will be run in conjunction with existing UK Space Agency and ESA research and development (R&D) funds including the National Space Innovation Programme (NSIP) and ESA’s Commercial Space Transports Systems (CSTS).

The call aims to develop the capability of the UK spaceflight sector and research base by providing funding to support the whole supply chain, across all Technology Readiness Levels (TRL), helping to develop the whole of the UK’s spaceflight pipeline and position the UK to be competitive in this sector.

The objectives of the fund are to:

· Build on strengths in the UK launch supply chain

· Fill gaps in the launch supply chain

· Build resilience and expand the UK’s launch supply chain

· Fund innovative ideas

2. Call Purpose

Strategic Objectives

The government’s ambition is to be the leading commercial spaceflight provider in Europe by 2030. To achieve this, the UK’s spaceflight sector needs to bolster its offerings in terms of launch technology, services and innovation across the whole supply chain. We are providing UK organisations with the opportunity to bid for co-funding to help them develop.

Theme

The call is open to any theme within the launch sector, including:

· Technology development

· Capability development

· Service and product development

· Commercialisation of products

· Testing products/technologies

Proposals welcomed include:

· Establish a new innovative technology, product or service and/or new IP within the launch sector

· Developments in launch related technologies, products, services or capabilities

· Fundamental research

· Feasibility studies

Including projects that:

• May be high risk but have the potential for high returns

• Will deliver tangible TRL step changes

• Have collaboration between UK industry, UK academia and/or other UK research organisations

• Demonstrate clear benefits to the UK space sectors, such as jobs, supply chain development or skills development

• Offer high knowledge spill-over

• Offer high potential for global exports or products and/or services

• Offer advancement of new approaches in space science

Value of Funding available

The UK Space Agency grant amount per project will lie between £10,000 and £400,000 for project deliverables to be completed by March 2023 (FY 22/23). UK Space Agency reserves the right to also consider proposals that may be above the maximum amount stated.

Following the evaluation process, only the highest-ranking applications that sit within the Agency’s overarching funding and affordability envelope will be funded. All projects must complete their FY 22/23 milestones before the end of March 2023.

All projects must include match-funding from the applicant and project partners. The size of match-funding will differ depending on the size or type of organisation involved in the proposal. Further detail on the level of match-funding requires and the maximum UK Space Agency contribution can be found in Annex E

Financial checks will be undertaken, and all grant recipients are expected to demonstrate sound financial and programme management procedures.

Grant payments will be made following successful completion of applicable milestones and will be made to the Prime organisation only. Milestone completion criteria will be agreed, linked to each milestone deliverable, with evidence required to demonstrate that each milestone has been completed successfully and costs have been expended in accordance with the principles set out in this document.

Each project selected for grant funding will also be required to provide brief monthly updates on the project progress using a template provided by the UK Space Agency.

2.1 Timetable

The below table outlines the expected timetable for this call for grant funding. The call opened on the 24th of August 2022 and will close at 12 noon (BST) on the 2nd of October 2022. UK Space Agency aims to notify all bidders of the results of their bid during October/November 2022.

If the timeline changes, successful applicants will need to adjust their project milestones to reflect any schedule changes and finalise these before Grant Funding Agreements are signed.

· Funding call opens: 24 August 2022

· Deadline for submission of applicant questions: 10 September 2022

· Deadline for submission of proposals: 2 October 2022

· Notification of outcomes: October/November 2022

· Due diligence on down-selected proposals: October/November 2022

· Grants to be signed by: End of November 2022

All projects must be complete before the end of 31 March 2023.

Projects that do not complete their FY 22/23 project milestones may not be eligible to participate in the fund.

Any questions about this funding opportunity should be submitted to the following email address spaceflight@ukspaceagency.gov.uk, with the subject line “Launch UK Technology Investment Grant Call Questions”. Questions submitted to any other UK Space Agency email address will not be considered. The final deadline for any questions is 10 September 2022 to enable all potential applicants to consider answers provided. A live Q&A log will be maintained and hosted on the UK Space Agency web page alongside the call documentation.

2.2 Documents

Documents relevant for this funding opportunity:

Annex	Title	Description
A-1	Application Form*
A-2	Application Form Guidance
B	Budget Template*	Guidance in “Instructions” tab of template
C-1 C-2	1. North Star Metric Reporting Guidance2. Catalysing Investment Form*	Guidance on North Star Reporting requirementsSupplement to Q.8(b) in Application Form
D-1D-2	1. UK Space Agency Overhead Guidance & Policy2. UK Space Agency Overhead Template	Please read updated 2022 Overheads policyMandatory completion if requesting >20% Overhead
E	UK Space Agency Subsidy Control Guidance	Also see section 2.4
F	Evaluation Criteria	Note different weightings for this Phase
G-1 G-2 G-3 G-4	1. Grant Funding Agreement (<£100k)2. Grant Funding Agreement (£100k-£250k)3. Grant Funding Agreement (>£250k)4. Grant Offer Letter	Template GFA’sTemplate GOL
H	Milestone reporting Template	Milestone reporting requirement
I	Grant Applicant Checklist	A checklist to support the completion of the application
	FAQs	(to be circulated as required)

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2.3 North Star Metric

This section explains UK Space Agency’s North Star Metric in Measuring Investment Impacts.

