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Version 4 – Jan 09

KNOWLEDGE TRANSFER PARTNERSHIPS

GUIDEBOOK FOR KTP ADVISERS AND OFFICES

Version 4 - Jan 09 1

Contents1. CRITERIA 7

1.1 OVERARCHING CRITERIA 7

1.2 ENGAGING WITH INSTITUTIONS IN ADDITION TO HEI AND FE COLLEGES 8

1.3 KTP ENGAGING WITH THE FE SECTOR 9

1.4 POST-GRADUATE RESEARCHER KTP PROJECTS 10

1.5 KTP WITH VENTURE CAPITAL COMPANIES 10

1.6 KTN PARTNERSHIPS PARTICIPATION IN KTP 13

2. OPERATIONAL - THE APPLICATION AND APPROVALS PROCESS 15

2.1 OUTLINE SUBMISSION PROCESS AND CHECKLISTS FOR FULL PROPOSALS 15

2.2 REQUIREMENTS OF THE FULL PROPOSAL - THE PROCESS IN BRIEF 27

2.3 RECEIPT OF SIGNED COPIES OF NEW PROPOSALS 29

2.4. REPORTS ON PREVIOUS KTP ACTIVITY 29

2.5 GUIDE TO ADVISER ACTION FOLLOWING THE PAG MEETING 29

2.6 ACCEPTING THE TERMS & CONDITIONS OF THE GRANT OFFER LETTER 30

2.7 EXPLOITATION OF THE IP AND OUTCOMES FROM A PARTNERSHIP 31

2.8 CHANGES TO PARTNERSHIP ACADEMIC SUPERVISORS 32

2.9 PARTNERSHIP MONITORING REQUIREMENTS 32

2.10 INFORMATION TO HELP INITIATE A KTP 33

2.11 GUIDE TO REVISIONS AND EARLY COMPLETION OF PARTNERSHIPS 34

2.12 THE FINAL REPORT PROCESS 38

2.13 THE FINAL REPORT GRADING PROCESS 38


3. ASSOCIATE SUPPORT 40

3.1 GUIDE TO ADVISER MEETINGS WITH ASSOCIATES & PROJECT TEAMS 40

3.2 APPOINTMENT OF KTP ASSOCIATES 41

3.3 ASSOCIATE SALARY LEVELS AND ‘TOP-UP’ BY COMPANY PARTNERS 41

3.4 AGE DISCRIMINATION ACT 42

3.5 ASSOCIATE TIME MANAGEMENT 42

3.6 OBTAINING A HIGHER QUALIFICATION 42

3.7 PROFESSIONAL MEMBERSHIP FEES FOR KTP ASSOCIATES 43

4. PROJECT TEAM SUPPORT 43

4.1. SELECTION OF ACADEMIC STAFF TO SUPPORT PARTNERSHIPS 43

4.2 ATTENDANCE AT A SUPERVISOR WORKSHOP 44

4.3 THE ROLE OF THE FACILITATOR 44

5. ASSESSMENT OF AN ORGANISATION TO BE CONSIDERED SUITABLE AS A COMPANY PARTNER 45

5.1 KTP GUIDANCE NOTES ON THE ASSESSMENT OF THE FINANCIAL VIABILITY OF A COMPANY OR RTO AS THE POTENTIAL COMPANY PARTNER 45

5.2 FURTHER ASSESSMENT OF AN ORGANISATION TO BE CONSIDERED AS A SUITABLE COMPANY PARTNER 56

5.3 DEFINITION OF AN SME 57

6. BUDGET GUIDANCE 58

6.1 KTP PROJECT BUDGET GUIDELINES FULL ECONOMIC COSTING (fEC) 58

6.3 KTP STANDARD (NON fEC) BUDGETS, ELIGIBLE COSTS AND GRANT AMOUNTS APPLICABLE FROM JANUARY 2009 65

6.4 APPLICATION OF NON fEC GRANT RATES FOR KTP - FAQs 70


6.5 APPLICATION OF KTP GRANT RATES FOR NON-fEC PROPOSALS 71

6.6 APPLICATIONS FOR ADDITIONAL FUNDING FOR ALL BUDGETS 72

6.4 APPLICATION OF NON fEC GRANT RATES FOR KTP - FAQs 75

6.5 APPLICATION OF KTP GRANT RATES FOR NON-fEC PROPOSALS 76

6.6 APPLICATIONS FOR ADDITIONAL FUNDING FOR ALL BUDGETS 77

6.7 VAT 78

6.8 R&D GRANTS 79

7. COMMUNICATION 79

7.1 COMMUNICATION WITH AEA - HELPLINE 79

7.2 NEW USER ACCESS TO THE PORTAL 80

7.3 KTP STRATEGY AND SPONSORS CRITERIA 81


The Technology Strategy Board is a business-led, executive

non-departmental public body, established by the Government. Its mission is to promote and support research into, and development and exploitation of,

technology and innovation for the benefit of UK business in order to increase economic growth and improve the

quality of life.


PREFACE

The Knowledge Transfer Partnerships (KTP) Guidebook is designed for use by the KTP stakeholder community: Sponsors, KTP Offices, Advisers and Regional Development Managers. The purpose of the Guidebook is to help support potential and existing Partnerships and to ensure that KTP is being delivered consistently across the whole of the UK. Although much of this information is already in circulation in some form or another, this Guidebook attempts to consolidate and centralise this into one point of reference. It should be particularly useful to those new to KTP.

The Guidebook should be read in conjunction with other available KTP information, such as the Management Handbook for Supervisors, the Associate Handbook and the contents of the Approved Grant Application and Proposal Form, together with its Guidance Notes. These documents are available from the Document Repository on the Portal.

The Guidebook will be updated periodically with information updates communicated through use of the KTP Portal. Please contact Martin Webb with any suggestions for content on 0870 190 8373 or email: [email protected].


Further distribution of this KTP Guidebook is not permitted without permission from AEA,1. CRITERIA

1.1 OVERARCHING CRITERIAThe overarching criteria which must be applied to all KTP Partnership proposals and also fit with one or more of the Sponsors’ criteria are outlined below. Individual Sponsor’s Criteria can be found on the Public Area of the website.

Knowledge Transfer PartnershipsOverarching Criteria

Each proposal for a Knowledge Transfer Partnership will be assessed against all of the following criteria, no matter which of the Knowledge Transfer Partnerships Sponsors will support that project.

a. Every proposal that is approved as a Knowledge Transfer Partnership must be fully in accord with the agreed Mission and Objectives for Knowledge Transfer Partnerships.

b. The projects must provide the Associate(s) with an intellectually challenging learning experience appropriate to his/her background and aspirations.

c. There must be a clear and appropriate training plan for the Associate(s).

d. There must be an appropriate level of support available to the Associate(s).

e. The potential outcomes/benefits for all Partners and the Associates will not, or are most unlikely to, occur to the same extent without a Knowledge Transfer Partnerships project (ie there is additionality).

f. The Company Partner must be regarded as being financially viable following consideration of its

latest Report and Accounts, or other financial information where appropriate, including subjecting the accounts to a set of prescribed tests.

g. The proposed project will be relevant to the strategic plans and objectives of the Company Partner.

h. There must be a clear need for knowledge/skills/technology input from the ‘Knowledge Base1’ to the projects that make up the proposed Partnership.

i. The Company Partner must be capable of making significant use of the knowledge/skills/technology to be transferred.

j. The Company Partner will have indicated that the proposed project is likely to result in the spread of best practice (eg within that company or to suppliers or to customers).

k. The proposed involvement of the Knowledge Base Partner will provide the appropriate expertise, having regard to the knowledge, skills and technology/technologies to be transferred during the course of the project.

l. There must be evidence of commitment to the proposed project by both the Knowledge Base and Company Partners, and this should be reflected in the proposed membership of the Local Management Committee.

m. There must be clear benefits to the Knowledge Base Partner, including target outcomes.

n. The stated potential benefits for the Knowledge Base and Company Partners are likely to accrue.

1 The ‘Knowledge Base’ is defined as Higher and Further Education Institutions (the latter teaching at NVQ Level 3 and above in the appropriate subject), Research and Technology Organisations and Public and Private Research Institutes.


1.2 ENGAGING WITH INSTITUTIONS IN ADDITION TO HEI AND FE COLLEGES

Eligible Organisations

1. Organisations within the following categories, in addition to HEIs and FE Colleges, may be eligible to participate in KTP as a Research and Technology Partner:

Government-funded Research Institutes. Government-funded Research Establishments. Public Sector Research Institutes. Non-Departmental Research Contractors. Independent Research and Technology Organisations.

2. To be eligible to participate, such organisations will normally satisfy the following criteria:

Have a strong record of undertaking relevant research. Have strategic objectives to support a broad range of clients, particularly

from industry.

3. Before significant effort is expended by the Partnership on developing a proposal for a Partnership other than an HEI/FE College as the potential research and technology partner, one or more Sponsors must have explicitly stated its willingness to allow its funds to be used for grant support to that organisation. An outline proposal should be used for this purpose. Where an organisation is a member of the Association of Independent Research and Technology Organisations (AIRTO) then an ‘Outline proposal’ to confirm eligibility is not required.

4. Before any particular proposal for a KTP Partnership involving an organisation other than an HEI/FE College as the potential research and technology partner can be approved for grant funding, the Partnership Approvals Group (PAG) and the Technology Strategy Board (TSB) will need to be satisfied that the proposed research and technology partner:

Must satisfy the general overarching KTP Programme criteria. Have sufficient resources to manage the Partnership, including the

necessary staff commitment. Is prepared to encourage, where appropriate, the Associate(s) to

undertake a higher degree at an identified HEI and is able to cooperate with staff from the HEI in supervising an Associate aiming to achieve a higher degree award.

Normally has plans and associated target deliverables for feedback into the research and training in associated HEIs.

Is prepared to reach suitable agreements with the industrial partner and associated HEIs on intellectual property rights in line with KTP policy.

Has indicated how the Partnership will benefit the organisation’s own strategic development, including, where appropriate, its ability to


influence the performance of its own industrial community.

5. All applications and proposals for Partnerships involving organisations other than HEIs/FE Colleges as the proposed Research and Technology Partner should be submitted using an appropriate application and proposal form.

6. The approval process for such organisation will follow the standard KTP procedures.

7. The budget and levels of grant support for a Partnership involving an institution which is not an HEI/FE College will be no different, including the contribution to indirect costs.

8. When an associated HEI provides facilities for the registration of a KTP Associate for a higher qualification and there is a cost associated with that registration and related supervision, the non-HEI/FE College Research and Technology Partner will assist with this cost, for which there will be no additional grant support.

1.3 KTP ENGAGING WITH THE FE SECTORIn delivering the expansion of KTP into the FE sector it is recognised that a ‘one size fits all’ approach is not the most effective way of achieving the targets set out in the KTP Strategic Plan. Much of the KTP stakeholder community has existing links and relationships with appropriate FE Colleges.

The following models are already in use across the KTP community to engage FE Colleges as potential Knowledge Base Partners.

The FE College uses its own resources to develop and bring forward a proposal for the first time. It uses the standard mentoring support of £1,000 of grant support to receive help and advice from a suitable HEI. Follow on proposals are brought forward as normal without mentoring.

An existing HEI brings forward a proposal which includes engagement with suitable staff at an FE College to contribute to the expertise required by the project team. Payment for this expertise is made under local arrangements and is met from the existing budget. This helps key players in the FE College understand what KTP is about and encourages them to undertake a future KTP Partnership in their own right.

The FE College brings forward a proposal with administrative support being provided by an HEI. This enables the administrative burden to be carried by the HEI but allows the FE College teaching staff to facilitate the knowledge/skills transfer. Local arrangements must be made between the FE College and the HEI to pay for this support.

An existing FE College brings forward a proposal that includes engagement with suitable staff at an HEI to provide access to key expertise required by the project team, not available from within the FE College. Payment for this expertise is made under local arrangements and is met from the existing budget.


Colleges collaborate together regionally to set up their own KTP Offices to provide administrative support to proposals. These are funded under local regional arrangements.

1.4 POST-GRADUATE RESEARCHER KTP PROJECTSThe current KTP Strategic Plan provides an opportunity to engage in the concept of one-year KTP Partnerships involving postgraduate researchers. The objective is to enable them to spend a year in a business specifically to implant their research topic into the company whilst gaining business experience.

Proposals will be considered in the following circumstances:

1. The Knowledge Transfer Partnerships criteria apply, except where modified or extended below.

2. The potential Company Partner agrees to such a KTP project and has the capability and capacity to exploit the outcomes.

3. The potential Associate has completed their period of research and is awaiting the results of the grading of their dissertation or thesis, or has recently been awarded their higher degree.

4. That the Associate undertakes the Associate Development Course and the work associated with meeting the National Management Standards. This may mean that the project length is longer than 12 months but not extending beyond 18 months.

5. The commercial/business experience to be gained by the Associate is clear in such proposals.

6. That the name of the proposed KTP Associate be included in Section 5 of the proposal form.

1.5 KTP WITH VENTURE CAPITAL COMPANIES

1. Background

AIM: To help improve the technology domain depth, breadth and global reach of UK venture capital (VC) companies, and so enable them to make rational judgements on the risks and benefits of supporting leading-edge entrepreneurs in technology.

The basic idea is a variant of KTP in which the company partner is a VC company and the academic partner is one of our leading research-intensive universities or business schools. The Associate training and development aspect of the KTP is taken up by participation in the Kauffman Fellows Program in the United States. This provides VC companies with the opportunity to:


Recruit expert technologists who aspire to careers as top flight professionals in the VC industry or who have the potential to become leading entrepreneurs.

Develop close alliances with some of the best universities in the UK.

Undertake technology or business-based projects important to the company’s commercial success and which could lead to new opportunities for supporting UK entrepreneurs.

2. The Kauffman Fellows Program

This programme (www.kauffmanfellows.org) has been running for approximately ten years and has built a strong reputation in the VC industry, mainly in the US but increasingly internationally. It aims to develop and build networks of emerging leaders in the venture sector globally. The 24-month programme includes four one-week modules in the US (probably one of the four will be in Europe in future). These cover the basic tools and skills required in VC as well as leadership skills and the development of networks between Kauffman alumni. A typical Kauffman Fellow will have at least ten years’ experience in an area of technology (eg IT or life sciences), and many have an MBA and/or a higher degree. The age range is 28-48 years, with an average of 36. Fellows are employed by a VC company where they are mentored by an experienced partner and undertake a project.

3. The KTP/VC Pilot

By bringing together KTP and the Kauffman Program, the aim is to help UK VC companies to become even more entrepreneurial and give them access to the type of highly trained people who have benefited the US market over the last ten years. The intention is to have 4-6 such VC KTPs running at any one time. Each participant (company and university) will engage in only one Partnership, although mechanisms will be established to cross-fertilise experiences and ideas across the Partnerships.

A participating VC company will identify a suitable business opportunity that could form the basis of a challenging two-year project. The project will deliver strategic benefits to the business, for example, it could:

Lead to improvement in the management of companies’ investment portfolios.

Encourage investment in technology, or specific fields of technology.

Improve companies’ understanding of the culture and working practices of a geographic region (ie overseas) to develop new technology-based opportunities for UK clients.

Enhance regional venture capital provision in the UK.

During the two-year period, the Associate will undertake the project and participate in the Kauffman Fellows Program (this replaces participation in the KTP modules and the Diploma in Management), with supervision from a senior member of the VC company and an academic from the university. The UK Associates will join the US Kauffman Fellows Program and will do exactly the same course as the US and International Fellows. A typical annual intake to the Kauffman Fellows Program comprises about 20 individuals.


On completion of the project, the Associate will be one of a very small number of highly trained, technologically literate entrepreneurs operating in the global VC market. The host company may wish to continue to employ the individual, or to encourage them to establish their own business enterprise in the field. The aim is to see a step change over a period of 5-10 years in the rate of success of high-quality UK technological propositions to VC companies.

4. Budget

The budget for VC projects is as a standard KTP proposal except that an extra £15,000 pa will be contributed by the TSB to pay for the Kauffman training, and an extra £4,000 pa to pay for travel and subsistence in the US in support of this.

The company is expected to meet all additional salary-related costs above standard. It is expected that prospective Associates with the requisite experience and ability will command a significantly higher salary in the market than the customary KTP Associate.

5. Recruitment

The TSB will place an advertisement, as it has been done in previous years, inviting applications from potential Associates. This will take place in late November/early December each year, Applicants must meet the requirements of the Kauffman Fellows Program and so the initial filtering of applications is carried out by the Kauffman Program. NB: There is a $250 application fee. The list of ‘approved’ candidates is then provided to participating VC companies so that they and their academic partners can interview and select their Associate. As usual, Associates should not be current employees of the VC company.

6. Previously supported VC KTP Applications

Amadeus Capital Partners and Imperial College (Energy Futures Laboratory)Project: To identify emerging investment opportunities in the energy and environmental sector in areas such as bio energy and low carbon technologies.Status: Associate started July 2006.

Accel Venture Partners and London Business SchoolProject: To study the dynamics of the entrepreneurial landscape in Europe for technology-driven consumer internet and mobile-focused start-ups, and to develop a positioning strategy for Accel.Status: Associate started September 2006.

Archangel Informal Investments Ltd and University of EdinburghProject: To capture, examine and codify investment management processes within an angel investment context and develop an investment management framework based on global best practice.Status: Associate started May 2007.

