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Grant Funding - Worried About State Aid?

on Thursday, 14 September 2017.

Higher education institutions are increasingly being asked to obtain a state aid opinion as a pre-condition to the release of EU or UK grant funding.

Whilst it may be tempting to ignore or put off the state aid risks as being too complex or too remote, there are good reasons for addressing these issues.

According to HESA (the company set up to collect data from higher education providers), UK higher education institutions collectively reported around £725 million in research grant income from EU government bodies in 2014/15. Given the values, perhaps it is not surprising that there has been a greater focus on state aid. Grant funding from EU or UK state resources gives rise to a problem when it gives private undertakings a commercial advantage which distorts competition

Failure to address state aid issues may affect your ability to drawdown the grant.

State aid is unlawful and will be required to be paid back with interest. It is treated as a material breach of grant funding terms and conditions, resulting in funding being suspended and claims rejected. Higher education institutions may also risk being in breach of their own financial covenants.

How to Minimise the Risk

By getting advice early you can ensure your arrangements are structured to minimise state aid risk to you and your delivery partners and to maximise match contributions. This is important as there are strict rules on revenue generation and the maximum amount of overall grant funding that can be obtained in relation to a project. The good news is that research and development is generally recognised to be a good thing and there are often solutions to avoid state aid and available exemptions to rely on.

VWV has just appointed Stephanie Rickard as a Partner to lead its Procurement and State Aid team from its Bristol office. Stephanie has a particular interest and focus in the higher education sector and has advised higher education organisations, innovation centres, research organisations, technology start-ups on state aid issues.

For more information please contact Stephanie Rickard in our Higher Education team on 0117 314 5675


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