The Agency works to ensure that our investment in space brings about real benefit to the UK and its people. Our principal metric by which the UK Space Agency measures its success is the level of total investment and contract revenue we help to bring into the UK space sector.

Consistent monitoring and evaluation of our programmes is important so that we understand how well we are delivering the UK Space Agency’s objectives. This in turn helps us to ensure we are delivering the National Space Strategy, and informs how we prioritise our resources, select the projects we invest in, and make the case for future public spending on space.

UK Space Agency grant recipients are required to report on how the grant funding has led to investment and contract revenue as a condition of funding. Please refer to Annex 12 in the Grant Funding Agreement’s (Annex G1,2,3) and The North Star Metric Reporting Guidance (Annex C-1).

Data to be collected 

Reporting will primarily involve four key elements: 

· Total income 

· Total Internal Investment 

· Total Private Investment 

· Additional detail on funding sources as appropriate 

· Any Additional Benefits you wish to Report 

More detailed definitions can be found in the table below: 

Term	Definition
Private Investment	Money invested by companies, individuals, or financial organisations through the following vehicles: equity, grant, prize, debt or alternative finance sources – excluding funding provided by UK Space Agency directly or via the European Space Agency. The source of the investment can be either foreign or domestic.
Internal Investment	Investment within a company, or from a parent company to its subsidiary, to cover R&D, capital expenditures and other non-capital expenditures such development of intellectual property.
Total Income	Additional Income generated from creation of goods and services, as a result of the specified grant. In the longer term this may also include income generated from royalties and licenses.

  

Data collection  

This information will be collected via a simple table below. Please note that data will not be shared with other companies and that it will be held securely in an anonymised form so that you cannot be directly identified. 

Grant number	Delivery priority (to be filled out by UK Space Agency programme manager)	Quarter	Total funding value (£)	Amount of match funding provided as a condition of UK Space Agency funding (total value £)	Additional revenue generated from goods and services as a result of UK Space Agency support (total value £)	Private investment generated as a result of UK Space Agency support  (total value £)	Source of Additional Investment: Foreign/Domestic	Internal Investment of funds made as a result of UK Space Agency support (total value £)	Additional jobs created as a result of funding received.

  

Data should only be reported where it could be reasonably stated that the revenue and/or investment in question would not have occurred without UK Space Agency’s funding. Where the revenue and/or investment may have only been partially realised in the absence of UK Space Agency’s funding, best efforts should be made to estimate the proportion of contract revenue and/or investment which can have been said to have occurred as a result. 

• To be reported on a quarterly basis from the start of the activity covered by this agreement. 
• Data will be required for at least 5 years after the completion of the activity covered by this agreement. 
• Where the length of benefit realisation would be longer than 5 years, the UK Space Agency may require an extended reporting period. This is to ensure that we are capturing the full benefits of an activity that has a long time period before those benefits are realised. Where this is the case the UK Space Agency will agree with grant recipients beforehand at the time at which a further request for information is sensible.  
• Any additional benefits that have resulted from UK Space Agency’s funding can also be reported through open text response 

The information you provide will only be used by the UK Space Agency and not shared with any other parties. Aggregate information may be presented more widely but this will be fully anonymised and not be attributable to any individual organisation. 

In addition, this information is being used to assess the agencies impact on the space sector and is not intended to be used as a way to evaluate how the grant is being run. not the individual performance of grants.

Please confirm the name and contact details of the person in your organisation who will be responsible for providing this information. 

If you have any specific questions on this requirement, please contact the UK Space Agency programme manager or named UK Space Agency contact. 

2.4 Subsidy Control

1. The UK Space Agency (UK Space Agency) supports organisations to invest in research, development and innovation. The support we provide is consistent with the UK’s international obligations and commitments to Subsidy Control (see further information at Annex E).

2. Before awarding subsidies, the UK Space Agency must ensure that the subsidy scheme meets the terms of the principles as determined in the UK-EU Trade & Cooperation Agreement[2] (TCA):

The principles are that:

· subsidies should pursue a specific public policy objective to remedy an identified market failure or to address an equity rationale such as social difficulties or distributional concerns (“the objective”)

· subsidies should be proportionate and limited to what is necessary to achieve the objective

· subsidies should be designed to bring about a change of economic behaviour of the beneficiary that is conducive to achieving the objective and that would not be achieved in the absence of subsidies being provided

· subsidies should not normally compensate for the costs the beneficiary would have funded in the absence of any subsidy

· subsidies should be an appropriate policy instrument to achieve a public policy objective and that objective cannot be achieved through other less distortive means