For those Offices wanting further advice regarding this opportunity, please contact our KTP Adviser, Dr Gillian Rysiecki.


1.6 KTN PARTNERSHIPS PARTICIPATION IN KTP 1. Background

Funding for KTN is provided centrally, ie from Government, to support the initial start-up stage and management functions of the KTN while the organisation becomes self-funding from its membership.

The funding required by each KTN to undertake research and knowledge transfer activities is obtained through the available funding mechanisms, ie those from the UK Government, Research Councils, EU schemes or other sources (eg Knowledge Transfer Partnerships, CASE or Framework programme).

2. KTN - participation

Two types seem to be possible. The first is the normal model involving a company and university or research organisation. The second is where the Knowledge Base Partner is the KTN itself.

3. Company/University or RTO Partnerships

Where both the company and Knowledge Base Partners are involved in a particular KTN and they choose to use the Knowledge Transfer Partnerships route, this fact should be clearly identified in their proposal.

Here the three agendas, the benefits to the company, the Associate and the Knowledge Base Partner, are maintained. The company acquires the knowledge, understanding and ability to exploit its new capability. The Associate gains business experience through applying the theoretical knowledge, gained as part of their higher qualification, practically in the business plus project management and leadership skills. At the same time the Academic is able to see, contribute to and learn from the application of their particular knowledge in a business/operational environment and the feedback into their particular research arena and teaching that occurs.

4. Company/KTN Partnerships

It is possible for a KTN to be the Knowledge Base Partner, with one of the Technology Translators, employed by the KTN, acting as the Academic/Researcher whose knowledge is being sought by the Company Partner.

The benefit agenda for the Company Partner is as for any other Knowledge Transfer Partnership.

The benefit agenda for the Associate will be the same as that where the Knowledge Base Partner is a Research and Technology Organisation (RTO), ie the RTO needs to have a linked HEI so that the higher qualification opportunity for the Associate can be maintained. The KTN Partnership will need to identify the Academic Partner providing this facility in the proposal.

For the third part of the agenda, the KTN Partnership and Technology Translator involved can be likened to that where the Knowledge Base Partner is an RTO. The KTN Partner would be the recipient of the KTP Grant Offer and so would also be the recipient of the balance of the project costs from the Company Partner. (NOTE:


Generally, the lead organisation of the KTN is the recipient of the grant and is usually an RTO or University, ie a legal entity.) With regard to the benefit agenda for the KTN, this will be similar to that of the RTO.

It is expected that the KTN will show how the company benefited by the knowledge transfer through case study material for use both within and external to the KTN.

The Technology Translator would produce refereed and non-refereed papers for the appropriate journals.

Given that such KTP projects are likely to be at the research end of the KTP spectrum and there is a linked HEI for the Associate’s higher qualification opportunity, then this provides the opportunity for the feedback into teaching, though it need not be limited to that particular HEI.

There might also be an opportunity for undergraduate projects with the company.

Other Technology Translators/researchers might be called upon to contribute with other and related areas of knowledge to support the KTP project. Here, there would need to be an internal arrangement for this between the members of the KTN and within the current project cost levels.

Professional qualifications attained by the Technology Translator as a result of acting as the KTP Supervisor.

Patents/commercial links.

New KTN Projects identified.

The normal outcomes should be looked for.

There is a potential issue regarding the relationship between the KTN Secretariat and KTP Centre on where the different duties lie. This needs to be treated with care but could be resolved by either one of them leading on this activity and closely involving the other.


2. OPERATIONAL - THE APPLICATION AND APPROVALS PROCESS

2.1 OUTLINE SUBMISSION PROCESS AND CHECKLISTS FOR FULL PROPOSALS

1. General

1.1 The revised KTP Outline Proposal process was introduced from 1 April 2007, and all full KTP Proposals submitted to the September 2007 Partnership Approvals Group (PAG) meeting and thereafter are required to have been through this process and had a positive outcome.

1.2 The KTP Outline Proposal process is designed for use by the KTP Stakeholder community to ensure we are providing consistency and to support the building and bringing forward of high-quality Proposals, and at the same time delivering benefits to the ‘3 Pillar’ agenda.

1.3 The Outline Proposal helps to focus the company on its strategic intentions and enables the Knowledge Base and KTP Advisers to offer, where appropriate, alternative solutions to KTP. It also helps to filter out at an early stage those Proposals which do not meet fully the ‘Overarching Criteria’ that have to be met by all KTP Proposals.

1.4 KTP Advisers have the opportunity to seek technical expertise from the pool of KTP Advisers and, where necessary, obtain a second opinion on issues such as the financial viability of the Company Partner. Advisers also have access to the history of previous Outline Proposal submissions that may have been made through other Advisers, which makes it possible to filter out those new Proposals which seek to repeat or duplicate previous KTP activity undertaken by a company.

1.5 Not all Outlines have to be sent to Sponsors for consideration. However, early discussion with the KTP Adviser can help to put in place a realistic timetable for submission and better understanding of the likely time it will take to receive a complete response. Sponsors use the Outline Proposal process to ‘add value’ by providing potential Partnerships with feedback on what additional objectives or tasks should be included when developing a full Proposal. Sponsors also benefit from improved forecasting of the likely demand for funding, and information can be captured much earlier on their behalf. Outline Proposals are used to confirm that full Sponsorship funding is available to support a Proposal, prior to a full Proposal being developed.

1.6 The use of the Outline Proposal also supports the work undertaken by staff at the Technology Strategy Board (TSB) and by AEA’s, management team, to best manage the KTP budget on behalf of all Sponsors.

1.7 The overall effect is to add value when developing a full Proposal and increase the approval rate of full Proposals if they come forward to the PAG for consideration, whilst also reducing the number of amendments required to be addressed in a full Proposal before grant offer letters are issued.


2. Outline Process Flow Diagram Explanatory Notes

2.1 Partnerships send Outlines (Parts 1 & 2) by email to their nominated KTP Adviser for consideration. The Adviser records the Outline on the Portal, with Parts 1 & 2 being added as an attachment. Advisers may take the opportunity to send it to an ‘expert colleague’ or group of colleagues for comment before deciding whether it should be supported.

2.2 Outline Proposals are reviewed by the Programme Office team and Regional Manager who consider the choice of Sponsors made by the Partners and the Adviser. They decide if that choice is appropriate. If there is a difference of opinion over the Sponsors selected then this is communicated to the Adviser by the Programme Office until the issue is resolved.

2.3 Where it is required, the appropriate Outline Proposal is sent to the Sponsors for comment/consideration.

2.4 Sponsors have the opportunity to ask for additional information before making a decision on whether or not to support an Outline Proposal. Sponsors’ comments and/or decisions are automatically communicated to the relevant Adviser. If more than one Sponsor has been identified, and comments have been requested from them, the Adviser must continue to wait until a response has been received from all of the Sponsors contacted. This is particularly important when one Sponsor provides confirmation that it is willing to provide 100% support for a project but the Outline has also been sent to others. The Partnership must wait for a response from all of them before it commences the development of a full Proposal.

2.5 The new Portal Outline process automatically displays a history of all decisions made by Advisers and Sponsors. This information can be filtered and downloaded by all users. The Portal provides a step-by-step guide for both Advisers and Sponsors to support the whole process.

2.6 In the unlikely event that the online system should fail, then Advisers and Sponsors should revert to the use of the previous email system.

Outline Process Flow Diagram


Outline Process Flow Diagram (continued)


3. Responsibilities of KTP Offices and Partnerships


3.1 The KTP Centre/Office should set its own criteria for determining which Outline Proposals should be developed, and when they should be submitted to their nominated KTP Adviser for consideration. It is suggested that criteria include strategic value to regional economic development and to the mission of the university/college, and the challenge posed to participants and the level of innovation represented by the proposed project. Partnerships should help companies and other organisations address important technological, commercial and social problems and opportunities so that they (and possibly related companies) make significant improvements in their competitiveness. It is equally important that the participating Academics are extended and, through KTP, able to keep up to date with the latest business requirements as well as becoming skilled in the industrial applications of new ideas. Also, it is important that the work content is intellectually challenging for Associates and provides opportunities for their professional development. It is imperative that real knowledge transfer occurs, such that knowledge, technology or skills gaps within the company are filled.

3.2 Partnerships must enter into early discussions with the nominated KTP Adviser to agree the next steps needed to develop the Outline. These early discussions must be used to help support the work of KTP Offices and Advisers and are only part of the toolkit used by all parties to establish what support can be provided to meet the needs of a company. It is not intended to replace all the preparatory work such as best practice workshops, visits and discussion that already take place, but is designed to focus attention on key information requirements.

3.3 Outline Proposals may be submitted at any time provided it is with the agreement of the KTP Adviser. However, Partnerships must be made aware that Outline Proposals may have to be sent to others for consideration before the KTP Adviser is able to give the ‘go ahead’ for the development of a full Proposal. Typically, it may take two to three weeks or more to establish support if:

The Adviser requires expert advice from specialist KTP Adviser/Regional Group colleagues, for example, regarding financial issues etc.

There is a requirement to send the Proposal to a Sponsor for consideration.

The KTP Office staff must agree with their nominated KTP Adviser a realistic timetable for the whole of the KTP Proposal submission process, to ensure that sufficient headroom is maintained to plan, prepare, develop and submit an Outline and any subsequent full Proposal.

3.4 Part of the Outline process requires that the Partnership identify all possible Sponsors whose criteria match the objectives of the proposed Partnership and which would support the type of organisation identified as a Company Partner. KTP Offices must make themselves familiar with the latest criteria set by all the Sponsors, which may be amended from time to time but which can be found at: www.ktponline.org.uk/strategy/SponsorshipCriteria.aspx

3.5 Where support for a full Proposal is in doubt or the Outline is being used to establish whether any support is available, it is important that the expectations of the Partnership are managed accordingly. KTP Office staff must make clear that if Outlines are sent to Sponsors for comment/consideration then a response from all Sponsors must have been received before the Advisers will give the ‘go ahead’ to develop a full Proposal. Without waiting for such responses, the Partners will miss the opportunity to add value to the content of a full Proposal. KTP Office staff must make Partnerships aware that Sponsors may raise supplementary questions, as this


can sometimes be a key opportunity to add further value to what is being proposed by clarifying issues and adding tasks.

3.6 Partnerships must take account of comments made by Sponsors and are required to address any issues raised and include them during the development of any full Proposal.

3.7 The KTP Office or university must cross-reference the numbers allocated to the Outline Proposal with any full Proposal submitted.

3.8 It is particularly important for Partnerships and KTP Office staff to realise that, provided they follow closely the advice provided in this document, the chances of the full Proposal being rejected during the submission process by either the KTP Adviser or the KTP Programme Office staff, for procedural reasons, will be substantially reduced. Attached at Section 9 is a checklist of requirements that must be met.

4. Responsibilities of KTP Advisers

4.1 The KTP Adviser’s role in assessing the suitability of Proposals remains unchanged. They have the responsibility of managing the pipeline process and providing feedback to Partnerships. KTP Advisers have responsibility for considering Outline Proposals received from their nominated institutions, and they should also establish if the Partnership is attempting to resubmit an Outline Proposal previously considered by another Adviser colleague. They have responsibility for deciding if it is appropriate that the Outline should be revisited. The information about previous KTP Outline activity is available to Advisers on the Portal History. Outline Proposals rejected by the Regional Group may not be appealed. Advisers are also required to establish what other KTP activity within the company is being planned or may have been undertaken in the past.

4.2 On receipt of an Outline Proposal the KTP Adviser must assess its suitability and decide whether to support its progress through the Portal system or reject it. The KTP Adviser will decide when it is most appropriate to visit the Company Partner, but the visit must take place prior to making their endorsement of support or rejection of a Proposal. All Outline Proposals which are rejected must also be logged on to the Portal system as this enables other Advisers and Sponsors to identify whether a Proposal has been rejected previously and, if so, the reasons for it.

4.3 The KTP Adviser must also consider if the Partnership has identified correctly in Parts 1 & 2 of the Outline Proposal all possible potential Sponsors whose criteria appear to match the Proposal and may support the Outline. The KTP Advisers must make adjustments to the chosen Sponsors, if appropriate. At this stage it may not be possible for the Adviser to make a decision regarding support for the Outline because:

The Adviser needs to seek advice from expert colleagues on technical or financial issues etc.

It is unclear if there is sufficient Sponsorship support for the Proposal and whether any of the Sponsors’ criteria clearly match the objectives of the Partnership and/or the type of organisation involved.

The Sponsors have set a mandatory requirement to review all Outline Proposals which they may be called upon by the PAG to support prior to making a decision.


Partnerships are to be reminded that support at the Outline stage is no guarantee that the PAG will support the full Proposal.

4.4 The KTP Adviser must not permit a Partnership to submit a full Proposal for consideration unless it has been preceded by an Outline for which a full and positive response has been received from Sponsors and feedback has been provided to the Partnership. If an Outline Proposal has been sent to Sponsors for comment then the Partnership must be advised to wait for a response from all of them before proceeding to develop a full Proposal. The KTP Adviser must ensure that the reference number allocated to the Outline when logged on the Portal is included in any full Proposal.

4.5 The KTP Advisers must take responsibility to ensure that where Sponsors have provided feedback, this feedback is reflected in and during the development of any full Proposal.

4.6 The KTP Adviser is not permitted to contact the Sponsor representative directly without prior agreement from the Programme Office.

4.7 Attached at Section 9 is a checklist of requirements that must be complied with when the Partnership is ready to submit a full Proposal.

5. Responsibilities of the KTP Programme Office

5.1 The KTP Programme Office will no longer acknowledge receipt of Outline Proposals. The use of the online Portal provides this information automatically. The KTP Programme Office will continue to review the choices of possible Sponsors selected by the KTP Adviser and confirm whether or not these are correct. In the event of a disagreement over the choice of Sponsors, the Programme Office will seek advice from the KTP Programme Director or individual Sponsors as appropriate. The KTP Adviser concerned will be contacted in order to reach an agreed resolution, before deciding whether or not the Outline Proposal should be sent to Sponsors. The online Portal process will be used to request that the Adviser revisits this question.

5.2 The KTP Regional Manager is available to undertake preliminary pre-Outline discussions with KTP Advisers and Offices, prior to completion of the Outline Proposal, especially where project ideas ‘push the criteria envelop’ or ‘break new ground’.

5.3 The Programme Office has responsibility for communication with Sponsors and will chase them for a response to Outlines, if necessary. The current practice is to not chase Outline Proposals for the first two weeks after submission to the Programme Office.

5.4 The Programme Office will, on receipt of a full Proposal, check that it has been through the Outline process, that it has received a full response from all Sponsors, that 100% Sponsorship is available and that there is support for development of a full Proposal. Where responses are outstanding, the full Proposal will not be accepted for consideration by the PAG.

5.5 Attached at Section 9 is a checklist of requirements with which full Proposals must comply on submission.


5.6 The Regional Group and PAG members will be provided with a ‘PAG Summary’ of each Outline to accompany each full Proposal. The PAG Summary is available in pdf format from the Portal History. The KTP Advisers will be notified by email when the PAG Papers have been posted to the Portal.

6. Responsibility of Sponsors

6.1 Individual Sponsors will maintain up-to-date criteria for the support of KTP Partnerships and will advise the lead Sponsor and the Programme Office of any changes. The most up-to-date criteria are available on the public area of the website. Visit: www.ktponline.org.uk/strategy/SponsorshipCriteria.aspx

6.2 Sponsors should post any requests for further information and record final decisions by making use of the Portal only. This information, once posted, is immediately available to Advisers. Sponsors are encouraged to respond within two weeks of receiving an Outline Proposal.

6.3 Sponsors are requested to notify the KTP Programme Office of staff changes where they have responsibility for providing feedback and comment on Outlines. Support and guidance on making the best use of the Portal is available from the KTP Regional Manager at any time.

7. Selecting a Sponsor

7.1 Previously we have not always sent Outline Proposals to minor Sponsors for consideration as the projects could be covered by TSB funding. The PAG had delegated authority to make decisions on their behalf. TSB colleagues and the KTP Programme Director have agreed that it is now appropriate for Advisers to select as many minor Sponsors as possible to support a project if the Outline appears to fully match their criteria. In doing so, this gives the minor Sponsors the opportunity to consider the Proposal and to feed back to the Partnership, hopefully at the same time adding value and making suggestions for improvement/additions before a full Proposal is developed. This also gives us the opportunity to meet the requirements of the TSB by maximising the expenditure from minor Sponsors’ budgets wherever possible and, in turn, reducing the pressure on TSB funding. Providing Outlines to all possible Sponsors up-front also gives them a much better understanding of what is in the pipeline and of the pressure/demand for funding.

7.2 This approach reduces the amount of post-PAG activity involving the sending of the full Proposal that had been supported to the minor Sponsor for consideration. Partnerships must now identify all possible minor Sponsors up-front and Advisers must check if those chosen are correct and, if necessary, make adjustments.

The following should be taken into account when considering whether Sponsors should be sent the Outline.

Serial Sponsors Comments1 Technology

Strategy Board (TSB)

Outline Proposals do not have to be sent to the TSB for consideration unless support for the Proposal is in doubt. The TSB may be prepared to support projects that involve a publicly funded organisation, in particular, where the transfer of knowledge includes the improvement of operational management and planning. In all such cases


the Outline must be sent to the TSB for consideration. If supported, the TSB would wish to share funding with another Sponsor.

