Costs guidance for Knowledge Transfer Partnerships - Innovate UK

Guidance for knowledge bases applying to a knowledge transfer partnership (KTP) competition. As part of your application we will ask for all of your costs.

Calculating your costs

The total eligible costs for a KTP project depend on four parameters:

  • duration
  • the nature of the work to be undertaken
  • geographical location of the business partner or the project
  • costs of the knowledge base.

Once you’ve established what your project is trying to achieve you’ll need to set out the tasks and stages in a work plan. This will allow you to understand which individual costs you can claim.

Your project must include the costs for:

  • employing the associate
  • the knowledge base supervisor
  • any laboratory or office space used by the associate
  • additional associate support.

Business partner’s costs

The business partner must cover all their own costs for supervising the associate and supporting the project.

Budget management

The KTP programme will establish a local management committee (LMC) for your partnership, which will control the costs according to the grant offer letter.

Cost categories

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

The maximum costs you can claim for employing the associate are £45,000 per 12 months.

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 £48,000 per 12 months.

The knowledge base and business partner are responsible for any salary and additional employment costs that exceed these maximum amounts.

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

These are only the travel and subsistence costs of the associate and the knowledge base supervisor. The business must list its own travel and subsistence in the additional company cost estimates section of the application form.

The standard travel and subsistence costs are £1,250 per 12 months. You can exceed this amount but you must justify your request in the application. Your request will be approved or rejected by the KTP programme manager. We encourage the business partner to help with any costs over the standard amount.

You must take into account 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.

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.

Items must have been purchased from third parties other than project partners and must not:

  • have already been purchased
  • have been included in other costs categories.

Standard consumable costs are £2,000 per 12 months. You can exceed this but you must justify your request in the application form. Your request will be approved or rejected by the KTP programme manager.

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.

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

The calculation of these costs varies for full economic cost (fEC) and non-fEC projects.

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 half a day a week supporting the project. 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 manager.

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

The calculation of these costs varies for fEC and non-fEC projects.

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. You must explain why this is needed and your request will be approved or rejected by the KTP programme manager. There are no exceptions to this maximum. We encourage the business partner to help with any costs over the standard amount.

Additional associate support

The calculation of these costs varies for fEC and non-fEC projects.

These are the costs for managing the associate, such as computing, personnel admin, learning resources and secretariat support to the LMC.

Project costs for fEC and non-fEC

There are 2 costing methodologies used by knowledge bases:

  • fEC (full economic costing method) used by higher education institutions
  • non-fEC (standard costing method) used by further education colleges, research and technology organisations (RTOs) and catapults.

Below are the standard costs for a project that lasts 12 months. You must calculate the figures for your project on a pro rata basis:

  • Associate employment more than 16 miles away from Charing Cross, London – £45,000
  • Associate employment within 16 miles of Charing Cross, London – £48,000
  • Associate development – £2,000
  • Travel and subsistence – £1,250
  • Consumables – £2,000
  • Associate estates cost – Varies for fEC and non-fEC
  • Knowledge base supervisor – Varies for fEC and non-fEC
  • Additional associate support – Varies for fEC and non-fEC

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 TRAC (the transparent approach to costing). 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. It must still be valid on the date of the competition funder’s panel, listed in the competition guidance. A certificate is valid for 12 months from the date it was audited and approved.

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 or one day per fortnight). For example, in the table 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 LMC secretariat. For example, in the table below, £36,000 of costs have been calculated on the KTP fEC certificate and charged at 50% to the project (£18,000).

Standard fEC costs for one associate for 12 months

All figures in £ Eligible costs SME project: Innovate UK grant at 67% SME project: SME contribution 33% Large business project: Innovate UK grant at 50% Large business project: large business contribution at 50%
Contribution to associate employment costs 45,000 30,150 14,850 22,500 22,500
Associate development 2,000 1,340 660 1,000 1,000
Travel and subsistence 1,250 838 413 625 625
Equipment, consumables, and other costs 2,000 1,340 660 1,000 1,000
Knowledge base supervisor 8,000 for example 5,360 2,640 4,000 4,000
Estate costs 0 0 0 0 0
Additional associate support 18,000 for example 12,060 5,940 9,000 9,000
Grant payable or business contribution 51,088 25,163 38,125 38,125

Project costs for non-fEC

For knowledge bases that do not use the full economic costing methodology, a fixed percentage is available to cover project costs. Check the costs carefully to make sure your overheads are met.

You must calculate the overheads of the knowledge base partner and direct staff costs, including the knowledge base supervisor, at 46% of the Innovate UK grant contribution.

You can calculate the eligible costs for your project on a pro-rata basis using the following table as a starting point.

Standard non-fEC costs for one associate for 12 months

All figures in £ Eligible costs SME project: Innovate UK grant at 60% SME project: SME contribution at 40% Large business project: Innovate UK grant at 40% Large business project: large business contribution at 60%
Associate employment costs 45000 27000 18000 18000 27000
Academic and secretarial support 10500 6300 4200 4200 6300
Associate development 2000 1200 800 800 1200
Travel and subsistence 1250 750 500 500 750
Equipment, consumables and other costs 2000 1200 800 800 1200
Sub total 60750 36450 24300 24300 36450
Overheads of the knowledge base partner and direct staff costs, including knowledge base supervisor 46% grant contribution of Innovate UK grant sub total 16767 11178
Grant payable or business contribution 53217 35478 35478 36450

Updates to costs guidance for knowledge transfer partnerships

This guidance was published on 29 September 2020 and last updated on 6 October 2020.

6 October 2020

We have clarified that the associate employment costs only include their salary.

6 October 2020

We have corrected the wording for associate employment costs to make clear the knowledge base is also responsible for any costs over the maximum. We have also removed an incorrect line that said the consumables costs calculations are different for fEC and non-fEC.

29 September 2020

First published.

Last updated: 12 October 2021

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