· subsidies’ positive contributions to achieving the objective should outweigh any negative effects, in particular the negative effects on trade or investment between the Parties

1. To ensure this competition provides funding in line with the UK’s obligations and commitments to Subsidy Control:

The intervention rates detailed in Annex E shall apply unless:

a) the bidder seeks to claim exemption from having to make a contribution under the Small Amounts of Financial Assistance Allowance (previously known as de-minimis under State Aid) rules.

b) the bidder is a research or public sector organisation or charity:

When referring to research organisations, UK Space Agency uses the definition from the Framework for state aid for research and development and innovation which states: 

“‘research and knowledge dissemination organisation’ or ‘research organisation’ means an entity (such as universities or research institutes, technology transfer agencies, innovation intermediaries, research-oriented physical or virtual collaborative entities), irrespective of its legal status (organised under public or private law) or way of financing, whose primary goal is to independently conduct fundamental research, industrial research or experimental development or to widely disseminate the results of such activities by way of teaching, publication or knowledge transfer. Where such entity also pursues economic activities, the financing, the costs and the revenues of those economic activities must be accounted for separately. Undertakings that can exert a decisive influence upon such an entity, for example in the quality of shareholders or members, may not enjoy a preferential access to the results generated by it.” 

Within UK Space Agency, this means: 

§ universities – higher education institutions 

§ non-profit research and technology organisations (RTOs), including catapults 

§ public sector organisations (PSOs) 

§ public sector research establishments (PSREs) 

§ research council institutes 

§ research organisations (ROs) 

§ charities. 

This list is not comprehensive and is subject to change and exceptions.

Research organisations undertaking non-economic activity will be funded as follows: 

§ universities: 80% of full economic costs

§ all other research organisations: 100% of eligible costs. 

Research organisations should be non-profit distributing to qualify. They should explain how they will disseminate the output of their project research as outlined in the application. 

Research organisations which are engaged in economic activity as part of the project will be treated as business enterprises for the purposes of funding

Public sector organisation or charity 

Public sector organisations and charities can work with businesses to achieve innovation through knowledge, skills and resources. These organisations must not take part in any economic activity or gain economic benefit from a project. They can apply for 100% of funding for their eligible costs under the following conditions: 

· they are undertaking research (this may be experimental, theoretical or critical investigation work to gain knowledge, skills or understanding vital to the project) 

· they meet requirements for dissemination of their project results and they state in the application how they will do this 

· they include their eligible costs for research purposes in the total research organisation involvement 

· they make sure they are not applying for funding towards costs which are already being paid by the public purse such as labour and overheads. 

Third sector 

Third sector organisations are primarily voluntary and community, such as associations, self-help groups, mutuals and cooperatives. Third sector organisations can be non-funding partners in a project. 

Bidders must identify the work proposed, and this must be consistent with the work programme described in the technical case. Note that the company size defines the maximum ‘Intervention’ rate (and hence the minimum required PV level) that is permitted (see Annex E). Bidders will be expected to justify the category of work selected.

1. Bidders must ensure that they supply the correct information that allows UK Space Agency to award grants within the scheme. It is the responsibility of the grant funder to ensure compliance with the relevant Subsidy Controls rules and the bidder to assist the funder in doing this by acting within the terms and conditions of the scheme. Further guidance about subsidy control is available on the gov.uk website:

https://www.gov.uk/government/publications/complying-with-the-uks-international-obligations-on-subsidy-control-guidance-for-public-authorities

3. Mandatory requirements

3.1 Proposal submission requirements

All applicants must note the following mandatory requirements:

· Complete and submit Annexes A-1, B and C-2, plus D-2 (if applicable) and any supporting documents detailed below, by noon the submission date.

· Proposals must demonstrate a high probability of successfully meeting the aims of the opportunity.

· The projects must be led by a UK organisation.

· Proposals must be within the theme of spaceflight - any other proposals will not be considered within this funding call.

· Proposals must demonstrate that the investment sought from the UK Government represents clear value for the UK public, through measurable benefits for the UK economy, and bring in additional value through catalysing investment.

· All projects will need to demonstrate that they have an effective structure in place for managing the administration of the grant requested and demonstrate that they have a sound approach to planning to achieve their programme aims on time and within budget.

· Where there is change in project leadership i.e. a new project Lead/prime, this must be communicated to UK Space Agency at least six weeks before the submission date supported with written agreements from the project consortium and the previous Lead organisation.

· Partner organisations within a project may be amended to reflect changes in the project’s next phase. Where there are new partners, the project Lead is responsible for ensuring they have a full understanding of the grant conditions and financial eligibility.

· As part of the application for funding, applicants must review and accept the terms of the UK Space Agency’s published Grant Funding Agreement (GFA).

· During the down selection process, projects may be asked for further evidence and clarification questions on request – final reports, additional questions on technical, financial and management plans.

3.2 Organisation eligibility

There are a series of requirements for eligibility to receive grant funding:

· All applicants must provide brief and relevant company or organisation background information, including areas of expertise and CVs for key personnel.