2 Devolved Administrations

Outline Proposals do not always have to be sent to InvestNI and SG for comment/consideration unless it is unclear if the Outline Proposal meets their criteria. Where the Outline clearly meets criteria then PAG and the TSB representative present at the meeting will continue to make decisions on their behalf. Outlines considered suitable for WAG funding must always be sent to them for consideration.

3 AHRC The Sponsor does not wish to receive full Proposals following the PAG meeting and the TSB does not have delegated authority to make decisions on AHRC’s behalf. Therefore, all Outline Proposals meeting their criteria must be sent to AHRC for consideration.

4 BBSRC The Sponsor has requested that it reviews all Outlines which may meet its criteria. BBSRC is unlikely to support projects that have no linkage back to previous BBSRC-funded activity. To avoid unnecessary delay through BBSRC needing to request additional information, it is essential that the Outline Proposal includes information on the named academic(s) participating in a proposed project and more information to clarify the underlying science and linkages to previous BBSRC-funded research.

5 Defra The Sponsor must be sent all Outlines that appear to meet its criteria. The PAG does not make decisions on Defra’s behalf. The Sponsor is keen to see environmental sustainability issues being addressed in the Proposal.

6 DH If the Outline requires support from DH then the Outline must be sent firstly to DH for consideration. The PAG does not have delegated authority to make decisions on behalf of DH.

7 RDAs The TSB does not make decisions on their behalf. Outlines must be sent to all RDAs for consideration. Northern Way money has now all been committed, and no further Outlines should be sent.

8 STFC and NERC The Sponsors have agreed that the TSB can make decisions on their behalf. However, in the interests of maximising individual Sponsor’s expenditure it is preferred to send Outlines to them for consideration.

9 EPSRC CTA and KTA wef April 2009

Knowledge Base Institutions that have EPSRC Collaborative Training Accounts should indicate on the Outline to what extent they are prepared to use this funding to support an Outline. The KTP Adviser and Offices are expected to ensure that discussions take place with account holders at the earliest opportunity. Outline Proposals must not be sent to EPSRC for consideration although they should, when appropriate, be identified as a Sponsor on the Outline Proposal.

10 ESRC The Sponsor must be sent all Outlines that appear to meet its criteria. PAG does not make decisions on its behalf. The Sponsor is keen to see where cultural and social issues are being addressed.

8. Is there sufficient funding available to meet the whole costs of the grant

8.1 The majority of minor Sponsors prefer to share the funding of projects with at


least one other Sponsor. When a number of Sponsors are identified/involved it is particularly important to ensure that there is sufficient financial support available to meet all the costs of the grant.

8.2 From time to time some minor Sponsors’ funding may be fully committed for the year. KTP Advisers will be advised when this happens and it may result in an increased number of Outlines having to be reviewed by the TSB.

9. Checklists for full Proposals

Please follow the ‘Guidance Notes for Prospective Partners Completing a Grant Application and Proposal Form for Knowledge Transfer Partnerships’ (latest version available on the KTP Portal) when completing a full Proposal.

The sections below provide checklists that should be referred to before submitting a full Proposal.

A For Partnerships/KTP Offices

In order to avoid rejection of the full Proposal during the submission phase, and to ensure it will be considered at the next PAG meeting, please make sure you can answer ‘Yes’ to all the following activity.

Serial Activity1 Has the full Proposal been preceded by a corresponding Outline Proposal?2 Has the Outline Proposal been supported and 100% financial support

identified?3 Does the full Proposal contain any adjustments/amendments raised in the

feedback provided by Sponsors/Advisers in the Outline?4 In the case of a resubmission, does the full Proposal content address all the

issues raised previously by the Regional Group and/or the PAG? 5 Has the final iteration of the full Proposal form been cleared for submission

by the nominated KTP Adviser?6 Does the Partnership understand that it is the first version of the Proposal

form submitted electronically that will be included in the PAG Papers for consideration? Once submitted, further updates for the same closing date are not permitted.

7 Is the Partnership able to submit both Parts A & B of the full Proposal, using MS Word by email before the deadline?

8 Is the Partnership able to provide a signed hard copy of the Proposal by the required deadline?

9 Has the Proposal been submitted using the current latest version of the Grant Application and Proposal Form (available via the KTP Portal)? Both Parts A & B must be on the latest version. It must be submitted using MS Office.

10 Have any supporting documents also been provided electronically to the KTP Programme Office prior to the closing date deadline?

Failure to be able to answer ‘Yes’ to all of the above will result in your submission being rejected.

B For KTP Advisers


In order to avoid rejection of a full Proposal during the submission phase it is important that the Adviser is satisfied that the guidance provided with the latest version of the Grant Application and Proposal Form has been followed. To ensure it will be considered by both the Regional Group and the PAG please make sure you can answer ‘Yes’ to all the following activity, before agreeing that the Partnership may submit a full Proposal.

Serial Activity1 Has the full Proposal been preceded by a corresponding Outline Proposal

for which you have given your full support?2 Has the corresponding Outline Proposal been supported by Sponsors and a

complete response received from all identified Sponsors, and has 100% financial support been confirmed?

3 Does the full Proposal contain any adjustments/amendments raised in the feedback provided by Sponsors/Advisers in the Outline?

4 Has the Adviser provided feedback on the Outline and has Section 10 of the Portal process been marked as Supported?

5 Does the corresponding Outline appear in the Portal History as ‘Supported’?6 In the case of a resubmission, does the content of the full Proposal address

all the issues raised previously by the Regional Group and/or the PAG? 7 Have you, as the nominated KTP Adviser, approved the final iteration of the

full Proposal form being submitted by the Partnership?8 Does the Partnership understand that it is the first version of the Proposal

form submitted electronically that will be included in the PAG Papers for consideration? Once submitted, further updates for the same closing date are not permitted.

9 Is the Partnership able to submit both Parts A & B of the full Proposal, using MS Word by email before the deadline?

10 Is the Partnership able to provide a signed hard copy of the Proposal by the required deadline?

11 Has the Proposal been submitted using the latest version of the Grant Application and Proposal form (available via the KTP Portal)? Both Parts A & B must be on the latest version. It must be submitted using MS Office.

12 Is the full Proposal form free of ‘form abuse’?13 Have any supporting documents also been provided electronically to the

KTP Programme Office, prior to the closing date deadline?14 Are you able to provide a supporting Adviser Recommendation form (Rev.

January 2009) to the KTP Programme Office in support of each full Proposal, prior to the deadline which is agreed, set and published each year?

In the unlikely event that the KTP Adviser is unable to say ‘Yes’ to all the above activity, the Adviser must inform the Partnership of the reasons why the Proposal will not be included in the next set of PAG Papers.

The Partnership may be able to address these issues satisfactorily before the closing date.C For the KTP Programme Office

In order to avoid rejection of a full Proposal and ensure it will be considered by the Regional Group and/or the PAG, staff at the KTP Programme Office must be able to answer ‘Yes’ to all the following activity.

Serial Activity


1 Has the full Proposal been preceded by a corresponding Outline Proposal?2 Has the Outline Proposal been supported and a complete response received

with 100% financial support identified?3 Does the corresponding Outline appear in the Portal History as ‘Supported’?4 Has the Programme office received both Parts A & B in MS Word of the form

by email? 5 Has the latest version of the form been used both for resubmissions and

new full Proposals?6 Can both parts of the application form be read by the word reader and can

the information be downloaded to the database?7 Has the Partnership also provided a signed copy of the Proposal by the

required deadline?8 Has the Proposal been submitted using the latest version of the Grant

Application and Proposal form (available via the KTP Portal)? Both Parts A & B must be on the latest version. It must be submitted using MS Office.

9 Have any supporting documents also been provided electronically to the Programme Office, prior to the closing date deadline?

10 Has the supporting Adviser Recommendation form (Rev. January 2009) been provided to the KTP Programme Office in support of each full Proposal, prior to the deadline?

In the unlikely event that staff at the KTP Programme Office are unable to report ‘Yes’ to all of the above activity, they will email the KTP Adviser as soon as is reasonably possible with the reasons why the Proposal will not be included in the next set of PAG Papers. Programme Office staff may be able to accept further supporting correspondence provided it is received before the closing date deadline.

The KTP Adviser has responsibility for informing the Partnership, not the KTP Programme Office.

2.2 REQUIREMENTS OF THE FULL PROPOSAL - THE PROCESS IN BRIEF

1. Purpose of the application form

The purpose of the application form is to:


Enable members of the Regional Groups and the PAG, the KTP Programme Director and the TSB to make decisions about support.

Provide a statement of agreement between the three parties (company, Knowledge Base organisation and Government Sponsor(s).

Demonstrate that the KTP Programme has been fully planned and thus that the project team members, especially the Associate(s), have an adequate starting point.

2. General requirements of the application

The general requirements of the application are that it:

Is legible and comprehensible.

Conforms to the required format and is accompanied by an Adviser Recommendation and any other supporting documentation.

Demonstrates that both partners comprehend implications and are committed.

Has clear aims, objectives and work plans.

Demonstrates that projects and financial arrangements are feasible for the Company Partner.

Contains projects within the capability of Academic Partners but will extend their knowledge and skills.

Has projects that will stretch Associates over the period of partnership.

Provides significant benefits for all parties (company, university/college, graduates) which should be apparent and, preferably, quantified.

Where appropriate, IPR agreements should be developed.

The Full Proposal Submission Process in Brief


2.3 RECEIPT OF SIGNED COPIES OF NEW PROPOSALS

If a signed copy of the Joint Commitment Statement in Section 13 and the Declaration in Section 14 relating to that proposal has not been received by the KTP Programme Office at AEA, before 1230 hrs on the closing date for submission of new proposals it will not be included for consideration by the PAG.


If sent by normal post, the envelope should be addressed to the KTP Programme Office, AEA, B329, Harwell, Oxon OX11 0QJ. Please avoid including a person’s name as this may result in delay and the proposal missing the deadline.

If sent by Fax use 0870 190 6320.

2.4. REPORTS ON PREVIOUS KTP ACTIVITYCompany Partners often take part in KTP on more than one occasion. When a new proposal is submitted for consideration it must be accompanied by a report on all previous KTP project activity.

The KTP Adviser bringing forward the new proposal is responsible for compiling this report which must include:

The Partnership details. Start and end dates. Programme objectives. Outcomes/benefits to all three parties. The Knowledge Base. The Company Partner. The Associate(s). An explanation of the difference between the new proposal and that which has

previously been undertaken, including reference to any apparent overlap of activity.

Include details of the KTP Adviser compiling the report and date.

2.5 GUIDE TO ADVISER ACTION FOLLOWING THE PAG MEETING

General

Following the consideration of proposals by the Partnership Approvals Group (PAG), draft minutes are produced and emailed to PAG members and all KTP Advisers. Grant Offer letters may not be issued until the TSB has approved these minutes and, where appropriate, conditions have been addressed to the satisfaction of the KTP Programme Director.

Three courses of action may follow:

1. Not Supported

The regional group and the PAG may have decided to ‘Not Support’. The KTP Adviser will use their copy of the ‘Group Evaluation Record’ as sent to them by the regional group co-ordinator together with the draft minutes in order to determine what further action should be taken. Both parties will receive written confirmation from AEA, that the Partnership had been unsuccessful on that occasion. A proposal ‘Not Supported’ may be resubmitted on one further occasion. The KTP Adviser will contact Partnerships within a few days of the meeting to provide them with detailed feedback and with the options open to them to facilitate further progress. A copy of


the Group Evaluation Record or the PAG minutes will not be provided to Partnerships.

2. Amendments required by the regional group and/or PAG

The regional group and/or PAG may have supported the proposal but requested some amendments be made to the proposal. These must be addressed to the satisfaction of the KTP Programme Director before a grant offer can be made. PAG support for the proposal remains open for a period of six months following the meeting. Advisers must inform the Partnership of the issues to be addressed and make clear that if a grant offer letter has not been issued before this six-month cut-off point then it will be reported at the following PAG meeting as ‘Not Proceeding’. KTP Advisers should inform the KTP Programme Office of the reasons why a Partnership has been unable to address the issues in the time allowed and will not be proceeding.

Amendments must be channelled through the KTP Adviser to the KTP Programme Office. When satisfied that the amendments are complete, the Adviser will communicate with the KTP Programme Office at AEA, by forwarding the amendments to the PAG requests together with confirmation that all issues have been addressed.

It is strongly recommended that the KTP Adviser provide separate emails or letters to the KTP Programme Office for each proposal. Each Adviser letter/email of support should include the details of the Knowledge Base and Company Partner, together with its reference number and date of PAG meeting.

The KTP Adviser will be advised if the KTP Programme Director is not satisfied with the information provided, otherwise a copy of the grant offer letter will be provided.

3. No amendments required

KTP Programme Office staff at AEA, will have identified these proposals and a grant offer letter will be prepared for issue immediately the PAG minutes are approved. The KTP Adviser or KTP Office at the KB is not required to take any action.

2.6 ACCEPTING THE TERMS & CONDITIONS OF THE GRANT OFFER LETTER

Partnerships are reminded that the offer of grant remains open for a period of one month from the date of the Offer Letter and acceptance constitutes agreement in full to the terms and conditions contained within it. It is particularly important for those staff who are authorised to sign on behalf of the Knowledge Base Partner that they read carefully the information contained within it, even though they may have been involved in KTP on a number of previous occasions. This is particularly important when the Partnership requested additional funding but the Partnership Approvals Group did not support the request.

2.7 EXPLOITATION OF THE IP AND OUTCOMES FROM A PARTNERSHIP


KTP receives a very small number of enquiries from Company Partners who believe that clauses contained within the KTP Grant Offer Letter restrict the ability of the company to compete competitively in a global market, and prevent the company from fully exploiting the outcomes gained from participating in a Knowledge Transfer Partnership.

The two clauses in question in the current KTP Grant Offer Letter are:

The TSB requires the Knowledge Base Partner to make reasonable arrangements with the Company to ensure that any potentially valuable results obtained in the course of the Partnership are exploited by the Company, the Knowledge Base Partner and/or other third party from within the European Union, including the arrangements for any Intellectual Property arising from or used in connection with the Partnership.

The Knowledge Base Partner or Company shall not exploit, or licence the exploitation of, the results of the Partnership outside those countries which, at any time during the exploitation period, form part of the European Economic Area during the period starting on the date of this letter and ending five years after the last date on which a KTP Associate was deemed to be available for work on the Partnership; unless the Knowledge Base Partner or Company has previously obtained the written consent of the TSB. The exploitation of the results of the Partnership shall not be deemed to include the sale outside the European Economic Area of goods manufactured within it.

The aim of these clauses is to enable European companies to gain full benefit from the Intellectual Property Rights (IPR) developed within the EU before companies from the rest of the world sell products using this IPR back into the EU and take the profit. The Government is content for the Partnership to work with a third-party European company if that helps in the exploitation process. The clause is also there to make a company think about maximising the benefits to the company and allow it time to gain a foothold in the world marketplace.

If a company believes that such clauses unfairly restrict the company from fully exploiting the outcomes from the Partnership then they can write to Mr Pete Munday at the TSB, outlining what is proposed and giving reassurance that the IPR etc has been safeguarded. The TSB would consider whether or not a waiver would be appropriate and inform the Partnership accordingly.

It is strongly recommended that KTP Advisers and Offices discuss this issue early on in negotiations so that the Company Partner has a clear understanding of the situation.

2.8 CHANGES TO PARTNERSHIP ACADEMIC SUPERVISORS

1. There have been an increased number of requests from academics to change the nominated academic supervisors on the database. These changes are generally


highlighted when an academic not previously nominated tries to book onto the supervisor’s workshop. Very often this occurs early on in the life of the Partnership which does raise some concerns regarding the expertise being made available to support the needs of the project team and justifying the cost of the academic provision made in the budget. The KTP Programme Director requires all KTP Advisers to be satisfied that such changes are essential and that the Regional Group would have supported the proposed new academic. 2. Partnerships must discuss proposed changes to Partnership Supervisors with the nominated KTP Adviser. The KTP Adviser will ask the Partnership to inform the KTP Programme Office of any agreed changes of the academic supervisor without delay. This will keep the database up to date and allow the booking of the right people onto Supervisors Workshop, allow Associate vacancies to be posted and new Associates to be registered using the website portal. Requests cannot be made to the database without formal notification from the KTP Adviser. Requests for such a change should be sent to Julia Bottomley.

2.9 PARTNERSHIP MONITORING REQUIREMENTS 1. The following paragraph (there might be slight variations in older versions) can be found in the KTP Offer Letter, ie:

“The Knowledge Base Partner shall keep proper records of all expenditure incurred and defrayed on the Partnership and shall on demand produce to the TSB or to the KTP Programme Office, all books, papers, invoices and documents necessary to support the same and give to the TSB or the KTP Programme Office all such information as they may reasonably require.”

2. Information required to be held:

The Offer Letter, signed acceptance and any amendments to the Offer Letter that may be made during the life of a project.

Copies of the Local Management Committee (LMC) meetings and papers relating to the management of the project considered by the LMC.

Copies of the grant claims made together with a signed copy of Schedule 3 (Auditors of the Offer Letter).

Records relating to the financial contribution made by the Company Partner. A spreadsheet setting out the project expenditure over the life of the project. The Final Report by the Knowledge Base Partner and Company Partner. The

Associate Final Report, if lodged with the Knowledge Base Partner.

