Form

Questions and responses on the medicines and diagnostics manufacturing transformation fund scheme

Updated 21 May 2021

This form was withdrawn on 2 March 2022

This fund is now closed - see the list of companies awarded funding.

It is succeeded by the Life Sciences Innovative Manufacturing Fund.

These questions have been submitted to BEIS since the scheme launched on 7 April 2021. We are publishing the questions and our responses to ensure a fair and open competition.

Grant intervention rate, level of grant and project size

What is the level of grant that can be provided?

We are not able to provide an indicative grant level because all applications will be assessed on whether they have provided sufficient evidence of the minimum grant necessary.

Based on our previous experience of manufacturing projects in life sciences we have estimated that the level of grant we are likely to approve will be in the region of 10% to 15% of total project costs, but each case will be considered on its own evidence and could result in a lower or higher grant level than this indication.

Is the fund only open for projects classed as a new activity?

Grant funding for eligible costs can include costs related to the construction of a new facility or adaptations / expansions to an existing facility.

Is £8 million the total project value or just the grant offer?

£8 million is the minimum total project costs.

Are there any plans for projects of less than £8 million?

No, we currently have no plans to support projects of less than £8 million via MDMTF.

Is there a minimum or maximum amount of grant funding a company can receive?

You could apply for £20 million but it is highly unlikely we will fund a single project. The minimum grant you can apply for is £1 million.

We are not able to provide an indicative grant level because all applications will be assessed on whether they have provided sufficient evidence of the minimum grant necessary.

Based on our previous experience of manufacturing projects in life sciences we have estimated that the level of grant we are likely to approve will be in the region of 10% to 15% of total project costs, but each case will be considered on its own evidence and could result in a lower or higher grant level than this indication.

Is the grant paid in a single tranche, or in arrears?

The grant will be paid in arrears on receipt of a completed claim form and supporting evidence such as invoices and bank statements. Due to the short timescale for this fund, due to the defrayal of at least the equivalent of the grant before March 2022, it is likely that this will be in one payment rather than staged.

To qualify, does the £8 million need to be CAPEX, or just the grant funded portion?

This fund supports your projects capital costs which are those that would be capitalised on the balance sheet as tangible assets. Certain specialist costs such as architects required to design the building/fitout or industrial design costs for manufacturing equipment may be allowable, so you may include these in your application, but we may have to disallow these costs during the detailed examination of your case.

Are first runs/ trial runs from tooling, eligible costs?

We are unable to pay for first or trial runs of equipment as these related to consumables which are not a capital cost.

The guidance says we need to confirm that a project cannot viably proceed without public sector support. What does this mean?

Applicants must be able to demonstrate that the project could not proceed without public sector support, meaning that there is a genuine need for the grant. This could be for several reasons. Examples might be that there is a shortfall in the funding for the project, the project does not meet the company’s return on investment criteria, or the project would take place on a smaller scale.

Could a grant from the MDMTF be combined with a grant from a local authority or other public sector funder to make the total amount more competitive?

Double funding of the same assets is generally not allowable so you need to tell us about any public sector support applied for or already agreed to in your application form and we will assess on a case-by-case basis.

Is £20 million the total value of the fund or the project?

£20 million is the total value of the fund.

Eligibility of the project

Is the design work required to achieve capital investment (build) eligible?

Industrial process design or technical architect work which are required before a final decision is taken should be allowable provided clear justification is provided.

Are long-term project over multiple years eligible?

Multi-year projects are permissible if you are able to defray the total amount of grant funding you are requesting under this scheme, before March 2022. Further expenditure can be profiled in future years. In other words, if your project investment amounts to £10 million, and you are awarded a £1 million grant, you would need to defray £1 million ahead of March 2022. The remaining £9 million could be profiled into future years. For clarity regarding defrayal, the requirement is that the full value of the grant is spent by end of March 2022.

If an overall programme has been approved at an in-principle level, but different phases require individual approval, does this qualify?

In all cases applicants must be able to demonstrate that the project could not proceed as planned without public sector support, meaning that there is a genuine need for the grant. This could be for example that the project would not take place at all, go ahead outside of the UK, or it would proceed at a significantly reduced scale.

If you have already reached a company decision to invest in a manufacturing project you will not be eligible for MDMTF unless there are additional aspects to the investment that you would now like to include. In this case, we would only offer grant against the additional planned investment. It is best to be completely honest as due diligence will pick up previous board decisions through, for example, examination of board papers.

If the design / planning phase has been initiated, but a final decision not taken, would the project be eligible?

If you are undertaking preliminary work, for example to ascertain costs via detailed design work before a final decision is taken whether to proceed, and this can be clearly demonstrated, then the project would be in scope.

However, as stated above, if you have already reached a company decision to invest in a manufacturing project, you will not be eligible for the MDMTF unless there are additional aspects to the investment that you would now like to include. In this case, we would only offer the grant against the additional planned investment.

Is a manufacturing plant for a product still under development eligible?

Setting up a manufacturing facility for a product still under development is within scope.

Is the fund open to plc and limited companies?

Yes. Both plc and limited companies are eligible.

How do you view projects that are part of a broader multi-year investment programme?

You will need to decide on the appropriate shape of the project to match your business plans which could easily be multi-year.

You should tell us about your future investment plans in your application as this is relevant to your overall strategic case.

Multi-year projects are permissible if you are able to defray the total amount of grant funding you are requesting under this scheme, before March 2022. Further expenditure can be profiled in future years. In other words, if your project investment amounts to £10 million and you are awarded a £1 million grant, you must defray £1 million of eligible project expenditure to claim the £1 million grant ahead of March 2022. The remaining £9 million could be profiled into future years.