· Grant Recipients must demonstrate the ability to effectively manage a project and learn from lessons from previous phases to improve on previous processes.

· Grant Recipients must have a UK bank account and all grant payments will be made in UK sterling (as per Grant Funding Agreement).

· All project members must have in place and provide evidence of appropriate anti-bribery and anticorruption policies.

· All project members must provide evidence of a process for declaring and managing conflicts of interest.

· All project members must be able to provide evidence that they are GDPR compliant

· Projects cannot work in areas that are in active conflict and any travel to overseas must comply with FCDO recommendations.

· Projects must pass due diligence checks on company viability (financial standing assessment, governance, conflicts of interest, technical expertise)

· Formal teaming, or equivalent agreements between project partners must be in place within 30 days of grant signature.

· Projects must comply with the rules stated in this guidance document both during the pre-award and post-award delivery period.

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3.3 Exclusion Criteria

The UK Space Agency reserves the right in its absolute discretion to:

· Waive or change the requirements, including the timetable, from time to time through a formal amendment, initiated by the Agency;

· Seek clarification in respect of a participant’s proposal;

· Disqualify any participant that does not submit a compliant proposal in accordance with the instructions;

· Disqualify any applicant that is guilty of misrepresentation in relation to its proposal or the proposal process;

· Withdraw this competition at any time;

· Disqualify applicants where support may pose a threat to national security;

· Choose not to support any proposal as a result of the proposal review process and the findings of due diligence (including sound financial management).

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3.4 Grant Funding Agreement

The Grant Funding Agreement (GFA) template is included (Annex G-1, G-2, G-3 and G4). Applicants must sign up to the terms as set out in the grant funding agreement.

No material changes to the terms will be considered. Minor changes may be considered if an applicant can demonstrate that agreeing to the provision within the Grant Funding Agreement would result in the applicant breaching its statutory or regulatory obligations. Grant applicants wishing to propose changes should not make changes directly to templates but engage with the call lead - via the Spaceflight email address - and advice will be provided.

UK Space Agency require that all partners in a Consortia application have signed a Collaboration Agreement (CA) within 30 days of grant commencement date. The CA should as a minimum reference the terms of the Grant Offer Letter and GFA, specify the work division, intellectual property arrangements and a dispute rectification process. UK Space Agency will, in event of a dispute between partners, expect for the dispute to be resolved within the terms of the CA.

A draft Grant Offer Letter (GOL) has also been included (Annex G-4) to demonstrate the terms that successful applicants will be required to sign up to. This should be reviewed by Applicants. Inclusion of the Draft Offer Letter does not constitute any offer of work or payment by UK Space Agency at this stage and is provided for information purposes only.

3.5 Grant Recipient Code of Conduct

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All organisations in receipt of grant funding must abide by the UK government Code of Conduct for Grant Recipients:

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/754555/2018-11-06_Code_of_Conduct_for_Grant_Recipients.pdf

4. Assessment of Applications

Applications that meet the mandatory criteria above will be assessed by an independent advisory panel. This panel will consist of independent UK Space Agency reviews drawn from academia, industry or government.

Proposals will be assessed against a range of criteria, with criteria weighted to reflect their relative importance to the final score. A detailed copy of the scoring system and weighting can be found in Annex F. The criteria to be assessed will include:

· Competitiveness/Relevance

· Technical Feasibility

· Innovation

· Benefit to the UK and investment that will be catalysed

· Management and planning

Assessors will provide scores for each question in the application. All applications are assessed on individual merit. The UK Space agency will make the final decision regarding funding, using the panel’s recommendations and wider relevant legal, policy and financial considerations. The UK Space Agency will also take into account the available budget across the funding period, the value of money of the proposal, and the requested amounts of funding for each project in the subsequent financial years. The UK Space Agency will also be seeking to establish a balanced portfolio of projects across the space sector.

To aid our consideration, Annex F provides guidance for evaluation criteria for proposals and sets out the minimum information that all submissions must include.

4.1 Application Guidance

These Guidance Notes complement the grant competition document and are designed to assist your completion of the Application Form (Annex A-1). Please note:

1. The application template has been provided. No adjustments to the formatting, size, or other parameters are permitted;

2. All sections of the Application Form are mandatory, including Section 7 on benefit to UK and catalysing investment and completion of North Star metric form (Annex C-2);

3. Should any part of the application overrun the specified page or word limit, we will only consider material up to the designated page limit that is in the correct format;

4. All applications forms must be completed in Arial font, size 11, and submitted electronically as an A4 single document, in line with the template.

The application process:

Please note the following information regarding this grant competition:

1. We strongly advise that the Grant Applicant Checklist at Annex I are read prior to submission;

2. Upon receipt of an application, you will be issued with a receipt note within 24 hours of the application deadline. If you do not receive this, please contact the spaceflight team;

3. Only use acronyms where a term is mentioned frequently throughout the proposal. If you do choose to use an acronym, do not assume that the reader knows what it means, and be sure to define it, bearing in mind that individual sections of the application may be read separately during the selection process;

4.2 Project Milestones/Deliverable Plan

Bidders must set out payment plans noting that:

· payments will be made in arrears on acceptance of progress reports, deliverables and final reporting. Payment to be made once costs have been incurred.