3. Academic and secretarial support:

Evidence of Academic time spent on the project, such as timesheets and wage extracts for all wages and salaries, or contracts stating that they worked fully (or for a specified 10% of their time, ie the Joint Commitment Statement) on the project.

4. Associate employment costs:

Evidence of payments for the Associates/graduates. 5. Travel and subsistence/equipment, consumables and other costs:


Evidence that the expenditure was incurred and defrayed, ie invoices for any direct costs on the project and evidence of payment made. 6. Overheads:

Any evidence for the overheads claimed on the project.

7. Outputs of the Programme: Beneficiary (Associate) registration form, showing their name and address, their

ethnic origin and their employment status. Where qualifications are claimed in the Final Report, evidence of qualifications

achieved. Company registration form, showing the registered name, trading address and

number of employees. Evidence of training, guidance and support given to the beneficiary during the

placement. Evidence of any additional professional and technical training undertaken by the

Associate. Knowledge that the company, on project completion, employed the Associate.

2.10 INFORMATION TO HELP INITIATE A KTP1. The following information is sent out with the Grant Offer Letter to the KB Admin linked to the Partnership application and should be disseminated to the Academic and Company Supervisor.

2. KTP Supervisor Handbook: Managing Knowledge Transfer Partnerships

This handbook is aimed at giving guidance on good practice in Knowledge Transfer Partnership management. Please discuss its contents with other members of your team. A similar handbook will be provided to your Associate(s) and it is recommended you have early discussions about the actions suggested in both handbooks. To access these handbooks, please visit the KTP Portal (Supervisor and KB Admin User Area.

3. Support available to Partnerships to facilitate the appointment of KTP Associates

You should be aware that your Partnership will be featured on the KTP website for a period of one month to inform potential Associates of the latest opportunities within Knowledge Transfer Partnerships. In addition, Partnerships may advertise Associate vacancies in detail and access a database register of individuals who have expressed interest in being recruited as KTP Associates.

Firstly, in order to post vacancies for Knowledge Transfer Partnerships and to view Associate profiles, the Knowledge Base Partner will need to register on the Portal as a 'Partnership Administrator' or Partnership Supervisor if they have not done so already. Once your account has been approved (this would normally take 24 hours) you can post vacancies and view Associate profiles for the Partnerships with which you are associated.

4. Supervisors Attending a Workshop


Supervisors are reminded that by signing the Joint Commitment Statement of the KTP Proposal and Application Form the individuals identified as Company and Knowledge Base Partner Supervisors are committed to attend jointly, after approval of their respective Associates' project(s), a KTP Supervisor Workshop. Supervisors identified in the Proposal Form should have already received a separate invitation to attend by email. Please note that payment of claims will be delayed until they have attended the KTP Supervisor Workshop. If you have yet to receive this invitation or have yet to attend a Supervisor Workshop for your Associate(s), please contact the KTP Programme Office (telephone: 0870 190 6224). Only the Supervisors linked to a Partnership and recorded as such on the KTP database may book a place on a Workshop through the KTP Portal.

5. To Register an Associate

The Registration of a KTP Associate is a two stage process. The first part being completed on the KTP Portal either by the KB Admin linked to the Partnership or either of the Supervisors. Once stage one is completed the Associate will be sent an automated email from the Portal requesting them to complete stage two. Associates must not attempt to register directly through the website.

6. KTP Associate Development Course

KTP Associates must undertake the KTP Associate Development Course. This is organised by the KTP Programme Office at no cost to the Partnership budget. Further information on the modules that comprise this course is available to the Associate once they have registered online. Associates will be able to achieve a Diploma in Management by completing the development course and any associated course work.

7. Introductory Module

This online module is to be completed by KTP Associates during the first month of their Associateship. A password is required to gain access and will be provided once the Associate has registered. If help is needed please contact the KTP Programme Office (telephone: 0870 190 6799).

2.11 GUIDE TO REVISIONS AND EARLY COMPLETION OF PARTNERSHIPS

1. General

1.1 Various situations may occur to a Knowledge Transfer Partnership during its lifetime. The more challenging issues to be resolved can include the Associate leaving early and the company partner withdrawing.

1.2 The Grant Offer Letter (GOL) requires the Partnership to take action immediately when an event occurs which will, or is likely to, result in progress towards completion of the Partnership ceasing or being delayed, for example the resignation of a KTP Associate. The Knowledge Base Partner is required to notify the TSB without delay, normally by notifying the KTP Programme Office at the address given in the GOL, about the occurrence of the event and the action, if any; it proposes to take in order that progress is resumed.


1.3 When notifying delays in progress and preparing the case for action, the Partnership need to bear in mind the aims of KTP in delivering benefits to all three parties – a company, a knowledge base organisation and a graduate. The guiding principal should therefore be to take actions that maximise these aims.

1.4 Before the Local Management Committee (LMC) decides on which course of action to undertake early discussions with your nominated KTP Adviser is essential. The KTP Adviser must agree to endorse any such actions and will consider the following LMC Guidance.

2. Guidance for the LMC Requests for additional funding and/or time extensions

2.1 The approval of any additional funding or time extension to complete the Project(s) is exceptional. If the Local Management Committee wishes to seek additional funding or a time extension for the original Partnership the following should be noted.

Normally, additional funding will only be considered in cases where an Associate has resigned within the early months of an Associateship.

No application will be considered within three months of the end of a Partnership.

Additional Government funding will not be provided to enable Associates to complete their Projects after the end of their contracts. It is expected that any funding for this will be provided totally by Company Partners.

Confirmation that the company is prepared to contribute to its share of the costs involved is required before a revision request is commenced. A letter from the company is required and should be attached to the application made via the Portal.

Any additional grant funding awarded should be complemented by additional funding from the Company Partner in a proportion at least as large as the proportion of company funding contribution provided to the original budget.

If an Associate leaves towards the end of his Associateship, the partners may apply to ‘finish off’ the Partnership, whereby another person can be employed to do the work but he/she is not classed as an Associate.

2.2 In practice there are three approaches to consider:

Approach 1

The Partnership closes.

Approach 2

A case is made for a replacement Associate to be appointed and for the Partnership to run for a further 12-36 months (additional funding may be sought.)

Approach 3

A case is made for use of some of the remaining funds to realise a large part of the Partnership objectives, and at least secure benefits to two out of the three parties.(This might be for example by employing a research assistant to complete the work or by releasing more academic time. Without an Associate present, this approach is


less satisfactory than Approach 2 in some respects, but it may deliver the hoped for benefits to the two remaining parties and maybe some benefits to a research assistant)The case should state what work is to be done and the benefits, what funding is required, normally from within the existing budget, how many months it will take and who is going to do it (note that it cannot be a company employee).

Which approach to pursue depends upon each case and should take into account the circumstances and the views of the company and knowledge base partners.

2.3 Possible scenarios are:

The Associate leaves near the end of the Partnership, with most of the objectives realised. Approach 1 may be preferred with perhaps just local initiatives to round things off.

An Associate leaves during the first few months. Approach 2 may be favoured.

The Associate leaves at a key point during the implementation phase near the end of the Partnership. Approach 3 may be appropriate.

The company partner withdraws. This would normally result in the end of the Partnership, but there may be exceptional cases where a short continuance - i.e. Approach 3 - would allow the agendas of the knowledge base partner and the Associate to be more fully realised.

In practice, Approaches 2 and 3 will always require the case to be made to the KTP Programme Office using the Online Revision via the KTP Portal and approved before work is commenced. Advisers should of course use their knowledge of the particular circumstances and their judgement to decide whether either course of action is in practice desirable. Certainly Approach 3 is not intended to be a way of “using up remaining grant money” and should be driven by the implementation of the project.

3. Guidance for the LMC Requests for Virement

3.1 In August 2007 a revised KTP grant offer letter (GOL) was introduced which included some important changes in this area. The LMC is now permitted to make decisions about Virement above the old 20% rule limit, without having to make a formal request to the KTP Programme Office. Any decisions about Virement must of course have the support of the nominated KTP Adviser.

3.2 The extract from the new Grant Offer letter is repeated below.

‘7. The Knowledge Base Partner may, subject to the agreement of the Local Management Committee (LMC) for the Partnership and recorded in the LMC minutes, together with the written agreement of the KTP Adviser, vire between the Travel and Subsistence and Equipment categories, also funds may be vired from either of these categories into the Associate Development category, but may not be vired from it, within the amounts indicated in Schedule 1 for each category by transfer from other categories, and subject to the needs of the particular project, except that, funds may not be vired into or out of the ‘Associate(s) Employment Costs’ category or into the ‘Academic and Secretarial Support’ category. Also, funds identified in Schedule 1 as being provided for indirect costs must be used solely for that purpose and funds so identified as being for direct costs must be used solely for that purpose’.


Please note:

No Virement may be made from the Associate Development heading. The decisions made by the LMC must be formally recorded in the minutes of

the meeting and a copy of the LMC Minutes should be included as an attachment to the Revision application made using the KTP Portal.

Should the need to action a Virement fall in between LMC meetings then the KTP Adviser must make this clear in the appropriate comment box. Please note that where this has not been agreed in the last LMC minutes, the Knowledge Base must enter the date of the last meeting.

4. How to Apply – KTP Portal

4.1 The KTP Portal has been developed to enable previously based processes and approvals, such as the payment of claims and the outline proposal process, to be undertaken online. The online portal processes have shown clear benefits to all users with enhanced clarity of process, improved turn around times for making and enabling access to historical data.

4.2 Rrequests for Revisions and Virement are to be made by making use of the Supervisor/KB Admin User Area of the Portal

4.3 Once agreement has been reached by the LMC that a revision is required the Lead Academic, if he/she does not have portal access should request that the KB Administrator, or Supervisor linked to that Partnership submit an online request via the Supervisor/KB Admin User Area Portal on behalf of the Partnership. The attached User Guide is to be used to support applications.

4.4 Julia Bottomley from the KTP Programme Office (0870 190 2879) remains responsible for the submission and approvals process for Revisions and is available to provide help and support to Portal Users. Julia will issue revised Grant Offer Letters as and when appropriate.

4.5 Chris Bridger (0870 190 6134) remains responsible for Virement only. The Partnership Administrator (KB Admin) will receive an email from Chris once a Virement has been approved. The receipt of the email must be acknowledged, via a provided link.


2.12 THE FINAL REPORT PROCESS1. Each Partnership Final Report, including those submitted by Associates, is sent to a minimum of two External Assessors for grading. These External Assessors are independent of the KTP Stakeholder community and are drawn from a mixture of academic, public service and business backgrounds.

2. As well as copies of the Final Reports, each Assessor is also sent a copy of the KTP Advisers’ Commentary. The Commentary is compiled from reports made throughout the lifetime of the Partnership after each LMC and, in addition, provides further comments on the Final Reports.

3. Partnerships are reminded that in the event of a Final Report not being submitted, the Partnership will not be graded. Even if the Partnership Final Report is received, non-receipt of an Associate's Final Report may be reflected in the overall final grading awarded by the External Assessor.

4. Every time a Partnership fails to submit a written Final Report on the Partnership, KTP loses valuable information that is used to accurately measure the outputs gained from the project(s). A condition of the grant offer letter is that the Knowledge Base Partner shall, no later than one month after the last date on which a KTP Associate was deemed to be engaged on the Partnership, submit a final report on the Partnership.

5. The Knowledge Base Partner is reminded that the TSB is under no obligation to agree to the payment of the final claim if a satisfactory Final Report is not received.

2.13 THE FINAL REPORT GRADING PROCESS

The new grading process, which applies to all Partnerships graded after 1 July 2006, now involves a five-point scale, rather than the six-point scale to which you may be accustomed:

1 Outstanding 2 Very good 3 Good 4 Satisfactory 5 Unsatisfactory

A guide has been developed for Advisers and Assessors that illustrates the particular features of Final Reports and the resultant benefits from KTPs that are commensurate with each of the above grades. It is not intended to provide a tick-box approach to grading - individual assessment and evaluation of Final Reports is still paramount. The guide itself is confidential to the Advisers and Assessors. However, below are highlighted the type of issues that they will be looking for in the Partnership Final Report and the Associate Final Report in order to arrive at their decisions on grading.

Overall

Have the Partnership Final Report and Associate Final Report been submitted, are they well written and concise, do they all contain real substance with benefits fully quantified, and do they present a clear and consistent message? Have the


objectives for the Partnership been met or exceeded? Have the expectations of all three participants in the KTP - Company Partner, Knowledge Base Partner and Associate - been met or exceeded? Have all three participants achieved outcomes that are tangible and in line with or in excess of reasonable expectations? Have the Company Partner and Knowledge Base Partner achieved common goals through the KTP and are they continuing to develop their relationship?

Company Partner benefits

Has the KTP led, or will it lead, to changes in the way the company does business? How significant are the measurable benefits that the company has seen or will see relative to its size/turnover? Will all the benefits be fully realised within a reasonable timescale, and does the company have the ability and commitment to sustain the changes embarked upon? What evidence is there of these benefits, eg increased sales turnover and profit derived from improved market penetration, growth in investment in plant and machinery, staff recruitment and training and/or research and development, and/or improved management practice or operations or productivity? Has the company gained new knowledge/skills, new products/technologies/systems and/or new strategic/business/marketing plans?

Knowledge Base Partner benefits

How significant are the benefits that the Knowledge Base Partner has seen or will see? Will all the benefits be fully realised within a reasonable timescale? What evidence is there of these benefits, eg development of the institution’s teaching capabilities through the use of commercially relevant case study material, development of the institution’s research programme, and/or the IPR agreement established for the KTP giving rise to commercial benefits to the Knowledge Base Partner?

Associate benefits

Has the KTP enabled the Associate(s) to ‘grow’ professionally? Has the Associate(s) gained management and technical experience and developed academically? What evidence is there of these benefits, eg the Associate(s) has been offered employment in the Partner company or has achieved employment in a relevant field, the Associate(s) has completed the KTP training programme in full, the Associate(s) has gained higher academic qualifications?

In conclusion

The new grading process for Final Reports will provide greater clarity and consistency of grading. The guide to grading Final Reports is confidential to Advisers and Assessors. It is up to the KTP Partners to ensure the KTP achieves best results and the Final Reports reflect what has been achieved.

Advisers’ Commentaries and Assessors’ Grading Forms will continue to remain confidential to the KTP Programme Office, Regional Advisers and Sponsors, and we will not enter into debate over the final grading decision on a completed KTP.


3. ASSOCIATE SUPPORT

3.1 GUIDE TO ADVISER MEETINGS WITH ASSOCIATES & PROJECT TEAMS

1. Role of KTP Advisers

Nominated KTP Advisers try to ensure that KTP Partnerships make progress towards agreed Partnership objectives and report to the KTP Programme Director after each Local Management Committee (LMC) meeting. They advise on the implementation of KTP training and development policy and give support to Associates, especially with regard to their professional development.

KTP Advisers can be particularly useful in ensuring that the lines of communication between Associates, the Programme Facilitator, the Lead Academic and the Supervisors are working properly. They advise on the rules and procedures relevant to KTP and the conditions governing continual payment of the Government grant for a KTP Programme. They provide access to AEA’s, corporate experience and encourage best practice in knowledge transfer to optimise benefits for all participants.

The Partners should be encouraged to seek advice from Advisers, as appropriate, at any time throughout the project.

2. LMC meetings

The Adviser will usually meet the Associate(s) immediately prior to or after each LMC meeting for mentoring and coaching purposes, and to provide support to the Associate undertaking a Diploma in Management. The LMC should follow the format recommended in the Management Handbook for Supervisors, including reserved business. LMCs should:

Encourage all reports to be made in a timely manner and with a format and content appropriate to the meeting.

Review the project management arrangements being used by the team, consider their effectiveness and agree any changes.

Discuss progress towards the target objectives in detail. It is likely that some variation is required. This may be due to unforeseen problems, technical difficulties or opportunities such as emerging trends within the industry. The Adviser will facilitate the discussion including a risk assessment on any proposal, achievable targets, resource implications and commonality of understanding.

Agree the work plan for the next four months. Allocate the necessary resources to the project team including agreement to any

training needs and the involvement of additional specialist input. Encourage the Associate to take ownership of the project. Explore possibilities to widen the collaboration, such as student projects. Encourage ambitious but realistic targets. Encourage a wide participation in KTP activities. Encourage best practice.


3.2 APPOINTMENT OF KTP ASSOCIATESThe current general policy is that Associates are considered on probation for the first six months from the start of their project and that appears to be the case regardless of the length of the Partnership. This provides a check on the performance of the Associate. In addition, as most Partnerships are of 18 months’ duration or longer, the next three to six months are about becoming familiar with the project issues, and outcomes generally are few.

Secondly, where an Associate resigns from or leaves a two-year project within a year, the current policy allows for the recruitment of a new Associate and for the resetting of the grant amount so that the Partnership can continue and undertake the approved planned activities.

The TSB has standardised both of these cases so that the policy is:

Firstly, Associates who lose their post through the company withdrawing during the first half of the planned project period can be considered for an Associate position with another Partnership.

Secondly, and depending upon the case, the TSB will consider resetting the grant where an Associate leaves within the first half of the planned project period, thus enabling the whole project (as originally approved) to be undertaken.

If you need further advice on these issues please contact Mrs Julia Bottomley on 0870 190 2879 or the KTP Programme Office.

