Frequently Asked Questions
Contents
Who can bid?
Public/Private Partnerships
Programme Bids
What projects will RGF support?
What areas can bid?
RGF Project Funding
Additionality
Tax implications
Operational issues
Payment of Support
Decisions
Post Completion
Revised Application Form
RGF recipient or accountable body – for RGF, Government defines the most common options for identifying the legal status of recipients as:
- Company
- Sole proprietor
- Partnership
- Public corporation/ nationalised body
- Local authority
- Non-profit body
While not exhaustive, the list captures the common options for identifying the legal status of recipients, which would include the legal status of many charities and social enterprises.
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A: Yes. However, the same bid should not be submitted twice. The applicant will need to be sure that there is sufficient resource to manage both projects. Bids from or involving the same organisation should be cross-referenced.
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A: Yes so long as they meet the objectives and criteria of the Fund.
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A: Yes, The RGF continues to be available to SMEs who can apply directly to the next round of the fund, if the individual bid is for over £1m. Or they can work with other organisations to collaborate as part of a wider programme bid. For programme bids, a lead organisation will need to be indentified and will be responsible for the delivery.
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A: Yes so long as they meet the objectives and criteria of the Fund.
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A: There is significant diversity across civil society organisations (such as voluntary and community groups, charities and social enterprises). To clarify your status refer to Treasury guidance on the private/public split.
Question 3 of the application form guidance defines the most common options for identifying the legal status of recipients as:
(a) Company
(b) Sole proprietor
(c) Partnership
(d) Public corporation/nationalised body
(e) Local authority
(f) Non-profit body
While not exhaustive, the list captures the common options for identifying the legal status of recipients, which would include the legal status of many charities and social enterprises
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A: That is a matter for the partners to establish and justify as part of their application. They should demonstrate in particular that the partnership is robust. Partners should also bear in mind that in the event of a successful bid, Government will need to enter into contract with a legal entity that will be responsible for the delivery of the project.
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A: Projects are defined as a type of RGF bid for funding to be awarded to a final beneficiary for projects which meet RGF objectives - to directly create jobs through private sector enterprise and growth; for activity to enable or unlock future private sector jobs growth.
Programmes are defined as a type of RGF bid for funding to be awarded to an intermediary who will then use it to do any combination of the following:
- run a grant or loan scheme for final beneficiaries (e.g. in a particular place and/or for a specific sector and/or size of beneficiary)
- provide funding to a predetermined set of projects (e.g. a package of small projects in an area or fund to support specific activities in an area such as training provision or infrastructure improvements)
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A: The accountable body which is managing the programme should ensure compliance with public sector procurement rules (where relevant) and ensure fair and open competition, if awarding contracts for service delivery. Public sector procurement rules do not apply to the award of grants, but programmes should ensure the projects granted funding are value for money. This could be done through a competition if the accountable body is a private sector body. Special considerations apply to the funding of public works contracts subsidised by a contracting authority; further information about these special considerations can be found on the European Commission website.
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A: This cost will normally be born by the bidder feedback from applicants from previous rounds indicate an approximate cost of 1% - 2% of the total RGF award.
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A: Yes. Programmes will be required to provide a regular report on progress and delivery and any claims for payment of agreed tranches of RGF support will need to be covered by certification from an independent auditor. The accountable body running the programme will be responsible for commissioning the auditor and liable for its costs. The accountable body should also be prepared to carry out a full impact evaluation of the programme at its own cost. An evaluation plan will be required at the application stage. Advice and information on evaluation and monitoring is provided in the guidance notes available on the RGF monitoring and grant claims web page.
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A: Programme will have t distribute RGF funding in a State aid compliant manner. This will involve checking that beneficiaries have not received support for the same investment and/or eligible costs.
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The roles and responsibilities of an Accountable Body for a programme bid are set out in the Governance and Capability (Section K) of the Bidding Guidance for Programme Bids document at http://www.bis.gov.uk/policies/economic-development/regional-growth-fund/how-to-apply.
We will work with the accountable body for successful programme bids to agree the terms and conditions of the programme. This will include the potential for repayment of RGF grant funding should the programme fail to deliver on its commitments.