· should actual costs incurred be greater than the value of the milestone value, these costs will be borne by the Grant Recipient, unless the additional expenditure has been agreed with the UK Space Agency ahead of the costs being incurred and a Grant Change Notice (GCN) executed.

· payment of the grant will be made in the form of staged payments together with a final payment on successful completion of the project. To reduce administrative burden please ensure a proportionate number of milestone linked payments.

· the first milestone should reflect a significant stage in the project and cannot be made on completion of the kick-off meeting (T+0) as this is not eligible for a milestone payment value.

· payment plans must be constructed to include and reflect major project stages and intermediate deliverables.

· The work package structure should be outlined and clearly linked to the relevant milestone/deliverables, e.g. through a GANNT chart or an equivalent project plan. Critical paths and dependencies should be outlined where possible.

The milestone and work package plan will be captured using information in the Budget template (Annex B) and the Application form (Annex A-1) such as GANNT charts and further schedule details.

4.3 Evaluation Criteria

After the deadline for application submission, valid applications will be sent for assessment.

Only applications that meet the following mandatory eligibility criteria and scope of the call will be sent for assessment:

· Application documentation complete and received in the allocated SharePoint folder or pre agreed alternative, before the deadline for submission of project proposals;

· Application signed and all mandatory check boxes completed;

· Alignment with the aims of the ‘Purpose’ of this call for project proposals;

· Alignment with the Subsidy rules as outlined in Annex E;

· Alignment with page counts and information requested in the Application Form as detailed in Annex A;

· Proposal made by a UK single lead organisation, acting alone or as the Prime (the lead) of a project collaboration

· Evidence of the requirements as set out in this call document have been met;

· Acceptance of the terms and conditions of UK Space Agency’s published grant agreement (Annex G).

The UK Space Agency reserves the right to declare a project proposal as out of scope or incomplete.

4.4 Reporting/Meeting Requirements

Following an award and completion of grant agreement formalities, projects will be expected to start as soon as possible, and no later than 3 weeks after grant signature. The UK Space Agency will assign a Project Coordinator to oversee the projects with the following methodology:

· The project coordinator will initiate each project normally by teleconference via a kick-off meeting which should be accompanied by a short presentation on the project by the project team.

· The grant recipient will provide short progress reports to the coordinator, and the schedule for these will be agreed at the project kick-off meeting and are normally at 4 or 6 weeks. A template will be made available at kick off.

· The grant recipient will schedule a mid-term progress meeting, as well as any with the Project Coordinator. Projects should include other technical review points (e.g. Preliminary /Critical Design

· Reviews) to enable planning and obtaining of relevant expert input.

· The grant recipient will provide milestone/deliverables within the proposal using the template provided in Annex H.

· The grant recipient will provide reporting on the progress of the project to evidence the milestone/deliverable has been met. On acceptance from the Project Coordinator of the evidenced milestone/deliverable and supporting financial evidence, the grant recipient will be invited to provide an invoice detailing the spend against each budgetary category for that milestone/deliverable.

· At the end of the project an IPR free final report and an executive summary are to be provided to the UK Space Agency. The executive summary must not contain any confidential information, as this may be uploaded onto the UK Space Agency website. All other reports should be marked commercial in confidence where applicable.

4.5 Monitoring and Evaluation

Monitoring and evaluation surveys will be periodically released by UK Space Agency and projects will be expected to respond. This may include a requirement to respond following the close of the grant funded period.

As stated in Section 2.3 and Annex C-1, there will be an ongoing requirement as part of the Grant Funding Agreement (Annex 12 in GFA) to report the realisation of North Star metrics and secured investment.

4.6 Confidentiality

The procedure for handling and assessing the bids and notifications will be as follows:

· All proposals and notifications will be held in confidence by UK Space Agency, except to be shared with evaluation panellists.

· Information relating to the proposals may also be shared with other UK government departments, agencies and arm’s length bodies.

· Summary information on all successful proposals who receive grant funding will be made public, including the summary of the proposal (from Section 4 of the Application Form), the amount of grant funding awarded and the identities of organisations involved.

· For those bids not recommended by for funding, documentation will be retained by the UK Space

· Agency for reference. The proposals will not be visible to any others, and the names of any unsuccessful bidders will not be published.

· All other documentation relating to bids selected for funding will remain confidential within the UK government.

Information submitted as part of a proposal, or subsequent commercially sensitive information submitted as part of the grant agreement, will not be disclosed by us save for in so far as we consider necessary, in our absolute discretion, to comply with our legal obligations under the Freedom of Information Act 2000, Environmental Information Regulations 2004 or any other legal act, requirement or obligation. Where permitted by law, we will attempt to notify you of any such disclosure.