3.3 ASSOCIATE SALARY LEVELS AND ‘TOP-UP’ BY COMPANY PARTNERSOne of the aims of Knowledge Transfer Partnerships is to encourage a lasting and continuing relationship between the company and the Knowledge Base Partner. It starts with the joint development of the project definition and application, which includes the outline job specification for the Associate. The Partnership is expected to jointly review the applicants and select the most appropriate person to be the KTP Associate on each project. The salary offered in the Associate job advertisement should reflect the going market rate for the particular post. For each KTP Associate, Government makes only a contribution towards the costs of their employment, with the balance of the costs coming from the company. During reserved business at the KTP project Local Management Committee meetings, the Knowledge Base Partner and Company Partner are expected to agree the most appropriate salary for the KTP Associate and any increases deemed applicable. In arriving at that figure, the going market rate, project progress and the salary rates in the Company and Knowledge Base Partners should be taken into account. The company is expected to top up the salary in order to attract the most appropriate individual to the Associate post and obtain the best possible outcomes. The company, therefore, has a monetary interest in the project as well as in the outcomes.

Partnerships are reminded that Section 8 of the KTP Grant Application and Proposal Form requires the Company Partner to consider making a top-up to enhance the salary of the Associate, in order to recruit an individual with the appropriate levels of


mailto:[email protected]

qualifications and experience from the job market. Your attention is drawn to Section 4.3 of the Handbook for Managing Knowledge Transfer Partnerships, which deals with the issues of an Associate’s contractual arrangement.

3.4 AGE DISCRIMINATION ACTThe wording used to describe a KTP Associate in all media, written and spoken, needs to comply with the Age Discrimination Act.

The following has been agreed and complies with the new law with the body monitoring the Act. A KTP Associate should therefore be described as:

‘ A person qualified at NVQ Level 3 in an appropriate subject (HNC/D or equivalent) up to PhD, who has the potential to be a business leader of tomorrow.’

This wording still suggests relatively inexperienced people.

3.5 ASSOCIATE TIME MANAGEMENTA small number of instances have occurred where the Associate has been diverted from the KTP project to undertake some additional research project on behalf of an Academic or to carry out additional tasks within the company outside of the objectives of the KTP project. This clearly has the potential to jeopardise the objectives of the KTP project. KTP Advisers and Offices should, where necessary, remind both Partners that they are responsible for ensuring that the Associate(s) will not be diverted from KTP-related activities, other than to spend approximately 10% of their time on appropriate formal training and personal and professional development activities. These will include the KTP Associate Development Course and achieving the Diploma in Management.

Partnerships may not charge out any part of the Associate’s time to the Company Partner’s customers. Please contact your KTP Advisers if there are any indications that the Associate’s time is being spent on inappropriate activity.

3.6 OBTAINING A HIGHER QUALIFICATIONWhen a Partnership decides the profile required of the KTP Associate it should also consider offering the opportunity to work towards obtaining a higher level qualification.

It is recognised that a large proportion of learning acquired by an Associate undertaking a KTP project is at least at Master’s degree level. It is possible to adopt the principles of work-based learning to assign academic credit points to the learning accumulated by an Associate during a project. If the project duration is two years or more the project activities can be used to determine a programme of learning which leads to a postgraduate award (normally an MSc).

Some Associates may find it more appropriate to register for higher degrees by thesis. Companies normally allow the material produced during a project to be used


for higher degrees (although, for reasons of confidentiality, they may impose limitations on its circulation) provided that the writing of a thesis is done in the Associate’s own time. Changes in the directions of a project may hinder the attainment of a higher degree by this route.

All Supervisors are expected to advise and assist Associates wishing to achieve higher degrees/qualifications.

Contributions up to £700 (£1,700 if the Knowledge Base Partner is not a Higher Education Institution or FE College) per Associate towards degree registration and examination fees may be paid, at the discretion of Local Management Committees, out of the standard ‘training’ budget of Knowledge Transfer Partnerships.

3.7 PROFESSIONAL MEMBERSHIP FEES FOR KTP ASSOCIATES

The Associate development budget within the KTP project costs are there for the Associate to manage subject to the agreement of the Local Management Committee through the Personal Development Plan each Associate draws up. The Supervisor's Handbook indicates that CPD apart of membership of a Professional Institution is a legitimate activity and also suggests that the Supervisor acts as a mentor to the Associate. The costs for membership are, therefore, a legitimate cost in order for that to happen, along with the other developmental activities identified by the Associate and agreed by the LMC.

4. PROJECT TEAM SUPPORT

4.1. SELECTION OF ACADEMIC STAFF TO SUPPORT PARTNERSHIPS

Previous policy was that the academic team had to be made up from full-time members of the university’s teaching staff. It was recognised that in the past this may have excluded individuals who had expertise valuable to a Partnership but worked part time. To redress the balance, it was agreed to allow part-time members of the university teaching staff to become members of a KTP project team. It must be clear, however, that individuals had sufficient capacity to support the needs of the project team.

We have been requested to expand on this explanation as to who would constitute an acceptable part-time member of the university teaching staff. Clearly such an individual must be able to demonstrate that they have sufficient time available to meet the commitments made by the university to the Company Partner, and the time required to make regular visits to the company premises, to support the needs of the project team and the Associate(s). Equally important is the capacity to feed back the experience into the wider teaching of the university. It would not be considered acceptable if an individual was contracted part time to deliver on a taught MSc or short course and was included in the academic team, but clearly had limited capacity to deliver these requirements.

Should you require further advice on the appointment of academic staff to Partnerships, please contact your local KTP Adviser or the KTP Programme Office.


4.2 ATTENDANCE AT A SUPERVISOR WORKSHOP KTP Advisers and Office staff are requested to remind Supervisors that by signing the Joint Commitment Statement of the KTP Proposal and Application Form the individuals identified as Company and Knowledge Base Partner Supervisors are committed to attend jointly, after approval of their respective Associates' project(s), a KTP Supervisor Workshop. Supervisors are also sent a reminder by email of the requirement to attend. This email is sent within a few days of the Partnership being approved by the PAG so it is particularly important to remind each Supervisor to book their attendance as soon as possible, especially when there are multi Associate projects. Please note that payment of Partnerships claims will be delayed until both Supervisors have attended the KTP Supervisor Workshop. The KB Admin linked to the Partnership is also copied in to this email.

Academic Supervisors, in particular, should be reminded of the mandatory requirement to attend, even though they may have previously attended on another project.

If a Supervisor fails to receive an invitation or has yet to attend a Supervisor Workshop for your Associate(s), please contact Anne Phillips at the KTP Programme Office (telephone: 0870 190 6224).

4.3 THE ROLE OF THE FACILITATORThe person appointed as ‘Facilitator’ to a Knowledge Transfer Partnership LMC has a key role in ensuring that the Partnership has the maximum possible impact on the company or organisation. This may be through support for the Associate, ensuring that company facilities are made available, communicating the objectives and importance of the Partnership to the wider company or protecting the Associate’s time from the demands of ‘non-project’ work.

It follows that the Facilitator should be a senior company stakeholder. The role does not present great demands upon the individual’s time but they must be kept in the communication ‘loop’ and invited to contribute to the direction of the project.

The Facilitator’s role is therefore quite separate from that of Company Supervisor or LMC Chair and the partners should be strongly encouraged to involve someone with the appropriate status within the company. Only in small companies should the role be taken by the LMC Chair.

The Facilitator’s Report at the LMC provides an objective overview of progress towards the key objectives of all the participants. It may be appropriate for the Associate to provide the data and for the Facilitator to provide objective comment.


5. ASSESSMENT OF AN ORGANISATION TO BE CONSIDERED SUITABLE AS A COMPANY PARTNER

5.1 KTP GUIDANCE NOTES ON THE ASSESSMENT OF THE FINANCIAL VIABILITY OF A COMPANY OR RTO AS THE POTENTIAL COMPANY PARTNER

Purpose of the Guidance Notes

1. KTP Advisers should use these Guidance Notes as a tool when considering whether a particular company (including not-for-profit), research and technology organisation (RTO) or Public Sector Research Institute (PSRI), as the potential ‘Company’ Partner, should be a participant in a Knowledge Transfer Partnership. RTOs include research-based organisations or institutes that may or may not receive funding from Government to undertake research.

Role of the KTP Adviser

2. At an early stage, and before any detailed proposal is developed, the Adviser should obtain and appraise financial information relating to the company or RTO. The information obtained should be assessed to determine whether further information or advice should be sought from Adviser colleagues, perhaps from the TSB, or elsewhere. Confirmation as to what financial information has been obtained and considered must be recorded in the Adviser’s Recommendation supporting the Knowledge Transfer Partnership Grant Application and Proposal Form being considered at a meeting of the Partnership Approvals Group (PAG).

3. In case the need arises, the accounts and any other financial information will be retained by the Adviser for future reference.

Role of the KTP Programme Office

4. The KTP Programme Office will check that the most recent set of audited accounts and later or alternative information, if appropriate, have been considered by the Adviser, and follow-up action will be taken if necessary.

5. No proposal will be included in the papers for a meeting of the PAG if it appears that appropriate financial information relating to the Company Partner has not been considered.

Financial information required

Companies

6. A summary of financial information about the company needs to be provided at Part A, paragraph 2.9, of the Knowledge Transfer Partnership Grant Application and Proposal Form.


7. The Adviser should obtain a copy of the company’s last two annual accounts, prepared in accordance with the Companies Act. Where applicable, the published report and accounts should also be obtained. These accounts will cover the last two financial years for which audited figures are available. Applicant company accounts must, in all cases, be dated less than nine months prior to the date of the appropriate meeting of the PAG. Whenever possible, parent company or Group accounts should be similarly dated but, if this is not possible, latest available audited or management accounts must be provided. In all cases, the PAG reserves the right to request additional information relating to the applicant, Group or parent company. If the financial viability of a company is in doubt, please discuss this with your KTP Adviser.

8. When more than nine months will have passed between the end of the last financial year for which annual figures are available and the date of the PAG meeting at which the proposal is likely to be considered, a copy of the latest management accounts or any interim accounts must have been obtained and considered by the KTP Adviser.

9. Advisers can, in exceptional circumstances, request management accounts from listed companies. However, these are likely to contain ‘price sensitive’ information and unauthorised disclosure must be guarded against. Nevertheless, since the Advisers are obtaining the information on behalf of the TSB, and because it is held in confidence, no question of disclosure of a company’s financial affairs arises, and no law, rule or code will be breached if a company provides a copy of its management accounts to a KTP Adviser.

10. The format of management accounts will vary from company to company. In most cases, a business’s management accounts can be compared to its annual accounts in order to determine trends. The management accounts to be obtained should be those prepared up to the end of the most recent complete month or quarter. Where this more recent financial information has been provided, it should be retained by the Adviser and referred to in the Adviser’s Recommendation. In general, over-prescription as to the information to be provided by the company should be avoided, as this might involve a company in incurring undue expense and effort.

Companies trading for less than two years

11. The above paragraphs are wholly applicable only when a business has been trading for over two years. Whilst extra caution should be paid to ‘young’ companies, they do not need to be excluded from Knowledge Transfer Partnerships just because they are new. Therefore, any annual accounts that are available should be obtained, together with summary trading and cash flow forecasts. Any other forecasts and projections covering the present period and the immediate future and extending beyond the likely end date of the planned Partnership may be useful; they may be in the form of a business plan that the company has used to secure funding. In such cases, the commentary as well as the figures will help the Adviser to assess the company’s prospects.

Research and Technology Organisations (RTOs) as Company Partners


12. A summary of financial information about the RTO needs to be provided at Part A, paragraph 2.9, of the Knowledge Transfer Partnerships Grant Application and Proposal Form.

13. RTOs may be limited by guarantee (not-for-profit) organisations but tax changes have resulted in limited companies being set up to deal with business facing activities in recent years. The current status should be checked during the initial discussions. Those RTOs that are not limited by guarantee should be treated as though they were a company. Advisers should obtain a copy of the annual accounts to enable the financial position of the RTO over last two years to be considered.

Assessment

14. Advisers should assess the financial information and form a view of the viability of the potential Company Partner, taking into account the likely financial commitment the company would have to make to any proposed Knowledge Transfer Partnership. Most cases will be straightforward. However, in some cases there will be a need for Advisers to consider carefully the financial position, beyond just considering the accounts. This may be necessary to gain greater confidence about an organisation before devoting time and effort, and that of the company or RTO, in working up a proposal for a Knowledge Transfer Partnership.

15. Good practice suggests that before visiting the company for the first time, Advisers should obtain financial information on the business and develop a line of questions to put to the company, based on the information obtained. It is also considered good practice to reconcile your opinion on the financial position of the company with that of the Knowledge Base Partner before visiting the company. The Knowledge Base Partner should have undertaken some assessment of the company, including credit checks, considering that it will be requesting the company’s contribution towards the cost of the project.

16. Use the accounts as the source for framing your questions – not necessarily the place where you will find all of the answers. When you receive an answer, make sure you understand it. If not, enquire further.

17. Consider the accounts in relation to the other information you have been given about the company. Do they fit together? Is the majority of the income due to one large customer? Does the company’s claim to promote its products extensively seem to be reflected in the level of marketing expenditure?

18. Does your impression of the company ‘on the ground’ endorse what its accounts and senior management tell you?

19. The company may be in receipt of a grant for R&D (SMART Award). It is acceptable for the award to be the precursor and complete before the KTP project starts or to run in parallel with the KTP project. In general, Advisers should ensure that there is no double funding where any grant funding is indicated.


Companies trading for more than two years

The basic financial tests indicated below and contained in Annex 1 are good practice tips which should enable Advisers to formulate the questions needed to satisfy themselves as to the financial position of the company.

20. The Adviser should look at the following aspects of the company’s accounts and form a view as to whether further advice and/or information is necessary.

21. Does the auditor’s statement qualify the accounts in some respect? If it does, the nature of the qualification should be noted, and further information sought or advice obtained as appropriate.

22. The notes to the accounts may be a pointer to some financial uncertainty that is not evident from just analysing the figures. For example, the profit & loss account should be checked for the inclusion, or exclusion, of exceptional or extraordinary items and their potential implications for the company’s financial position considered.

23. Check the company’s profitability to see if the company can afford to participate. The profit from normal trading activities in the two years covered by the accounts only should be considered. Note whether the profit in each of those years is less or only a little more than the funding that the company would need in order to contribute to the costs of the possible Knowledge Transfer Partnership.

24. Check the company’s liquidity. Are its current assets greater than current liabilities (amounts falling due within one year)?

25. Consider the company’s stability/gearing by checking its longer term funding position. The ratio between share capital and reserves to long-term borrowing such as loans, overdrafts, and creditors falling due after more than one year should be considered. As a minimum requirement, funding should at least equal borrowing.

26. The results of the ‘tests’ for liquidity and gearing can sometimes appear to be in conflict. If the company ‘fails’ one of them it is worth considering its cash position and the status of loans and bank overdrafts. The company’s cash-flow forecast over the next two years may help in determining the suitability of the company.

Companies trading for less than two years

27. For companies which have traded for less than two years the same rules are generally applicable, but greater emphasis will need to be attributed to the level of any profits generated to date and the forecast for the immediate future such as will be found in its Business Plan. It may be the case that the normal ‘tests’ suggested in the preceding paragraphs do not reflect a business’s current performance, and therefore there may be a case for attributing greater emphasis to the cash-flow forecast.

28. It is likely that Advisers will need to seek further advice and guidance in respect of these types of business.

Spin-out companies from a university or other public body


29. In order to be considered as a Company Partner, a spin-out company should operate on normal commercial terms. This means that it should not receive any public funding or subsidy and that any facilities and/or assistance provided to it should be on normal commercial terms. It would be difficult for a spin-out company to demonstrate that it was operating on a full commercial basis if its customer(s) was wholly a public body or bodies. It would need to show that any contracts won were done so on a commercial tendering basis. In addition, any profit that a spin-out company is making should be invested for its growth and not covenanted to a public body in any way.

30. Its independence should also be considered:

30.1. A company is considered independent unless 25% or more of the capital is owned or the voting rights controlled by an enterprise falling outside the definition of an SME, whichever may apply, or jointly by several such enterprises. It is possible for there to be several investors each with a stake of less than 25% in the company and it still to remain autonomous, provided these investors/companies are not a ‘linked enterprise’. (For a definition of a linked enterprise and the SME definition in general, see ‘The new SME definition user guide and model declaration’, published by the European Commission and effective from 1 January 2005. See also the calculation on how to determine the size of a linked enterprise.)

30.2. This holding is increased to no more than 50% if the investment is held by public investment corporations, venture capital companies, business angels, universities and non-profit research centres or institutional investors, including regional development funds and autonomous local authorities with an annual budget of €10 million and fewer than 5,000 inhabitants, providing no control is exercised either individually or jointly, or if the capital is spread in such a way that it is not possible to determine by whom it is held and they are not ‘linked’ (see para. 30.1 above).

Companies that are part of a group of companies or are owned by another company

31. If the proposed Company Partner is part of a group, financial information for both the Company Partner and the group should be considered. If the accounts are consolidated and the Company Partner’s accounts are not available or, in particular, concerns are raised about the Company Partner’s financial position, information on the group accounts should be provided with evidence from a senior executive in the group that the group will provide financial support to the proposed Company Partner for the duration of the proposed Knowledge Transfer Partnership.