Terms and conditions will be considered on a case by case basis and will be specific to each programme. A programme bid is for funding to be awarded to an Accountable Body who acts as an intermediary to support final beneficiaries. Broadly speaking, there are two types of programme bids, which are described below. We cannot say at this stage how the potential repayment of grant funding will work for specific cases because it will depend on the type of bid and the terms agreed. We reserve the right to impose strict repayment provisions where they are needed to protect the public purse. However as a general rule:
- Programme type a) Funding to a predetermined set of projects (e.g. a package of small projects in an area or fund to support specific activities in an area such as training provision or infrastructure improvements): This type of programme bid is similar to a project bid - we would include the potential for repayment in the terms and conditions based on what the predetermined set of projects propose to deliver, and we would expect the accountable body to do the same with the final beneficiaries - i.e. liability is transferred to the final beneficiaries of funding.
- Programme type b) Run a grant or loan scheme for final beneficiaries (e.g. in a particular place and/or for a specific sector and/or size of beneficiary):
- For this type of programme bid we focus the terms on the accountable body's performance against its objectives (getting the money to the agreed end beneficiaries) rather than the performance of the end beneficiaries who have not been identified at the time of contracting. Therefore, scheme funding could be suspended, recovered or a scheme terminated if the Government, acting reasonably, does not believe that progress on the project is satisfactory. However, although the Accountable Body will still need to contract with end beneficiaries on the basis of an agreed job target, it is less likely that there would be the potential for repayment of RGF if a final beneficiary under-performs.
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A: As with projects, planning permission does not already need to be in place in advance of bidding. However if planning permission is not already in place, the RGF Secretariat would wish to see detail on the risks of not obtaining this permission, if permission fits in with the Local Authority's planning strategy and if planning permission has previously been rejected for the same or similar project.
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A: In this case charities should consider partnering other bodies (either private or public sector) who may be able to administer the programme jointly in the local area.
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A: In exceptional cases payment may be made on need where this is objectively justifiable, and a proposal on payment schedules should be included in the programme bid alongside an explanation of why this is necessary. In general, however, payment will be phased in line with capital expenditure and/or employment milestones, depending on the specific terms of the contract agreed for individual proposals.
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A: All public/private partnerships should declare how they will ensure value for money for the projects which deliver the various components of a programme. This should also explain how any potential conflicts of interest would be managed.
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A: Yes, a public sector organisation could manage the project or programme and provide the lead in the public / private partnership as long as the private sector involvement in the project or programme is clearly demonstrated.
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A: Yes, to the extent that they meet the objectives and criteria of the Fund.
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A: Yes. However, direct support to large companies for capital investment can only be given to projects that take place in the Assisted Areas. Information on Assisted Areas.
A: Proposals which include support for basic infrastructure which unlock specific business investment that leads to sustainable employment, and meet the other Fund criteria and objectives
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A: No. The Fund will operate in England only.
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A: The Regional Growth Fund is a challenge fund and not ring-fenced or pre-allocated in any way.
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A: Bids from any part of England are eligible under the Regional Growth Fund, although bidders should have regard for the second objective of the Fund and be aware that some parts of the country, particularly where there is currently high employment, and a vibrant private sector, may struggle to demonstrate how they meet that objective.
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A: Decisions on funding will be based upon an assessment of the proposals against the objectives and criteria; each bid will be considered on its merits. Given the high levels of interest in the Fund, bidders need to present realistic and competitive bids.
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A: No. The geographic area affected by the project should be meaningful, realistic and provide for measurable outcomes.
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A: No. But the RGF is a challenge fund and all bids are in competition with one another. We recommend focusing effort on bids that fully meet the Fund objectives and criteria and on quality as opposed to quantity. In addition bidders should consider the impact of State aid rules on cumulation.
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A: No. All bids will be assessed equally against the objectives and criteria of the RGF.
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A: Schemes that take place in an affluent area but which clearly benefit or create employment in a disadvantaged area should make the location of the economic impact of the project clear in the application.
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A: The focus of the Regional Growth Fund is on functional economic areas rather than on formal local authority geographies. However, in order to assess reliance using official data, we need to rely upon Local Authority Districts (LADs) and Unitary Authorities (UAs) as the building blocks. The reason for using such data is that LADs and UAs are the most fine-grained geographic level at which many relevant statistics are published. This data can be flexibly aggregated to resemble the real functional geographies that the bid will cover (for example housing markets, travel to work areas or local enterprise partnerships).