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5. Finance Policies

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5.1 Cost Recovery

The funds from Grant funding are on a cost recovery basis only. Grants are solely intended to cover the cost of delivering the agreed activity or goal. Any surplus funds not spent will be lost to the project unless there are alternative arrangements agreed.

Grantees cannot receive any funding from other grants/contracts to undertake the same activities.

Grant funding cannot be rolled over between financial years without explicit consent from UK Space Agency.

All partners must use a separate, project-specific, bank account or project accounting code for project funds to enable a clear audit trail.

Invoicing

UK Space Agency will only pay on actuals therefore we expect invoices may differ from forecasts. Should actual costs incurred be greater than the value of the milestone value, these costs will be borne by the Grant Recipient, unless the additional expenditure has been agreed with the UK Space Agency ahead of the costs being incurred and a Grant Change Notice (GCN) executed.

Staff Costs

Staff costs must be calculated on a cost recovery basis only and broken down by pay costs and overheads separately.

Pay costs

Pay costs are calculated based on your PAYE records. They should include gross salary, employer National Insurance (NI) contributions and employer pension contributions. Pay costs must not include:

· Any profit margins

· Commercial charge-out rates

· Allowances for bonuses and benefits in kind

· Business development

· Travel and Subsistence

These pay rates will be subject to checks during the negotiation stage by internal or external teams to ensure that day rates reflect actual costs. High payroll costs will be challenged and evidence (such as pay slips, etc.) must be provided to justify that the rate is on a cost recovery basis only.

When making grant claims against labour costs, actual costs claimed must be supported with timesheets of those individuals who have worked on the project.

In the budget breakdown, you are asked to provide a pay cost per day. Using actual gross monthly payroll costs, please assume 260 working days in the year, less annual leave and public holiday entitlements.

5.2 Overheads

Full overhead recovery or full absorption costing is not eligible.

We understand that organisations calculate overheads in different ways.

This section offers 3 options for overhead costs:

1. No overheads. You can select this option if you are not incurring or claiming grant for your overheads

2. The 20% of labour costs option allows you to claim 20% of your labour costs as overhead. This includes both direct and indirect overhead. Selecting this option allows us to review a successful grant application much faster as no further documentation is needed from you.

3. The calculate overheads option asks you to complete calculations for claiming direct and indirect overheads. Any value claimed under this method will need to be reviewed by our project finance team if your application is successful. This is so we can assess the appropriateness of the overhead value you are claiming.

4. Where an organisation qualifies and applies for Full Economic Cost (FEC) recovery, your application should be supported by the latest signed off Transparent Approach to Costing (TRAC) return or equivalent financials to support the requested amount. Academic partners will be funded in all cases at 80% of FEC.

Please note that once the overhead is calculated and approved it cannot be exceeded at any time throughout the project life.

For option 3 you must complete the overhead calculation spreadsheet and return with your grant submission.

For option 3 you must complete the overhead calculation spreadsheet and return with your grant submission. Full guidance and the spreadsheet are provided in Annexes D-1 and D-2.

Indirect (administration) overhead

Selecting the indirect (administration) overheads link will take you to a template you’ll need to complete to calculate these costs.

We class indirect overheads as those costs associated with back office functions (such as finance, HR, administration staff) whose primary function is to support the running of a business enterprise. Typically these costs are not directly related to a particular product or service production.

Indirect overhead costs are eligible for inclusion if they are incurred directly as a result of undertaking the project. They must be additional, which means over and above your business as usual costs. Requests for higher then 20% overheads that cannot clearly demonstrate the additional resource specifically due to the grant being undertaken will be rejected.

Where you have already identified specific ‘indirect’ individuals working directly on the project, these should have been captured in the labour costs (section) together with their attributable overhead.

We have provided cost categories in the template. The table below provides our definition for each category.

