Covid-19 has had and will continue to have significant impacts on the world of R&D grants for businesses.
For companies in the fields of anti-viral research and development and diagnostic technologies, rafts of new grants both at National and International level have been made available. Charitable foundations such as the Gates Foundation have also made major funds available for this type of research. In a similar vein, the European Commission has responded with Covid-19 grant programmes, to which UK companies are eligible to apply.
At the beginning of the year, the exact nature of UK participation in the Commission’s Horizon 2020 research and development projects and other EU research programmes was unclear, in the run up to Brexit. However, as the Covid-19 crisis began to occupy our TV screens, the final Brexit transition agreement means that UK companies can continue to bid for research and development funding until the end of 2020.
The UK Government has also made it clear that if UK companies and research groups secure Commission R&D projects while the UK is still in the “transition phase”, but where those projects run into 2021 – 2023, then the UK Government will pick up the bill for the UK participation until the completion of the project.
As the UK is still subject to EU law until the end of the transition period, the UK is still covered by the “state aid rules” for grants and other financial interventions in business. The European Commission has approved the UK scheme for £50 billion of support to UK companies affected by the coronavirus outbreak.
The measures agreed by the Commission on 19 March 2020, flex the state aid rules in the current extraordinary circumstances. Many of the measures, such as company loans and support for employment have been widely trailed in the press. However, measures such as:
- Support for coronavirus related research and development (R&D)
- Support for the construction and upscaling of testing facilities to develop and test products useful to tackle the coronavirus outbreak
- Support for the production of products relevant to tackle the coronavirus outbreak
which allow support by central government, devolved governments and local government delivering schemes involving state aid without the normal restrictions, are less widely known. These new measures comply with the Commission rules on; the “cumulation of aid” restricting the total aid an organisation can receive and the limitation of aid under the relaxed rules to one year.
The current situation opens up opportunities not only for biomedical companies, but those in IT and logistics and other fields to assist in the fight against the virus. The continued access to European projects is a boon for all business R&D. The joint UK – EU flexibility on relaxing state aid rules gives powerful support to the continuation of active R&D programmes by industry at a time of global difficulty.
It is clear that the R&D grant funding landscape is becoming increasingly dynamic and complex as it reacts to the current crisis. No doubt further initiatives will need to be introduced as time progresses, to help businesses both during the lock down period and once it is over as they struggle to regain lost momentum. The whole mix of Grants, Equity and loans needs to be balanced to get the best results in the shortest time period.