“Applicant company accounts must, in all cases, be dated less than 9 months prior to the date of the appropriate meeting of PAG. Whenever possible, parent company or Group accounts should be similarly dated but, if this is not possible, latest available audited or management accounts must be provided. In all cases PAG reserves the right to request additional information relating to the applicant, Group or parent company.” If the financial viability of a company is in doubt, please discuss this with your KTP Adviser. 32. A company that is owned by another company or person(s) (common

directorships) or is a ‘linked enterprise’ should be considered together with its


parent and related companies, as this will affect its classification with regard to size. (Note paragraph 30 on the independence of a company.) It may be, in the case of linked companies, that the accounts are not consolidated. However, an overall view should be taken (the EU calculation will help here in determining company size). Inter-company loans and/or trading may indicate that it is part of a group or a linked enterprise where it is not, at first glance, apparent, as well may common directorships.

33. Where the ultimate parent company does not produce accounts, a substantive letter indicating support should be obtained to support the application, along with any accounts for the group that are published, so that a broad financial assessment can be made.

Research and Technology Organisations (RTOs) and companies limited by guarantee (not-for-profit) as the Company Partner

34. Advisers should be aware that enterprises that are limited by guarantee (ie ‘not-for-profit’ organisations) have no share capital and also may have no long-term borrowings. In addition to the assessment method used for companies, the following checks should be made.

35. Did the enterprise ‘break-even’ in each of the two years covered by the accounts? If it did not, any trend towards profitability should be assessed, together with the effect that any amount set against exceptional capital expenditure may have on this trend. If there is no trend towards profitability, and/or there was an exceptional capital item, then the advice of the TSB should be sought.

36. The impact of any grants provided to the enterprise should be considered. The percentage of existing public sector grants to turnover/income should be less than 25% in each of the years during which the enterprise may be participating in a Knowledge Transfer Partnership. Advice should be sought from the TSB if the figure of 25% is likely to be exceeded in any of the years.

37. Advisers should check if the business is in receipt of a Small Firms Loan Guarantee and that the award is not for any part of the proposed project.

Further Advice from the TSB

38. Where a company or RTO fails to ‘pass’ some of the checks suggested above, and an Adviser considers it has potential that is worth pursuing, further advice should be sought from experienced KTP Adviser colleagues, in the first instance. The advice of a KTP Programme Manager in the TSB may be sought but it should be borne in mind that the TSB does not have access to accountancy advice.

39. Where the TSB’s advice is sought, Advisers should send the fullest possible information to the KTP Product Manager. This should include the full annual report and accounts, which will include the notes to the accounts and, where appropriate, management accounts and/or the business plan (including any narrative) etc. In addition, Advisers should indicate the likely Associate profile and provide an estimate of any additional financial resources the company or RTO may require in order to fully support and exploit the Knowledge Transfer Partnership.


40. The TSB may give a positive view of a company or RTO’s likely viability as a KTP Partner on the strength of those checks which were ‘passed’, together with any positive comments from the Adviser; for example, “a successful company with a strong balance sheet, including a healthy cash balance, which shows a trading loss in the last accounts but which is realistically forecasting a return to profits”.

41. It should be noted that in the context of Knowledge Transfer Partnerships, TSB officials are not prepared to deal directly with organisations on matters concerning their accounts or financial position. It is the Adviser’s responsibility to liaise with them.

Adviser’s Recommendation

42. The Adviser’s Recommendation will include a statement confirming that the company or RTO’s most recent annual accounts and/or any additional financial information have been considered. Where those accounts, in the case of companies, cover a financial year which ended more than nine months before the date of the PAG meeting, a statement will be required that the company’s later management accounts or interim accounts and business plan, if appropriate, have been considered. The Adviser should add further comments about the organisation’s financial position when it is considered appropriate to do so, such as evidence of inter-company trading, other current liabilities which should be defined, unusual trading patterns, negative liquidity, long term inter-company loans etc, or information that appears to conflict with trends indicated by the figures.


Annex 1Good Practice tips

General good advice or comments

Before the first company visit

In general, the company should be able to afford to pay its share of the project costs and be generating sufficient resources to exploit the outcomes of the potential project.

Do not undertake a company visit before you have seen the accounts, including any recent accounts, management accounts, cash-flow forecasts or business plans you need.

Before visiting a company, reconcile your opinion on the accounts with that of the Knowledge Base Partner. They may have a more relaxed approach, but could be biased against the company because of credit checks based on old information.

Use the accounts as the source for your questions - not necessarily the place where you will find all of the answers. When you receive an answer, make sure you understand it. If not, enquire further.

Consider the accounts in relation to the other information you have been given about the company. Do they fit together?

Is the majority of the income due to one large customer? Does the company’s claim to promote its products extensively seem to be reflected in the level of marketing expenditure?

Formulating the questions

Look for the trends, not just the last set of figures. Three years’ figures would be better than two.

Where the business is a sole trader you might need to consider the net worth of the owner and assess the resources they can call on.

Look at the Directors’ statement (it does not form a part of the accounts but helps to form a view of the business and may raise some questions). Do look at the Auditor’s Opinion. Is it qualified in some way? If so, you will need to investigate and assess the risk that may be presented. When looking at a set of accounts, always read the notes for further information as these provide some explanations to the figures provided but may also be a source of questions or cross checks.

Remember that small companies can opt for the production abridged accounts, in which case, management accounts should assist in forming a view.

‘Cash is King’ - remember that profitability can be manipulated in many ways, but the cash or borrowing facilities available cannot.

Look at the Cash Flow Forecast - if the company does not have one, that is a concern.


If the company’s profit & loss and balance sheets are very poor but the company is in heavy debt to a venture capital (VC) company, you can investigate and perhaps find that the company is profitable at the pre-interest level (EBIT) and the VC company is happy with repayments. Obtain a letter from the VC company with a repayment forecast and an expression of satisfaction with the company’s performance.

With current year figures, do not look at just the current cumulative profit/loss for the year to date but also review the recent months’ trading (it is trends you are seeking). Look out for obvious anomalies in the accounts. Check the notes to the accounts and ask for clarification.

Look forward as well as back - ask about current and future order books.

If profitability/cash flow is problematical, can the KTP funds be ‘ring-fenced’?

High gearing (ie borrowed funds in relation to owners’ funds) can be good if profitability is increasing but bad if profitability is declining.

Take care with ‘trading companies’ and ‘holding companies’. A ‘trick’ is to show sound trading company accounts, with all the discrepancies held in the holding company.

What happens to the profits created by the business? Are they real? Are they turned into cash? Identifying who receives them may provide an indication as to the independence of the company.

Are there any hints of company commitments/loans/guarantees/inter-trading not visible within the figures (eg with ‘sister companies’)?

What are the major financial threats to the business?

Who are the major customers? Are there one, two, three or more? What is the balance of the business between these customers?

Does anyone else have ‘control’ over a company or its assets? Is it a group of companies with common shareholding/directorship? Is it a ‘linked enterprise’? Does this affect the KTP project?

Find out who has ultimate responsibility and make sure that they endorse the project.

The visit

Make sure the company managing director is acquainted with the numbers’ applying to the business and does not just read them from the accounts.

Is the business managed proactively and efforts made to affect the results or do the owners/managers simply preside over events?

Most issues are explainable and not fraud etc, but may be poorly represented.

Ask the managing director the same question in different ways to verify the facts.

Pretend to be uninformed, ask the obvious questions.


A side meeting may be necessary to discuss confidential financial information.

Does your impression of the company ‘on the ground’ endorse what its accounts and senior management tell you?

Balance sheet

Be clear on the ownership and funding of the company.

Are there any large numbers on the balance sheet relative to other figures, and how would a small percentage change in these affect the business?

Does the company appear to have enough in the way of net assets to be able to afford the investment in the KTP project - not just the Associate costs but all the other costs the project will lead to? Will it need capital expenditure to exploit the outcomes; for example, could the company finance it?

Valuing stock can be difficult. Although there are rules/guidelines, the figures can be a lot more subjective than others on the balance sheet.

When looking at negative liquidity, view it in relation to the company’s capacity to take on long-term loans, which might be used to improve the situation.

Consider the importance of liquidity and the short-term pressure, which might adversely influence decision-making.

How much liquid cash can the company have free from encumbrances, and is this compatible with the cost of the project?

A company will need adequate resources for expansion - perhaps to exploit the benefits for the KTP project - including working capital. Does it have such resources, or have plans for gaining them? Has this aspect been considered by the company?

Director’s loans may make up part of the funding of the business. If liquidity appears to be a potential problem, consider asking for a letter stating that these loans will not be repaid during the project.

Capitalising R&D (ie treating it as if it were the purchase of an asset and therefore not showing as an immediate cost to the profit & loss) can be risky. Does the company actually have an asset that it could sell at this stage?

Factoring of invoices and perhaps outsourcing credit control to a competent third party has the benefit of speeding up cash flow - but at a cost.

Do not just look at gearing, also examine the latest shareholders’ funds against what is owing to the bank.

Look for sensible and rising owners’ funds.


Profit and loss

Understand the financial model of the business - how does it make money?

Look at overall borrowing and consider interest obligations relative to profit generation.

Profit before tax is better for revealing trends as the percentage of tax a company pays may vary.

A good website for financial training can be found at: www.bized.ac.uk.

Gross and operating profit margins for a number of industries, as per the biz/ed website, are shown in the table below.

Gross Profit Margin Operating Profit MarginLeisure & hotel 9.64% 7.36%International airlines 5.62% 4.05%Manufacturers 35.14% -10.48%Retailers 11.41% 1.63%Discount airlines 27.46% 10.87%Refining 11.99% 12.63%Pizza restaurants 47.52% 7.55%Accounting software 89.55% 27.15%

NB. There is no reference given for the original source or date of these figures so they are presented as examples to promote thought rather than definitive facts.


http://www.bized.ac.uk/

5.2 FURTHER ASSESSMENT OF AN ORGANISATION TO BE CONSIDERED AS A SUITABLE COMPANY PARTNER1. General

KTP Advisers and KTP Offices have access to guidance, which provides information on what to look for when assessing a company’s financial viability and access to the latest individual Sponsors’ Criteria, contained within the KTP Strategic Plan. This information should enable the KTP Adviser to assess the suitability of an organisation to become involved in KTP. It is particularly important that the type of company/organisation, its business and the nature of the objectives of the project are considered at the same time as any financial viability issues.

2. Establishing the source and amount of income

When a KTP Adviser makes an assessment of an organisation’s suitability and eligibility to become a Company Partner, the KTP Adviser must be satisfied that whilst the company/organisation may receive direct funding from the public purse, it is able to generate sufficient commercial income from its own day-to-day business activity. The KTP Adviser must be satisfied that this income is sufficient to:

Cover the costs of the project itself. Enable the company to fully exploit and embed the outcomes. Ensure there is no double funding of the project as proposed.

If there are any doubts the KTP Adviser should seek advice from the KTP Programme Director who will, in turn, seek advice from the TSB if appropriate.

3. Sponsors’ criteria

When assessing the suitability of an organisation to become a Company Partner, the KTP Adviser must determine if the nature of the project and the type of organisation meet the criteria set out in the KTP Strategic Plan. The KTP Adviser must be satisfied that sufficient sponsorship is available to support the whole requirement that all responses have been received before developing the proposal further.

4. Summary

Early assessment of an organisation’s eligibility to take part in KTP requires all of these issues to be considered, and where eligibility or capability is in doubt the KTP Adviser or Office is encouraged to contact the KTP Programme Office to discuss it. An outline or full proposal should not be developed if issues of eligibility remain outstanding.


5.3 DEFINITION OF AN SME The TSB has agreed to adopt the latest (January 2005) EU definition of small and medium-sized enterprises (SMEs) as used in the context of EC State Aid rules. The revised definition is substantially the same as before but with higher turnover and balance-sheet thresholds. A summary is as follows:

For KTP purposes an SME is now an enterprise which has fewer than 250 employees and has either:

an annual turnover not exceeding €50 million oran annual balance sheet total not exceeding €43 million.

An enterprise is considered independent unless 25% or more of the capital or of the voting rights is owned by an enterprise falling outside the definition of an SME, whichever may apply, or jointly by several such enterprises.

This holding is increased to no more than 50% if the investment is held by public investment corporations, venture capital companies, business angels, universities and non-profit research centres or institutional investors, including regional development funds and autonomous local authorities with an annual budget of €10 million and fewer than 5,000 inhabitants, providing no control is exercised either individually or jointly, or if the capital is spread in such a way that it is not possible to determine by whom it is held and they are not ‘linked’ (see above).

Where it is necessary to distinguish between ‘small’ and ‘medium-sized’ enterprises, the definition of a small enterprise is the same except that the relevant number of employees is 50 and the turnover and balance sheet totals are both €10 million.

The three tests - workforce, turnover or balance-sheet total, and independence - are cumulative; all three must be satisfied. In calculating the thresholds it is therefore necessary to cumulate the relevant figure for the enterprise and for all the enterprises which it directly or indirectly controls through possession of 25% or more of the capital or of the voting rights.

The data to apply to the head count of staff and the financial amounts are those related to the latest approved accounting period and calculated on an annual basis. The amount selected for the turnover is calculated excluding VAT and other indirect taxes.

In the case of newly established enterprises whose accounts have not yet been approved, the data to apply are to be derived from a bona fide estimate made in the course of the financial year.

Where there is some doubt as to whether a company falls within the agreed KTP definition of an SME, the advice of a KTP Adviser should be sought in the first instance. They, in turn, can seek the advice of the KTP Programme Director who will, if necessary, seek advice from the TSB.

For full details of the SME definition please visit:http://ec.europa.eu/enterprise/enterprise_policy/sme_definition/sme_user_guide.pdf

6. BUDGET GUIDANCE


6.1 KTP PROJECT BUDGET GUIDELINES FULL ECONOMIC COSTING (fEC) 1. Introduction

These guidelines are designed to assist applicants in determining a proposed KTP project budget using full economic costing (fEC) within the HEI sector, and conform to Government policy. The old standard budget method and 46% overhead can still be used where fEC has not yet been implemented in the HEI or the institution chooses to use the old method. FE Colleges can still use the old standard budget method or, if they are linked to an HEI at which fEC has been introduced; choose to use the fEC method. Similarly, RTOs can choose either method.

The KTP Grant Application and Proposal Form includes a blank outline budget table which covers old standard and fEC cases, which needs to be completed before submission. Advice should be sought, generally about the application process and particularly about the proposed budget, from the nominated KTP Adviser and, if necessary, the KTP Programme Office prior to submission. The Partnership Approvals Group approves applications, and successful applicants are notified of the decisions through an ‘Offer Letter’ (which also sets out the regulations governing expenditure) addressed to the Knowledge Base Partner.

Each KTP budget is financed by a contribution from Government (in the form of a grant and not subject to VAT) awarded to the Knowledge Base Partner, with the Company Partner contributing to the balance of the project costs directly to the Knowledge Base Partner. The company has, in addition, to find its own cost of participation. The Local Management Committee (LMC), established for the particular Knowledge Transfer Partnership, controls the budget (within the regulations set out in the ‘Offer Letter’).

DEFINITIONS OF THE MAIN FEC TERMS ARE SET OUT ON THE NEXT PAGE.


2. Definitions of the fEC terms

Directly Incurred Costs

Associate Employment: These costs relate to the employment of the Associate, eg to salary, NI contributions, pension etc. Where there is more than one Associate project this figure should be the total cost for all of them identified in the Partnership proposal.

Associate Development: These costs are for each Associate to manage, through the LMC, and are for additional developmental training that is specifically required for the particular project identified. Training that helps the all-round development of the Associate is also covered by this contribution.

Travel and Subsistence: These costs relate to the travel necessary to undertake each proposed project. Guidance on submitting requests for additional funding is available in Section 6.6 of the Guidebook.

Consumables: These costs are a contribution towards those consumable items which are essential to enable the project to progress and be completed successfully. They can include the Associate’s PC but should not include capital items that the Company Partner will require after the project has been completed. Guidance on submitting requests for additional funding is available in Section 6.6 of the Guidebook.

Directly Allocated Costs

Knowledge Base Supervisor: This represents the cost of the appropriate ‘Academic’ in the Partnership and their indirect cost element.

Associate Estates Cost: Normally this will be zero as the Associate is located at the Company Partner’s premises. Some projects, however, occasionally involve project work undertaken in HEI facilities. Where this time is estimated to be between 20% and 40%, a realistic estimate figure should be used.

Mentoring: This cost may be applicable where an institution has made a KTP Application but has not participated before, or where there has been a long period since it last participated. The cost relates to the time spent by a member of staff from an institution which regularly participates in KTP, in helping the organisation new to KTP become acquainted with it. Under the old standard budget method this amount is £1,000. Mentoring costs under fEC are split between the grant and the company contribution. The Partnership will have to provide a satisfactory justification if mentoring was required on more than one occasion in particular where the KB Partner is an FE College.

Indirect Costs

Additional Associate support: These are the costs that relate to the management aspects of the Associate (such as learning resources, computing, personnel function, secretariat support to the LMC, etc).


3. KTP project budgets

The KTP project budget includes categories covering the costs directly incurred in carrying out the project (the Directly Incurred Costs resulting from employing the Associate). The Directly Allocated Costs are those costs allocated to the project by the Knowledge Base Partner for the support provided by the Knowledge Base Supervisor and, if appropriate, covering the use of laboratory or office space by the KTP Associate. Occasionally, Mentoring support for the Associate is required from individuals not from the Knowledge Base Partner itself; the costs of such mentoring are regarded as Directly Allocated Costs. The budget also includes a category called Indirect Costs to cover those additional costs incurred by the Knowledge Base Partner associated with employing the Associate and providing them with access to support facilities. The budget does not cover the costs (direct or indirect) of the supervision and support of the Associate given by the Company Partner. These costs are met exclusively by the Company Partner.

