Finance record 2017/18 - Table 5: Research grants and contracts - breakdown by source of income and HESA cost centre

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Version 1.2 Produced 2018-11-27

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The overall total should be the same as that recorded in the financial statements.

This table should include all income in respect of externally sponsored research:
- where the research project scope has been agreed with the sponsor at the outset in the grant or contract awarded to the higher education provider (HEP), and/or
- where the research project scope has been agreed in a forum, where collaborating external organisations are represented and able to influence the direction of the project and be involved in decisions on the particular research projects to be undertaken by the HEP. In such an arrangement the income (and income-in-kind) from external organisations for membership fees necessary to be part of the collaboration will be regarded as research income, provided all other criteria for that income to be returned to the Finance record as research income are satisfied.
The research specified should be carried out by the HEP, or its subsidiary undertakings, and should conform to the conventions of the Frascati definition of research (see section 'Conventions to be used in the Finance record' in the Coverage of the record). The income returned should be that for which directly related expenditure has been incurred and should be stated at the full value, including any recovery of indirect costs whether retained by the HEP, a department, or at the disposal of an individual within a department. Where a research grant or contract is made for a number of different purposes including research (for example research, training and clinical work) only that portion of the grant or contract against which research has been conducted should be returned as research income.

Each row represents the standard academic and non-academic cost centre codes as defined in the 'HESA cost centres' section in the Coverage of the record. The Finance record does not require HEPs to return information by research unit of assessment.

Where projects are funded from a number of sources the income should be allocated between the respective headings so that all the income is fully included, but only once. Where an organisation makes a grant on behalf of other organisations in the form of a joint award the grant should be split between those sources according to their contribution. Conversely where a body makes an award in its own right the award should be recorded according to the status of the organisation and not its funders; an exception is made where charities are funded predominantly from central government.

Capital grants for the purpose of research (i.e. grants for land/buildings/equipment used for R&D purposes in accordance with the Frascati definition of research should be returned as research income on Table 5. Grants for the refurbishment of research facilities should also be treated as capital grants for the purpose of research. Capital grant income that relates to research grants and contracts from sources other than the four UK funding bodies should be returned in Table 5. Capital grants from the four UK funding bodies should be returned under the appropriate head(s) in the relevant Table 7 Funding body grants, which is country specific. All other capital grant income should be returned in Table 7 Head 4f (Capital grants recognised in the year). The capital income returned should include both capital grants recognised in the year under the performance model, and the release of deferred income from capital grants under the accruals model.

Grants from the UK Research Partnership Investment Fund (UKRPIF) have been allocated by the four UK funding bodies with co-investment from external sources. The element of the UKRPIF awarded from the UK funding bodies should be returned in the relevant country specific Table 7 as Funding body income. The element of the UKRPIF awarded from co-investors should be returned as research income on Table 5 under the relevant source (see paragraph 8 below).

Table 5 should include all research grants and contracts income, including tuition fees for research studentships and fellowships associated with the contract. Grants for research studentships or fellowships that are associated with a research grant or contract should be returned under the same column as the grant or contract.

Income for general research fellowships (not awarded as part of a research grant or contract) should be returned as research income, under the relevant source.

Income for general research studentships (not awarded as part of a research grant or contract) should be returned in Table 6 under Head 4 (Research training support grants). Income for general research studentships awarded by charities (as part of an open competitive process) should be returned in Table 6 Head 4a (Income for general research studentships from charities (open competitive process)).

Income awarded by The Royal Society, British Academy or The Royal Society of Edinburgh and funded from non-government sources should be returned under one of the UK-based charities headings only where the HEP has received confirmation from the awarding body that the grant or contract was not government funded.

Research income from Knowledge Transfer Partnerships (KTPs), only where it satisfies the Frascati definition of research, should be returned in Table 5 (under the appropriate source), apart from any portion in respect of studentships or tuition fees. Income from non-research related KTPs should be returned on Table 7 under Head 4 (Other income).

Income for open access funding from RCUK should be included as research, split across Research Councils (Columns 1a - 1g) and the HESA Cost Centres under Head 1 (Academic departments).