Cost category	Definition
Board and senior management	The proportion of salary costs (including employer’s NI) of the board and senior management of the company. This should be where they are engaged in strategic or administrative tasks. Do not include those working directly on the project or who are customer facing or operational.
Administrative staff	The salary costs (including employer’s NI) of main administrative staff, such as receptionists and central administration. Do not include administrative staff employed to support sales, marketing, account management and profit generating departments.
Human resources staff	The salary costs (including employer’s NI) of human resource staff.
Employed estates staff	The salary costs (including employer’s NI) of employed cleaning, maintenance, security and other estates staff.
Finance department staff	The salary costs (including employer’s NI) of main finance department staff, such as payroll, accounts payable and receivable. Do not include staff employed to support sales, marketing or account management activities.
Administrative support temporary/agency staff costs	This should include fees paid for the provision of temporary staff in administration or support services as listed above. Do not include any staff that are operational, such as marketing, sales, engineering, quality assurance, research and development and supply chain.
General office IT services	Include general IT services used across the whole organisation. Do not include IT costs where they relate purely to non-eligible staff or manufacturing, production or fee earning activities.
General postage	Include postage and courier expenses for general administration needs. Do not include product delivery or any postage costs incurred through promotion, sales, marketing customer relationship or accounts management.
Office supplies, printing and stationery costs	General office stationery and supplies such as paper, business cards, corporate stationery, office equipment for support/admin staff listed above. Do not include specific costs associated with sales, marketing, product delivery, product literature or reports.
Security and safety costs	Include costs associated with site and staff safety and security including signage and health and safety costs.
Building maintenance: administration office facilities only	Include general repair and maintenance costs of administration facilities. Do not include repair and maintenance of manufacturing/production facilities and exceptional items such as new works or extensions which are not eligible for inclusion in this section.
Building rental: administration office facilities only	Where office space is leased include the rental costs. Do not include rental costs relating to manufacturing/production facilities and the cost of any deposits or penalties.
Contracted site services: administration office facilities only	Costs of contracted services relating to administration facilities such as cleaning of offices. Do not include contracted service costs related to manufacturing/production facilities.
Site property taxes: administration offices facilities only	Property taxes and charges relating to office space. Do not include manufacturing/production facility property taxes and charges.
Utilities: administration office facilities only	Electricity, gas, water, waste disposal, telecoms costs relating to administration office facilities.

The following is a step-by-step guide to help you fill in the relevant details to make your costs claim for indirect overhead.

Column A

Starting with your latest set of audited accounts please input your details against the relevant cost category in column A. If you are a new company or this information is unavailable, please use internal management accounts or forecast data.

Note that for the administration support staff costs section, the costs included here must be based upon PAYE (gross salary, NI, company pension contribution, life insurance). They should exclude discretionary package costs such as bonuses, awards, PRP and dividends. In addition please exclude any members working directly on the project who are customer facing or those engaged in operational/production areas.

Column B

In this column you should detail the proportion of the costs outlined in column A that represent core administration activity. You should follow the definitions and eligibility criteria outlined in the cost categories table above. You can use a percentage.

Column C

In column C please state what percentage of these costs you would assess as being additional and directly attributable administration activity to the project you are undertaking. By additional we mean over and above business as usual and specific to the Grant.

Column D

Based upon the details you’ve given in the previous columns, column D will automatically calculate the costs you’ve stated as being attributable to this project.

Column E

In column E you will need to provide some description of the cost constituents.

Once you have filled in this data you will see a percentage calculation (column F). This calculates what you consider as being eligible indirect overhead costs for your project (D) as a proportion of the annual audited figures (A). To save you time we use this calculated percentage and apply it to the remainder cost categories you have completed.

Any administration costs that are ineligible in this section but which directly relate to the project (for example based on invoices), should be claimed as direct costs within other sections of the finance form.

Completion of the indirect overheads template will calculate an annual total which will be proportioned for the length of time you are working on the project. You will see a per annum, per month and a per project cost. The per project costs will form your total indirect overheads as a monetary value.

Once you have filled out your indirect overheads information choose the ‘return to the overheads section’ to take you back to the main overheads section. Here you will see a summary of your indirect overhead.

Direct overhead

Selecting the direct overheads link will take you to a template you’ll need to complete to calculate these costs.

We understand that in undertaking a project you may incur associated costs with those staff working directly on the project. We refer to these as direct overheads. Typical costs in this area could include direct staff provision of laptops (non-capital only), desks, office (such as occupancy, facilities and utilities) and IT infrastructure and systems. This section is provided in free format for you to list out such costs.

Direct overhead costs must be directly attributable to the project you are undertaking and should not represent a full recovery methodology inclusive of redundant, spare capacity time or cost.

You should detail the costs and include a description of each item together with the methodology or basis of apportionment used. This should include the calculations that support the claimable costs. This will help us to validate these costs if your project is successful. If your costs have been subject to an independent audit verification we may ask you to provide this report to support our financial eligibility reviews.

Please note that costs associated with laboratories or workshops should be included within the other costs section of the application form.

Once you have completed the direct overhead you should select ‘return to the overheads section’. You will return to the main overhead section where you will see a summary of your overhead claim for both direct and indirect overheads.

5.3 VAT Rules

Grant funding is outside the scope of VAT so you cannot charge output VAT on top of your submitted costs. If you incur non-recoverable input VAT costs, you cannot pass this on to UK Space Agency.

5.4 Travel and Subsistence

The following outlines the guidelines for travel and subsistence costs. Value for money must always be considered. If for any reason the set limits cannot be adhered to (e.g. to accommodate a reasonable adjustment), you must seek prior written approval from UK Space Agency. No claims for alcohol will be accepted.

UK Space Agency reserves the right to not settle claims which have breached these guidelines. All expenditure must be supported by actual, itemised receipts.

Limits:

· Accommodation: £140 per night

· Breakfast: £5

· Lunch: £5

· Dinner: £15

Travel:

· All travel claimed must be using Economy rates.