The total budget for a KTP project depends on the following four parameters:

The duration of the project. The plan of work to be undertaken. The geographical location of the Company Partner. The costs associated with the particular Knowledge Base Supervisor and the

department within the Knowledge Base Partner that is providing the main support.

Table 1 provides indicative budget figures for KTP projects lasting exactly 12 months. Figures for projects lasting more than 12 months can be obtained by multiplying on a pro-rata basis. The tables relate to ‘standard’ KTP projects, that is to those in which only base levels of funding are required for ‘Travel and Subsistence’ and for ‘Consumables’, and in which the work is undertaken entirely away from the premises of the Knowledge Base Partner. If the plan of work warrants it, higher than base levels may be proposed for ‘Travel and Subsistence’ and for ‘Consumables’ and costs for Associate Estates Provision may be included as Directly Allocated Costs. The rules for justifying additional funding change from time to time. The KTP Adviser should be consulted to obtain the most up-to-date position.

If the KTP project is based mainly at a company site in London, the ‘Associate Employment’ category of the budget is enhanced by £3,000 to enable the payment of a ‘London Allowance’ to the KTP Associate. Such an allowance is permissible only if the company site where the majority of the project work is to be carried out is within 16 miles of Charing Cross.

The Directly Allocated Costs and Indirect Costs should reflect the real costs to the Knowledge Base Partner of employing the KTP Associate and providing support. The amounts will vary between institutions and, possibly, between departments within institutions.

4. Outline budgets for ‘standard’ KTP projects

Table 1 shows outline budgets for ‘standard’ KTP projects undertaken at company sites based in the UK and London alluded to above. Immediately below that is the fEC funding model that is to be used to determine the KTP project budget. The notes below this Table 1 provide explanations of the entries in the correspondingly numbered rows of the table.


Table 1: Outline of ‘standard’ KTP project budgets

Directly Incurred Costs(see notes 1,2,3 & 4)

StandardBudget

London

Associate Employment (1) 27,000 30,000Associate Development (2) 2,000 2,000Travel and Subsistence (3) 2,250 2,250Consumables (4) 1,500 1,500Sub-total 32,750 35,750

Directly Allocated Costs

(see notes 5,6 & 7)Cost Factor Cost* Factor

Knowledge Base Supervisor (5) (SC) (F1) (SC)* (F1)Associate Estates Provision (6) (EC) N/A (EC)Mentoring Support (7) (M) N/A (M)Sub-total

Indirect Costs (see note 8) Cost Factor Cost* Factor

Additional Associate Support (8) (AC) (F2) (AC)* (F2)Total of sub-totals

Notes to Table 1 above:

(1) The amounts shown for ‘Associate Employment’ represent upper limits above which the grant does not make any contribution. Any expenditure on employing an Associate (salary plus additional costs) that exceeds these amounts must be met entirely by the Company Partner. Such ‘topping-up’ by the Company Partner may be desirable to attract an Associate with appropriate qualifications and experience.

(2) The amount for ’Associate Development’ is fixed at the level shown.

(3) This is the base-line figure for ‘Travel and Subsistence’.

(4) This is the base-line figure for ‘Consumables’. A Partnership may make a case for additional funds for the purchase of consumables that are considered to be essential to facilitate the successful completion of the project. The PAG is unlikely to support such a request where it is clear that the company can afford to bear the costs itself.

(5) The Knowledge Base Supervisor (SC) costs will depend on the nominated individual, the department and the institution which provides the Supervisor’s employment. Normally the Knowledge Base Supervisor will spend, on average, half a day per week in support of a project and thus normally the multiplying factor of these costs (F1) is typically 0.1. Very exceptionally, in cases where the Partners agree there may be a need for the Knowledge Base Supervisor to provide additional support, a higher value than (F1) may be proposed but is unlikely to be approved unless a justifiable case is presented.

(6) The Estates Provision cost for the KTP Associate is zero where a project is being undertaken exclusively away from the Knowledge Base Partner’s site. If a significant part of the Associate’s time (say 20% to 40%) will be spent


using facilities at the Knowledge Base Partner, a realistic estimate should be proposed.

(7) On occasions when additional mentoring support from an individual not employed by the Knowledge Base Partner is deemed to be appropriate, then the additional costs should be included as Directly Allocated Costs. The typical cost currently is £1,000. The cost is split between the grant and the company contribution.

(8) Normally the additional support given to the Associate is shared approximately equally between the Knowledge Base Partner and the Company Partner. Thus the factor (F2) used to multiply the Additional Associate Support costs (AC) incurred by the Knowledge Base Partner is typically 0.5. In exceptional circumstances a higher value than (F2) may be proposed, but is unlikely to be approved unless a justifiable case is presented.

5. Example budget and funding ratios

Table 2 shows example budgets for ‘standard’ KTP projects using hypothetical figures for the Directly Allocated Costs of engaging a Knowledge Base Supervisor as well as for the Indirect Costs of providing additional support to the Associate. The table assumes that the project is the first for the company.

The table also shows how the budget is split between the company and the Knowledge Base Partner. For a first-time SME the company contribution will be one-third (ie 33%), and for a large company the contribution will be a half (ie 50%).

Table 2: Sample budgets and financing for ‘standard’ KTP projects (assuming no mentoring support is required)

Annual Costs Annual CostsSME Large

Annual Amount

Government element @

0.67%

Company element @

0.33%


0.5%

Company element @

0.5% Contribution to Associate employment costs 27,000 18,090 8,910 13,500 13,500Associate development 2,000 1,340 660 1,000 1,000Travel and Subsistence 2,250 1,508 742 1,125 1,125Equipment, consumables 1,500 1,005 495 750 750Total Direct Costs 32,750 21,943 10,807 16,375 16,375

Directly allocated costsKnowledge Base Supervisor (1) 8,000 5,360 2,640 4,000 4,000Associate Estate costs 0 0 0 0Mentoring support 0 0 0 0

Indirect CostsAdditional Associate support (2) 18,000 12,060 5,940 9,000 9,000

Total 58,750 39,363 19,387 29,375 29,375

Notes to Table 2 above:


(1) An example figure is used here for the Knowledge Base Supervisor support costs. This is linked to the employment costs of the Knowledge Base Supervisor. Following on from table 1 an assumed KB Supervisor cost of £80,000 has been used and a factor of 0.1 to arrive at the £8,000.

(2) An example figure is used here for the costs of Associate support additional to that provided by the Knowledge Base Supervisor. This should also include the costs associated with providing secretariat support to the LMC. Following on from Table 1 the assumed Additional Associate support cost is £36,000 and a factor of 0.5 to arrive at £18,000.

Table 3: Sample budget total where the Company partner is located within London

Annual Costs Annual CostsSME Large

Annual Amount


0.67%

Company element @

0.33%


0.5%

Company element @

0.5%

Total 61,750 41,373 20,377 30,875 30,875

Notes to Table 3 above:In relation to Table 2 and additional £3,000 has been added to the Associate employment costs, all the other figures remained the same in order to arrive at the totals in table 3 above. The Directly allocated costs and Indirect Costs elements will reflected in the fEC element of the HEI involved in the Partnership so no addition is required.

6. Repeat project rates

The repeat project rates under fEC will be as follows:

Large companies The company contribution will be 50% where up to six Associate

projects are approved within a five-year period. For seven or more a rate of between 60% and 75% will be negotiated.

Medium-sized companies The company contribution will be 33% where up to five Associate projects are

approved within a five-year period. For between six and ten projects the company contribution will be 50% and for

over ten projects, the contribution will be 60%.

Small companies The company contribution will be 33% where up to four Associate projects are

approved within a five-year period. For between five and eight projects the company contribution will be 50% and for

over eight projects, the contribution will be 60%.

Health, Education and Local Government


Grant Rates for an NHS Trust it will be dependant upon the size of population it serves (break point remains 300,000 of population served). Less than 300,000 – classed as an SME. Greater than 300,000 would be considered to be a large organisation.

For Councils including LEAs and schools, a 50% grant rate will be applied.

7. ‘Zero Grant Funded Partnerships

Partnerships funded under fEC where ‘zero’ Grant is requested ie the company has agreed to pay all the project costs. The policy under TCS was that government paid £4,000 towards academic and secretarial costs and £500 towards the Associate development costs per year.

The policy for projects using fEC where ‘zero’ Grant is agreed is as follows:

For both an SME and Large Company, KTP Supervisors contract to spend 10% of their time in supporting the project per year. Where a ‘zero’ grant rate is agreed government will only contribute 0.67 of that cost, in the case of an SME and 0.5 of the cost, in the case of a large company partner: eg

(KB Supervisor cost* (F1))*.67 for an SME

(KB Supervisor cost*(F1))*.5 for a Large company

Note in both cases where F1 is 0.1 ie equates to 10% of the appropriate academic's time. The result is to be rounded up to the nearest £100.

Example (188,170*0.1)*0.67 = £12,607.39 amount entered on budget sheet £12,700

In addition £500 per year for Associate development is also allowed.


6.3 KTP STANDARD (NON fEC) BUDGETS, ELIGIBLE COSTS AND GRANT AMOUNTS APPLICABLE FROM JANUARY 2009

1. For KTP Programmes having more than one Associate project, the applicable amounts will be those derived by multiplying the amounts in the standard budget table by the number of Associate places approved for the Partnership in question. Budgets and grants for projects longer than one year will be derived by multiplying the standard budget by the number of years and parts of years, up to a maximum of three years, to obtain the amounts concerned (note the preferred interval is quarters of a year).

2. In certain cases, the amount of Eligible Costs against the 'Travel and Subsistence' and 'Equipment, Consumables' headings may be increased, but this is subject to a case being made by the Knowledge Base Partner proposing the Partnership; that case being supported by the relevant KTP Adviser and by the Partnership Approvals Group (PAG) which has an official of the TSB who has the authority to approve proposals there and then as a member.

3. Unless a case has been made in writing to the Director and accepted and agreed, a maximum of £700 may be expended from the Eligible Costs on fees associated with achievement of a higher degree/qualification.

4. When the premises of the Company Partner at which the major part of an Associate's project will be undertaken is in the London area (up to 16 miles from Charing Cross), the 'Contribution to Associate Employment Costs’ element of Eligible Costs may be increased by £3,000 (ie from £27,000 to £30,000). If the location of the Knowledge Base Partner is in the London area (up to 16 miles from Charing Cross), the 'Contribution to Academic and Secretarial Support' element of Eligible Costs may be increased by £1,500 (ie from £10,500 to £12,000).

5. The grant amounts, excluding the contribution to Indirect Costs, applicable to any approved Partnership Proposal and Application for Grant will normally be determined by reference to the following:

Small company: The company contribution will be 40% where up to four Associate projects are approved with in a five year period. Between five and eight the company contribution will be 50% and nine and over, the rate will be 60%.

Medium sized company: The company contribution will be 40% where up to five Associate projects are approved within a five year period. Between six and ten the company contribution will be 50% and eleven and over, the rate will be 60%.

Large company: The company contribution will be 60% where up to six Associate projects are approved with a five year period. Between seven and twelve the company contribution will be 70% and thirteen or more, the rate will be 80%.

6. Lower rates of grant (including 0%) than those indicated above may be negotiated by the Director in particular circumstances, subject to discussion by the PAG and the approval of a duly authorised official of the TSB.


STANDARD BUDGET PER ASSOCIATE FOR ONE YEAR

All figures in £ELIGIBLE COSTS GRANT AT

60% GRANT AT

40%GRANT AT

30%GRANT AT

20%GRANT AT

‘0%’

Direct Costs

Contribution to Associate Employment Costs 27,000 16,200 10,800 8,100 5,400 -

Contribution to Academic and Secretarial Support 10,500 6,300 4,200 3,150 2,100 4,000

Associate Development2,000 1,200 800 600 400 500

Travel and Subsistence2,250 1,350 900 675 450 -

Equipment, Consumables, and Other Costs 1,500 900 600 450 300 -

Total of Direct Costs 43,250 25950 17,300 12,975 8,650 4,500

Indirect Costs

Contribution to the overheads of the Knowledge Base Partner @ 46% of the grant contribution to direct staff

costs 10,350 7,820 5,175 3,910 -

Maximum Grant Payable 36,300 25,120 18,150 12,560 4,500


STANDARD BUDGET PER ASSOCIATE FOR ONE YEAR WHEN LOCATION OF THE COMPANY PARTNER IS ‘IN LONDON’


60% GRANT AT

40%GRANT AT

30%GRANT AT

20%GRANT AT

‘0%’

Direct Costs






Total of Direct Costs 46,250 27,750 18,500 13,875 9,250 4,500

Indirect Costs


costs 11,178 7,452 5,589 3,726 -



STANDARD BUDGET PER ASSOCIATE FOR ONE YEAR WHEN THE KNOWLEDGE BASE PARTNER IS ‘IN LONDON’


60%GRANT AT

40%GRANT AT

30%GRANT AT

20%GRANT AT

‘0%’

Direct Costs







Indirect Costs


costs 10,764 7,176 5,382 3,588 -



STANDARD BUDGET PER ASSOCIATE FOR ONE YEAR WHEN BOTH PARTNERS ARE ‘IN LONDON’


60%GRANT AT

40%GRANT AT

30%GRANT AT

20%GRANT AT

‘0%’

Direct Costs







Indirect Costs


costs 11,592 7,728 5,796 3,864 -



6.4 APPLICATION OF NON fEC GRANT RATES FOR KTP - FAQs

Q: What is the position if a large company has in place a ‘Flagship’ strategy for using KTP and a number of current Partnerships or previous KTP activity agreed and supported by the PAG and comes in for further involvement in KTP?A: The previously stated ‘Flagship’ strategy agreed by the PAG must still be followed and the grant rate agreed by the PAG stands. Follow-on grant rates will be applied on the assumption that the previously stated activity will all be taking place. A. Substitutes for an existing strategy will have to be agreed by the Partnership and by the PAG and clearly identified as such by the Partnership. The grant rate applied in these cases will be as previously agreed by the PAG.

Q: What happens if a division of a large company comes in for KTP and has no knowledge of previous or possible future KTP activity from elsewhere in the Group?A: Grant rates will be applied by the PAG against known previous or currently approved KTP activity across the whole of the Group and on a first come, first served basis.

Q: What happens if a company changes size from small to medium or from medium to large, or vice versa?A. The level of grant will be applied firstly on the size of the company at the time of the new application and then based on the number of previously approved Associate projects.

Q: Should companies be encouraged to submit proposals with more than one Associate?A: Yes. Every effort should be made to bring them in at the same time for consideration by the same PAG even when a different Knowledge Base Partner is proposed. The synergy between the projects should be explained.A: Yes. Where there are a large number of proposed Associate projects consideration should be given to submitting separate proposals, especially where the financial/academic benefits for each proposed project could become unclear.

Q. When is the counter to the application of the grant rate reset? A: When there has been a break of five years between the completion of the last Associate’s project and a further application being received.

Q: What happens if a project does not start?A. The project will not count if an Associate was not recruited in the time allowed and no funding has been expended, but will count if the Associate has been registered.

Q. How does this affect grant rates for NHS Trusts and LEAs?A. For an NHS Trust it will be dependant upon the size of population it serves (break point remains 300,000 of population served). Less than 300,000 – classed as an SME. Greater than 300,000 would be considered to be large.A. For Councils including LEAs and schools, a 50% grant rate will be applied.

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6.5 APPLICATION OF KTP GRANT RATES FOR NON-fEC PROPOSALS The number of Partnerships and Associate projects that a company can have before there is a change in the grant rate are set out below.

Large companies A 40% grant rate will be applied in up to six Associate projects made within a

five-year period. For between seven and 12 projects the grant rate will be reduced to 30%, and

for over 12 projects in the five-year period the grant rate offered will be 20%.

Medium-sized companies A 60% grant rate will be applied in up to five Associate projects made within a

five-year period. For between six and ten projects the grant rate will be reduced to 50%, and for

over ten projects in the five-year period the grant rate offered will be 40%.

Small companies A 60% grant rate will be applied in up to four Associate projects made within a

five-year period. For between five and eight projects the grant rate will be reduced to 50%, and for

over eight projects in the five-year period the grant rate offered will be 40%.

Notes:

1. In all cases, the ability of the company to resource one or more Partnerships and/or Associate projects at a time will be taken into consideration. An Adviser must also take into account the success of previous KTP projects when considering applications.

2. The applications must meet the KTP criteria for support.3. The grant rate counter is reset if there is a break of five years or more

between a Partnership being completed, ie final day of last Associate, and a further new application being considered, ie PAG date.

4. The five-year period starts on receipt of the first proposal and its approval by the PAG.

5. Where a Partnership does not start, ie an Associate is not recruited in the time allowed despite all reasonable attempts and provided no money has been expended, due to circumstances outside the company’s control that cause it to withdraw, then these projects may not count towards the number of applications made in the five-year period. The Partnership should provide a clear explanation of the circumstances surrounding the non-start of previously approved proposals. However, more than one withdrawal in the five-year period may not be looked upon favourably.