If I’m subcontracting my manufacturing, can the factory I’m subcontracting to apply on behalf of the project?

No, MDMTF is for single company applications only. If your subcontractor wanted to submit their own manufacturing investment plans to MDMTF that would be allowable, but it could not be linked solely to your manufacturing needs.

Eligibility of the product

Are biological reagents, in vitro devices and diagnostics allowable under the grant?

Biologics reagents are input material so are not in scope. In vitro devices and diagnostics are in scope.

Does the scheme definition of Medical Diagnostics / MedTech cover manufacturing of healthcare products that are not currently regulated?

No, your device must meet the requirement in the Medical Devices Regulations 2002 (as amended), including safety and performance. Standards, both horizontal and product specific, can be used to demonstrated compliance. Such standards including ISO 13485 covering quality management systems for medical device manufacturers, ISO 14971 covering risk management for medical devices and other process-specific standards, such as those covering sterilisation, may be relevant in demonstrating that suitable manufacturing processes are in place. See the full list of designated standards.

During the application process you may be required to confirm that you intend to do this and how. We may seek evidence of this as part of the monitoring process. If this is unclear, we may not be able to proceed in assessing your application.

Are API manufacturers eligible to apply into this fund?

Yes, the manufacture of active pharmaceutical ingredient (API) also known as drug substance is in scope. This is an update to the original guidance.

Are blood products (such as fractionation) within scope?

Blood derived products such as through fractionation are in scope of MDMTF. This is an update to the original guidance.

Application assessment

Is it possible to receive the benefits to cost ratio principles to enable an understanding of what you take into account?

As part of the economic and financial assessment, BEIS will assess (amongst other things) factors including Value for Money and additionality (including an assessment of the counterfactual case), in line with Green Book guidance.

This guidance is aimed at public servants and sets out an approach to appraising policies, programmes, and projects, including models and methods to support the provision of advice to clarify the social – or public – welfare costs, benefits, and trade-offs of alternative implementation options for the delivery of policy objectives.

Does regional or local criteria play a part in the assessment of projects?

To the extent that in calculation of wage premium (used in the BCR calculations) we will calculate the wage premium at your facility versus average salaries for the postcode where the investment is to be placed.

What would be the typical assessment process and timeline?

The initial sift of applications involves an assessment against the criteria of the fund, project deliverability and an initial financial viability check.

This will enable us to identify applications that have a strong fit with our objectives of economic growth, health resilience and deployment of innovative technologies. Following the sift:

1. Applications that fail to meet the strategic criteria of the fund and/or are not seen to be deliverable or fail the initial financial assessment will be informed that they have been unsuccessful.
2. Applications that strongly align with both the strategic criteria of the fund, deliverability, and satisfy the initial financial assessment will progress straight to the full assessment. At this stage, BEIS will appoint a case officer who will act as the Applicant’s initial point of contact throughout the remainder of the process. Moving to the full assessment stage does not guarantee that grant funding will ultimately be awarded.
3. Applications that are considered deliverable, satisfy the initial financial assessment but demonstrate only moderate alignment with the strategic criteria of the fund, will be placed on hold until the close of the fund. At this point we will either take projects through to a full assessment or applicants will be informed that have been unsuccessful.
4. If no application meets the strategic criteria of the fund, deliverability and initial financial assessment then no grant funding will be awarded.

As explained above, if your project passes the initial assessment, you will be contacted by a case officer who will explain the next steps of the process to you.

The closing date for the fund is 30 June 2021, and at the very latest a case officer will have initiated contact with you in the weeks following this date.

However, we will start our initial assessment as soon as your application is received, so it is possible that a case officer would contact you sooner than this date. For this reason, we advise making an application to the MDMTF as soon as possible.

Will applicants be given a clear yes or no to their application, or would there ever be a scenario where projects are scaled back to allow multiple projects to be supported under the fund?

We will assess the project presented to us and are highly unlikely to ask applicants to make changes to the overall shape of their planned investment. The appraisal and due diligence process will assess the case for assistance including whether the amount of grant requested is the minimum required to enable the project to proceed therefore we may ultimately offer less grant than the amount originally requested.

Allowable costs

To enable the capital costs to be defrayed, planning fees may be required. Are these eligible?

No, planning fees are not capital costs and are not allowable. However, certain specialist costs such as architects required to design the building/fitout or industrial design costs for manufacturing equipment may be allowable, so you may include these in your application, but we may have to disallow these costs during the detailed examination of your case.

Will project costs spent prior to approval be accepted?

Project costs incurred after the submission of your application to the fund may be considered as eligible expenditure.

What are the criteria for any recovery of the grant?

The terms and conditions of the grant including the required ‘expenditure and outputs’ will be detailed in the grant offer letter. This should be read through carefully prior to acceptance.

Defrayment and payment of grant

What are the expectations for the monitoring visits?

Monitoring visits will be undertaken throughout the life of the project. The visits will allow monitoring officers to check on project progress. This will include a physical inspection of assets, discuss and review evidence to support the required expenditure and outputs as well as providing an opportunity for grant beneficiaries to ask any questions.

Will a project manager be assigned to be the monitoring agent for the life of the project?

Although not always possible monitoring officers remain assigned to the project throughout the monitoring period.

Other questions

Will you make the Q&A’s available?

Questions and answers from all live events are being compiled into a document which will be made available to all attendees as well as on GOV.UK.