· Tolls, Ferry Costs, Parking and congestion charge: Receipted costs for ferries, and tolls bridges and roads unavoidably incurred during your business journey may be claimed. Reasonable parking charges may be claimed. Receipted congestion charges unavoidably incurred on your business journey may be claimed.

5.5 Ineligible Expenditure

The following costs are ineligible:

· Payment that supports for lobbying or activity intended to influence or attempt to influence Parliament, Government or political parties, or attempting to influence the awarding or renewal of contracts and grants, or attempting to influence legislative or regulatory action;

· Using grant funding to petition for additional funding;

· Input VAT reclaimable by the Grant Recipient from HMRC;

· Payments for activities of a political or exclusively religious nature;

· Goods or services that the Grant Recipient has a statutory duty to provide;

· Payments reimbursed or to be reimbursed by other public or private sector grants

· Contributions in kind (i.e. a contribution in goods or services, as opposed to money);

· Depreciation, amortisation or impairment of fixed assets owned by the Grant Recipient;

· The acquisition or improvement of fixed assets by the Grant Recipient (unless the grant is explicitly for capital use – this will be stipulated in the Grant Offer Letter);

· Interest payments (including service charge payments for finance leases);

· Gifts to individuals;

· Entertaining (entertaining for this purpose means anything that would be a taxable benefit to the person being entertained, according to current UK tax regulations);

· Statutory fines, criminal fines or penalties; or liabilities incurred before the issue of this funding agreement unless agreed in writing by UK Space Agency;

· Employee paid benefits and bonuses;

· Alcohol.

6. Due Diligence

UK Space Agency will carry out due diligence on grant applications as required using internal and, where necessary, external subject matter experts. The scope and degree of due diligence will be determined by the value, nature and complexity of the grant scheme. All applications will be subject to basic checks such as credit reports and Companies House checks.

6.1 Pre-award due diligence

Additional pre-award due diligence may include, but is not limited to:

· Technical assessment of the proposed project: including technical viability and sustainability;

· Financial assessment: organisation financial standing/health, assessment of project costs, aid intensity values and match funding contributions;

· Economic impact / VFM assessment

· Commercial: viability and / or commercial sustainability of the proposed solution, market position, demand and / or interest in technology, terms of the grant funding agreement; and / or

· Programmatic: alignment to aims and objectives of the programme, programme plan which demonstrates the project can be delivered within the funding period and the critical path, risks and issues, details on project partners and / or subcontractors.

6.2 Post-award due diligence

Post-award due diligence may include, but if not limited to:

· Technical assessment of milestone deliverables against acceptance criteria to allow milestone payments to be released;

· Financial: assessment of expenditure for each milestone payment and reporting on planned costs, follow up review of financial standing/health if it is a multi-year project

· Commercial: change management including any variations to time, cost, scope, or GFA terms; review of milestone deliverables as required;

· Programmatic: project progress and impacts of any delays, risk assessment and mitigation activity; and

· End of project review: Has the technical and economic value been realised? Lessons learned and continuous improvement.

· [£250k and over Grants only] UK Space Agency commissioned and funded financial audit of Grant Recipient, and if applicable project partner, costs.

Grant Applicants who opt to work with project partners, companies involved in delivery of the project under a flow down agreement rather than a subcontractor, will assume all responsibility for partner due diligence.

Applicants will need to demonstrate they have carried out a sufficient level of due diligence with regard to their proposed project partners and subcontractors. Applicants will need to demonstrate they have carried out minimum checks at proposal stage, which may require further scrutiny if the proposal is to be funded.

To meet this requirement, applicants can provide evidence of due diligence carried out supported by the resulting information or submit a partner reasonable assurance statement. The evidence should be consistent with the checks that we would conduct on our Grant Recipients, for examples, financial standing, technical ability and scrutiny of the breakdown of costs. Any costs associated with project partner due diligence is considered a bidding cost and is to be borne by the applicant.

Applicants must provide evidence that they, and project partners have in place of appropriate anti-bribery and anti-corruption internal policies, and a process for declaring and managing conflicts of interest.

6.3 Annual Audit of Project costs

All projects will be subject to an external annual audit to ensure that costs claimed from the grant funding have been expensed on agreed project related expenditure and comply to UK Space Agency grant funding policies (e.g. match funding). The auditor will be appointed by UK Space Agency. All subcontractors and partners must provide access to project relevant expenditure. Therefore, Grant Recipients must maintain, and be able to provide upon request, any supporting evidenced as deemed necessary, such as:

· Timesheets (prime and, where applicable, partners)

· Staff costs (contractors)

· All receipts (including T&S)

· All partner and subcontractor invoices

· Breakdown of overhead costs

· Breakdown of capital usage (e.g. licence, data costs etc)

The UK Space Agency reserves the right to conduct ad-hoc audits throughout the life of the project.

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[1] Except those applying under Small Amount of Financial Assistance

[2] https://www.gov.uk/government/publications/ukeu-and-eaec-trade-and-cooperation-agreement-ts-no82021