In question Part 2 of the application form, bidders are invited to estimate the footprint of the project in terms of indirect and direct employment to be created. As shown in the illustrative table below, this allows bids to indicate in which LADs the jobs will be created in, recognising that impacts could occur in areas which are not near to or border the project location. The purpose of this is to establish a unique geography for each bid against which reliance on the public sector will be assessed.
| Area | Approximate proportion
of employment impacts |
|---|
| e.g. Local Authority District A |
60% |
| e.g. Local Authority District B |
20% |
Unknown Districts
elsewhere in England |
10% |
| Outside England |
10% |
| Total |
100% |
In addition bidders should be aware that EU State aid restrictions mean that financial support for Capital Investment by large companies can only be provided if the project takes place in an Assisted Area. Information on Assisted Area status.
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A: For State aid purposes, private sector leverage is defined by the eligible costs of the exemption under which you are applying (training, R&D, SME or assisted area). This is set out in Annex B of the information for Applicants document.
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A: It is possible for a bid to include a commitment to private sector leverage that has not been confirmed at the time of submitting the application, if it will be in place later in the project lifespan. The bid would need to set out the reasoning behind the investment and spend profile for the projects and the risks associated with this. Bidders should also bear in mind that this is a challenge fund and bids with a lower risk spend profile and more robust private sector leverage will have a competitive edge.
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A: At the present time the RGF may provide funding in the form of grants, loans and/or loan guarantees. This approach will be kept under review by the Independent Advisory Panel and Ministers.
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A: No. The RGF web pages provide guidance and support to potential bidders and gives details of how to contact the RGF team for further support with their applications.
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A: No.
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A: No specific levels of private/public leverage are being sought. Private sector leverage is one of many factors taken into consideration in the decision making process. However, the fund is competitive and only those bids that best lever private sector investment, meet the Funds other objectives and criteria, and offer the best value for money will be supported.
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A: The maximum amount of RGF support / State aid that can be provided to a private sector undertaking must be assessed on a case by case basis. Applicants are encouraged to bid for the minimum amount of support needed to unlock a project – an assessment of whether that support can be provided in a State aid compliant manner will be made as part of the appraisal process.
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A: Yes. Bidders are encouraged to identify sources of match funding. There is no requirement or limit on match funding as long as it complies with State aid rules. Applicants should be particularly alert to State aid rules if ERDF is used to match-fund RGF.
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A: No.
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A: Where a project is eligible under both schemes’ objectives and criteria, it is possible for a project to bid to the ERDF and to the RGF. Whilst the timelines are broadly aligned for Round 3 from expressions of interest to final decision), the decision process is separate. Since the RGF is a challenge fund there is no certainty that support will be forthcoming until the bidding round has been decided.
For projects that do bid to both the ERDF and RGF and which are successful in both there will be close contact between the two funds at the contract stage, due diligence phase and monitoring. Please be aware, leverage of private sector investment is a key criteria for RGF support and ERDF funding will not be considered private sector funding in the RGF assessment process.
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A: RGF and Advanced Manufacturing Supply Chain Initiative (AMSCI) have separate and different aims For example, RGF has a particular focus on stimulating growth in parts of the country most dependent on the public sector; while AMSCI has a particular interest in helping existing supply chains grow and achieve world class standards while encouraging major new suppliers to set up and manufacture here.
Potential bidders can bid for both funds the same State aid rules will apply to both funds.
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A: It will have very little practical impact. It is largely an internal distinction and in any event most private sector projects comprise a mix of capital and revenue expenditure.
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A: Lottery funding is not regarded as public sector funding so can be counted toward the private sector contribution to a project. However, we anticipate that alongside leverage of funding, the private sector's stake in the outcome of the project has a bearing on how likely it is that it will be economically sustainable. Lottery funding will not give the Independent Advisory Panel and Ministers much comfort that the project is economically sustainable.
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A: The RGF is designed to provide the minimum amount of funding needed to enable projects to go ahead that would not otherwise have been able to do so. Projects that have started will need to demonstrate how they meet the “additionality” criteria. The test is whether the applicant has committed to carry out the project. Preparatory / scoping work that does not indicate an absolute commitment to carry out a project is fine, although very extensive work would weaken the additionality case.