6. It is expected that large companies will use multi Associate projects.

6.6 APPLICATIONS FOR ADDITIONAL FUNDING FOR ALL BUDGETS


1. General

Funds may be vired between Associate Development, Travel and Subsistence and Equipment and Consumables headings. The PAG would be unlikely to support a request for virement of funds out of the Associate Development budget, unless it was clear that such a request did not jeopardise the personal and career development opportunities of the Associate. Requests for virement may also be made after the grant offer letter has been issued. Applicants should consult the information available on the KTP Portal about making a Revision.

Where a proposal contains a request for additional funding for Travel and Subsistence or Equipment and Consumables, the Partnership should explain why no virement could be made from other headings. This will require details of how the standard amounts are being used. The PAG will not consider requests for additional funding in support of Associate Development.

Requests to increase the standard amounts for Travel and Subsistence and Equipment and Consumables will be considered but must be fully justified. Where a proposal requires the Associate to make inter-company site visits as an essential part of delivering the objectives of the programme, this must be included in the work plan. The PAG may or may not support such requests.

2. Requests for additional funding from large companies

PAG will not support requests for additional funding for Travel and Subsistence or Equipment and Consumables where the Company Partner is considered to be large.

3. Requests for additional funding from SMEs

The PAG is unlikely to support requests for additional funding for Equipment and Consumables where it is clear that the Company Partner (an SME) can afford such costs.

The PAG may, in very exceptional circumstances, support a request provided a strong justification is made and provided that no virement can be made from Travel and Subsistence.

4. London weighting

Under certain conditions additional funding may be made available if the Knowledge Base Partner or Company Partner, or both, are within the London area.

Based on a one Associate project over 12 months and when the premises of the Company Partner at which the balance of an Associate’s project will be undertaken are in the London area (up to 16 miles from Charing Cross), the contribution to the Associate Employment element of Eligible Costs may be increased by £3,000 (currently £27,000, increased to £30,000).

Based on a one Associate project over 12 months and when the location of the Knowledge Base Partner is in the London area (up to 16 miles from Charing Cross), the contribution to the Academic and Secretarial Support element of Eligible Costs (for a non fEC budget only) this may be increased by £1,500 (currently £10,500, increased to £12,000).

5. Fees associated with a higher qualification


5.1 For HEIs

Unless a case has been made in writing to the KTP Programme Director and accepted and agreed before the proposal is approved, a maximum of £700 may be expended from the Associate Development heading of Eligible Costs on fees associated with achievement of a higher degree/qualification. Requests for additional funding under this heading will not be considered or supported.

5.2 For organisations other than HEIs

Unless a case has been made in writing to the KTP Programme Director and accepted and agreed before the proposal is approved, a maximum of £1,700 may be expended from the Associate Development heading of Eligible Costs on fees associated with achievement of a higher degree/qualification. Requests for additional funding under this heading will not be considered or supported.

6. Mentoring support to new Knowledge Base Partners

6.1 The purpose of mentoring support is to provide such organisations with examples of good practice in the management of KTP Programmes, particularly regarding:

Provision of adequate financial and personnel/administrative support. Supporting and mentoring the Associate(s).

This is in addition to maximising benefits to the Partner organisations. To enable this, the mentor (an experienced Knowledge Base Supervisor) would expect to at least:

Attend four early meetings of the Local Management Committee to ensure that good practice is implemented.

Meet appropriate staff on three other occasions to discuss good practice in operational matters.

6.2 Non fEC Budget

The level of funding in support of mentoring currently stands at £1,000. This is allocated at £800 for Institution Staff Costs and £200 for Travel Costs. For non-fEC funded projects, this is grant-funding only and no contribution is made by the company. The amount is also ‘ring-fenced’ and may not be vired to any other budget heading.

6.3 fEC Budget

The amount is also ‘ring-fenced’ and may not be vired to any other budget heading. For fEC funded projects, the company makes a percentage contribution in line with the overall grant contribution. PAG would expect to see funding requests at a similar level to a standard non fEC Budget.

6.4 PAG normally supports requests for mentoring on the first occasion an institution engages on KTP and not thereafter. However in exceptional circumstances this may be repeated eg where an institution may not have engaged on KTP for some time or where the academic staff knowledge and understanding of KTP may be limited. PAG will review such requests on a case by case basis.


6.4 APPLICATION OF NON fEC GRANT RATES FOR KTP - FAQs

Q: What is the position if a large company has already in place a strategy for using KTP and a number of current Partnerships or previous KTP activity agreed and supported by the PAG and comes in for further involvement in KTP?A: The previously stated strategy agreed by the PAG must still be followed and the grant rate agreed by the PAG still stands. Follow-on grant rates will be applied on the assumption that the previously stated activity will all be taking place. A. Substitutes for an existing strategy will have to be agreed by the Partnership and by the PAG and clearly identified as such by the Partnership. The grant rate applied in these cases will be as previously agreed by the PAG.

Q: What happens if a division of a large company comes in for KTP and has no knowledge of previous or possible future KTP activity from elsewhere in the Group?A: Grant rates will be applied by the PAG against known previous or currently approved KTP activity across the whole of the Group and on a first come, first served basis.

Q: What happens if a company changes size from small to medium or from medium to large, or vice versa?A. The level of grant will be applied firstly on the size of the company at the time of the new application and then based on the number of previously approved Associate projects.

Q: Does the second in a current one Associate project funding opportunity, for an SME, still apply?A: No. Small or medium-sized enterprises which come in for further Partnerships will attract the grant rate, which applies for its size and based on the number of proposed projects. Q: Should companies be encouraged to submit proposals with more than one Associate?A: Yes. Every effort should be made to bring them in at the same time for consideration by the same PAG even when a different Knowledge Base Partner is proposed. The synergy between the projects should be explained.A: Yes. Where there are a large number of proposed Associate projects consideration should be given to submitting separate proposals, especially where the financial/academic benefits for each proposed project could become unclear.

Q. When is the counter to the application of the grant rate reset? A: When there has been a break of five years between the completion of the last Associate’s project and a further application being received.

Q: What happens if a project does not start?A. The project will not count if an Associate was not recruited in the time allowed and no funding has been expended, but will count if the Associate has been registered.

Q. How does this affect grant rates for NHS Trusts and LEAs?A. For an NHS Trust it will be 60% or 40% depending upon the size of population it serves (break point remains 300,000 of population served).A. For Councils including LEAs, a 50% grant rate will be applied.

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6.5 APPLICATION OF KTP GRANT RATES FOR NON-fEC PROPOSALS The number of Partnerships and Associate projects that a company can have before there is a change in the grant rate offered has been changed. The new rates, which came into effect from 12 May 2005, are set out below.

Large companies A 40% grant rate will be applied in up to six Associate projects made within a

five-year period. For between seven and 12 projects the grant rate will be reduced to 30%, and

for over 12 projects in the five-year period the grant rate offered will be 20%.

Medium-sized companies A 60% grant rate will be applied in up to five Associate projects made within a

five-year period. For between six and ten projects the grant rate will be reduced to 40%, and for

over ten projects in the five-year period the grant rate offered will be 30%.

Small companies A 60% grant rate will be applied in up to four Associate projects made within a

five-year period. For between five and eight projects the grant rate will be reduced to 40%, and for

over eight projects in the five-year period the grant rate offered will be 30%.

Notes:

7. In all cases, the ability of the company to resource one or more Partnerships and/or Associate projects at a time will be taken into consideration. An Adviser must also take into account the success of previous KTP projects when considering applications.

8. The applications must meet the KTP criteria for support.9. The grant rate counter is reset if there is a break of five years or more

between a Partnership being completed, ie final day of last Associate, and a further new application being considered, ie PAG date.

10. The five-year period starts on receipt of the first proposal and its approval by the PAG.

11. Where a Partnership does not start, ie an Associate is not recruited in the time allowed despite all reasonable attempts and provided no money has been expended, due to circumstances outside the company’s control that cause it to withdraw, then these projects may not count towards the number of applications made in the five-year period. The Partnership should provide a clear explanation of the circumstances surrounding the non-start of previously approved proposals. However, more than one withdrawal in the five-year period may not be looked upon favourably.

12. It is expected that large companies will use multi Associate projects. 13. For SMEs located within an EU Objective 1 area in England, the

grant rate offered will be in line with the approved bid for such areas.

6.6 APPLICATIONS FOR ADDITIONAL FUNDING FOR ALL BUDGETS

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1. General

Funds may be vired between Associate Development, Travel and Subsistence and Equipment and Consumables headings. The PAG would be unlikely to support a request for virement of funds out of the Associate Development budget, unless it was clear that such a request did not jeopardise the personal and career development opportunities of the Associate.

Where a proposal contains a request for additional funding for Travel and Subsistence or Equipment and Consumables, the Partnership should explain why no virement could be made from other headings. This will require details of how the standard amounts are being used. The PAG will not consider requests for additional funding in support of Associate Development.

Requests to increase the standard amounts for Travel and Subsistence and Equipment and Consumables will be considered but must be fully justified. Where a proposal requires the Associate to make inter-company site visits as an essential part of delivering the objectives of the programme, this must be included in the work plan. The PAG may or may not support such requests.

2. Requests for additional funding from large companies

It has been agreed that the PAG will no longer support requests for additional funding for Travel and Subsistence or Equipment and Consumables where the Company Partner is considered to be large. This change was implemented with effect from the September 2007 submission date for new proposals. Partnerships approved before this date remain unaffected.

3. Requests for additional funding from SMEs

The PAG is unlikely to support requests for additional funding for Equipment and Consumables where it is clear that the Company Partner (an SME) can afford such costs.

The PAG may, in very exceptional circumstances, support a request provided a strong justification is made and provided that no virement can be made from Travel and Subsistence.

4. London weighting

Under certain conditions additional funding may be made available if the Knowledge Base Partner or Company Partner, or both, are within the London area.

Eligibility for these additional funds came into effect from 1 September 1996.

Based on a one Associate project over 12 months and when the premises of the Company Partner at which the balance of an Associate’s project will be undertaken are in the London area (up to 16 miles from Charing Cross), the contribution to the Associate Employment element of Eligible Costs may be increased by £3,000 (currently £27,000, increased to £30,000).

Based on a one Associate project over 12 months and when the location of the Knowledge Base Partner is in the London area (up to 16 miles from Charing Cross), the contribution to the Academic and Secretarial Support element of Eligible Costs may be increased by £1,500 (currently £10,500, increased to £12,000).

5. Fees associated with a higher qualification

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Unless a case has been made in writing to the KTP Programme Director and accepted and agreed, a maximum of £700 may be expended from the Associate Development heading of Eligible Costs on fees associated with achievement of a higher qualification. Requests for additional funding under this heading will not be considered or supported. 6. Mentoring support to new Knowledge Base Partners

The purpose of mentoring support is to provide such organisations with examples of good practice in the management of KTP Programmes, particularly regarding:

Provision of adequate financial and personnel/administrative support. Supporting and mentoring the Associate(s).

This is in addition to maximising benefits to the Partner organisations. To enable this, the mentor (an experienced Knowledge Base Supervisor) would expect to at least:

Attend four early meetings of the Local Management Committee to ensure that good practice is implemented.

Meet appropriate staff on three other occasions to discuss good practice in operational matters.

The level of funding in support of mentoring currently stands at £1,000 (set in October 1999). This is allocated as £800 for Institution Staff Costs and £200 for Travel Costs. For non-fEC funded projects, this is grant-funded only and no contribution is made by the company. The amount is also ‘ring-fenced’ and may not be vired to any other budget heading. For fEC funded projects, the company makes a percentage contribution in line with the overall grant contribution.

6.7 VAT

Recently a local VAT Inspector, when reviewing VAT liability, found a College was not applying VAT to the contributions made by the company partner in respect of KTP project payments. The College was required to recover the VAT and back VAT payments from the companies they had been working with. A quick survey of HEI’s around the UK suggested that some did and some did not apply VAT to the company contributions towards KTP Projects. The general advice on this is that the company contribution was classified as a ‘service’ so would attract VAT but to clarify this with the local VAT Inspector.

Separately, the UUK Finance Directors Committee raised a different issue with as there had been a couple of recent cases whereby VAT was applied to government grants associated with research and HMRC had ruled that VAT was payable.

TSB has therefore made representations to HMRC on these points. As a result it is confirmed that the TSB grant to the HEI is not deemed a ‘service’ and therefore not liable for VAT. This is on the basis that government does not get any direct benefit from the awarding of the grant.

HMRC also indicated that the supply of the Associate was not classed as a service as the Associate is employed by the HE/FEI/RTO ie it was not a supply of staff. So again VAT was not liable on this aspect by the HEI.

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However, they did not accept the case in respect of the company contribution towards the project costs as not a ‘service’ and therefore not liable for VAT. The ruling means that VAT should be applied by the KB partner to the contributions made by the company towards KTP projects. This, unfortunately, will mean that companies will have to reclaim the VAT paid on their KTP payments through VAT claims.

It is thought that all organisations involved in KTP have a part that is VAT registered through which the VAT paid can be reclaimed. The VAT on the company payments to the HE/FEI/RTO cannot be claimed by the KTP grant recipient on behalf of the organisation and then passed onto TSB for payment.

6.8 R&D GRANTSSpending on Research and Development by small and medium-sized companies (SMEs) can now qualify for R&D tax credits. These came into effect from 1 April 2000. The SME R&D tax credits allow for enhanced tax relief for certain R&D spending in two ways. An increase in the tax relief SMEs can claim for their qualifying R&D expenditure from the usual R&D Allowance of 100% to 150%, or a payable R&D tax credit for companies not in profit - a cash payment of £24 for every £100 spent on qualifying R&D.

KTP can count towards R & D Tax credits but this does have regional variations. A company should seek advice from its local tax office.

7. COMMUNICATION

7.1 COMMUNICATION WITH AEA - HELPLINEStakeholders are reminded that occasionally KTP team members are away from their desks, so sometimes when you call one of them on their direct dial number it will go through to their voicemail. If you do not want to leave a message, try calling the KTP Helpline number - 0870 190 2829. The Helpline is manned by a small group of people working on a rota who are familiar with most aspects of KTP and may be able to answer your query. If not, they will take your message and make sure it gets followed up by the right person as soon as they are available.

So, please use the Helpline number 0870 190 2829 or email us at:[email protected] to be sure of a prompt reply.

The Helpline normal office hours are 0815 -1650 hrs Monday to Thursday and Friday 0815 - 1610 hrs.

The fax number is 0870 190 6320

7.2 NEW USER ACCESS TO THE PORTAL

1. General

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The lead Sponsor TSB and its managing agent AEA, makes use of the KTP Portal to communicate with the KTP Stakeholder community. The posting of documents and new announcements enables users to have access to the most up to date information available. Should a new member of staff join an existing KTP Office team or someone else from an Institution new to KTP then we are keen to make sure they have access to the latest information about KTP as soon as possible. Please encourage them to ‘Register as a New User’ by logging on through the top menu of the KTP Website Home Page. The KTP Portals provide access to all the shared documents previously available in the Restricted Area of the old KTP Website. Access to the KTP Guidebook is available only from the KTP Website Portal. To gain access it will require the user to be part of an approved ‘Portal User Group’. If you are new to the KTP community please register on the home page of the Website by selecting ‘New User Registration’ from the options at the top of the Home Page. Unless you are linked to a specific Partnership as the KB Administrator or a Supervisor you should select either of the following User Groups:

KTP OfficeKTP Finance

2. Use of the Portal

To get new users off to the best possible start they are encouraged to read first the Portal Guide and help which is available on their User Home Page.

It is considered timely to remind you of the following when using the Portal:

To post a vacancy or register a new Associate. This can only be done by the Partnership Supervisor or KB Administrator linked to the Partnership. This applies to those who were named on the proposal form and entered on the database.

Only the person who posted the vacancy can make changes to an existing advert.

Lead Academics who are not identified as Supervisors do have access to the Portal. They may also receive information about KTP via their nominated KB Admin or Partnership Supervisor. Alternatively information about KTP can also be obtained from the KTP Programme Office.

Only Supervisors can book to a Supervisor Workshop. Any proposed changes to Supervisors identified in the proposal must be supported by the nominated KTP Adviser and notified to Julia Bottomley in the KTP Programme Office. The advise is to ensure changes are made to the KTP database before attempting to register as a replacement Supervisor

Only KB Admins or KB Finance Users have access to and can process claims on behalf of their Institution, using the Portal. Using the Portal to process claims became mandatory from September 2007.

To make sure you make best use of the Portal and do not miss important updates, please set your ‘Alerts’. You can do this for both document lists and Announcements throughout the Portal. Further guidance is available on how to set Alerts by accessing the Portal Guide and Help.

Failure to access the Portal at least once in every 90 days will result in the Users Account being suspended. To reactivate a suspended account please contact the relevant Portal Manager identified as such at the Top of each Portal Home Page. Once reactivated you will have to request an email reminder to be sent details of your user name and password.

3. Website Home Page

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Each Institution also has the opportunity to appear under the 'Contact Us' Tab on the public facing area of the KTP website. Currently we are able to include details of a ‘First Point of Contact’ per Institution. one contact name, email and telephone number.. In order to ensure this is kept up to date please email [email protected]

7.3 KTP STRATEGY AND SPONSORS CRITERIA

The latest Sponsor’s Criteria is only from the Public Area of the KTP website.

www.ktponline.org.uk/strategy/SponsorshipCriteria.aspx

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