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A: Bids for funding to accelerate development are possible but the benefits will only be assessed as those occurring in the period between delivery and when the project would in any case have gone ahead. All projects and programmes must meet the objectives and criteria of the Fund.
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A: This depends on which part of the R&D Tax Credit scheme is in question because different elements of the scheme are in a different State aid position. Further advice should be sought from the administrator of the Tax Credit scheme as to the status of the credits and whether additional support may be cumulated.
Generally if the applicant has benefited from an R&D Tax Credit which is considered to be State aid then he will need to take this into account if the eligible costs which were supported under the R&D Tax Credit are the same or overlap with those for which support under the RGF is requested.
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Yes - the receipt of the grant monies must be accounted for in your accounts and thus is likely to impact on your tax position. You should consult with your accountants or tax advisors to understand the exact impact.
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A: No.
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A: BIS is holding a series of RGF events around the country. In addition, there will be an opportunity for potential applicants to meet officials to discuss aspects of their bid as part of an Expression of Interest meeting. Details of how to book an EOI and what you will need to know are available on the RGF web page.
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A: There is an opportunity for applicants to include administrative costs in programme bids. The RGF is, however, a competitive process and programmes should consider that these costs may make bids less competitive – administrative costs if included should be a small percentage of the programme overall and should be clearly stated in the application.
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A: Detailed information contained in individual application forms will be treated as commercially confidential but could be aggregated to form a public picture of the number, value and location of bids received. Bid information will be seen by an Independent Advisory Panel chaired by Lord Heseltine and ultimately by Ministers. See the Independent Advisory Panel members page.
The information could also be requested under the Freedom of Information Act 2000. In such circumstances the Department would need to consider whether an appropriate exemption applies (for example, there is an exemption relating to information provided as commercial in confidence) and will seek your views on disclosure, although the decision whether or not to disclose must ultimately rest with the Department.
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A: Direct jobs are jobs that are created or safeguarded by a project partner – i.e. they are jobs upon which it would be reasonable to make RGF funding conditional. Indirect jobs relate to employment impacts resulting from the project, for example in the supply chain, that are not specifically associated with a project or programme and upon which it would not be reasonable to make funding dependent.
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A: No. However it is in the clear interest of bidders not to leave it until the last minute to submit.
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A: No. Applicants must ensure that their application forms and supporting documents are received before the deadline which for Round 3 is 12 noon on 13 June 2012.
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A: Inter-related bids will have to deliver scheme specific outputs and outcomes which cannot be counted against more than one bid. We would not expect any individual project to include in section H of the application form, a risk that identifies that other bids are related and may not be supported. Inter-related bids should be fully cross-referenced.
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A: Projects and programmes will be required to provide a regular report on progress and delivery. In addition any claims for payment of agreed tranches of RGF support will need to be covered by certification from an independent auditor. The contracting party will be responsible for commissioning the auditor and liable for its costs. Advice and information on evaluation and monitoring is provided in the guidance notes available on the RGF monitoring and grant claims web page.
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A: Feedback from applicants from rounds 1 and 2 indicate that on average due diligence costs around 1% - 2% of the total RGF award.
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A: Decisions regarding support and prioritisation are made by a Ministerial Group chaired by the Deputy Prime Minister including the Chief Secretary to the Treasury and the Secretaries of State for: Business, Innovation and Skills; Communities and Local Government; Transport; and Environment Food and Rural Affairs. The Ministerial Group is being assisted by an Independent Advisory Panel chaired by Lord Heseltine which makes recommendations on which projects and programmes best address the objectives of the Regional Growth Fund.
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A: No. The employment impacts may ramp up more slowly than spend. The continued delivery of project objectives will be monitored following the final payment being made and in the event that the contracted impacts are not realised or not sustained the government may act to recover the support provided under the RGF.
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A: Improvements to the application form, based on experiences from previous rounds, means we have a shorter document that still provides the relevant level of detail for the Ministerial Group to make final decisions.
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A: The form does not allow bidders the opportunity to illustrate their applications with tables and graphs. However, there is an opportunity to provide supporting documents with application form.
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A: No. The objectives and criteria were published in the Local Growth White paper on 28 October 2010 and have not changed since.
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