Research income from the government's Industrial Strategy Challenge Fund (ISCF), only where it satisfies the Frascati definition of research, should be returned on Table 5 under the delivery partner. If various funders have contributed to the particular project then the research income should be split accordingly. Similarly, research income from the Newton Fund should be returned in this way.

Income from European Social Fund (ESF) grants should not be included in Table 5 but under Table 7 Head 4 (Other income).

Head 4 (Total research grants and contracts) is the figure that links into the Consolidated statement of comprehensive income and expenditure (Table 1 of the return).

Head 5 (Co-investment from external sources on funding council-funded projects (included in Heads 1 to 4 above)) - for institutions in England and Scotland

Income awarded through initiatives funded jointly by funding councils and other sources, such as the UKRPIF or Catalyst fund, should not attract additional financial support from elements of funding council research funding. Funding councils decide their level of contribution to these initiatives at the time of their establishment, taking sustainability into account. In order to identify the co-investment that should be deducted from the calculation of funding council research funding, figures in Head 5 should contain the co-investment from external sources on these projects that has been included in Heads 1 to 4. In Scotland this refers to UKRPIF co-investment ONLY and only to that co-investment which was agreed at the outset of the award.

Column 1 (BEIS Research Councils, The Royal Society, British Academy and The Royal Society of Edinburgh)

The sources of income representing the columns 1a - 1h are as follows:
- Column 1a: Biotechnology & Biological Sciences Research Council (BBSRC)
- Column 1b: Medical Research Council (MRC)
- Column 1c: Natural Environment Research Council (NERC)
- Column 1d: Engineering & Physical Sciences Research Council (EPSRC)
- Column 1e: Economic & Social Research Council (ESRC)
- Column 1f: Arts and Humanities Research Council (AHRC)
- Column 1g: Science and Technology Facilities Council (STFC)
- Column 1h: Income from The Royal Society, British Academy and The Royal Society of Edinburgh should be included under this column. In addition, income from UKRI that has not been included in columns 1a-1g should be included under this column, this should include income from the UKRI's Future Leaders Fellowship (FLF) scheme. Income from Research England should be treated in the same way as income from the other UK funding bodies and returned in the relevant country specific Table 7 as Funding body income.

Columns 2 and 3 (UK-based charities)

Column 2 (UK-based charities (open competitive process)) and Column 3 (UK-based charities (other))

Should include all research grants and contracts income from:
- all charitable foundations, charitable trusts etc., based in the UK which are registered with the Charity Commission for England and Wales,
- exempt charities not covered in Columns 1 and 4,
- those organisations recognised as charities by the Office of the Scottish Charity Regulator (OSCR) in Scotland,
- charities in Northern Ireland recognised as having charitable status by HM Revenue and Customs or registered with the Charity Commission for Northern Ireland.

Income from UK-based charities should be split between those with an Open competitive process for the allocation of funds and Other charities. This split will be used in the Research Excellence Framework (REF).

For income from charities to be treated as awarded through open competition and peer review, and therefore included in Column 2:
- There should be evidence that a particular income stream or grant was available to more than one HEP through direct competition. This should be within a process where no credible candidate was excluded, and the income awarded to the HEP which demonstrated the highest quality research proposal according to external peer review.
- However, grants will also be accepted as complying with open competition and external peer review in circumstances where it can be shown that the charity took external expert advice on its choice of HEP to receive a grant and either:
  - The charity had made it known that it was open to grant applications from other HEPs and these would present a competing call on the funds, even though the charity did not issue an open invitation to bid for the particular grant in question or
  - The charity restricted the funding opportunity on a reasoned basis that there were particular requirements of the project that could only be met by a limited number of HEPs. This could arise, for example, where a project required highly specialist expertise or facilities, or a specific regional focus.

OfS-funded HEPs and HEPs in Northern Ireland who receive recurrent funds for research should also read the additional guidance notes on income from charities.

Columns 4, 5, 6 and 7 (UK Government and industry)

Column 4 (UK central government bodies/local authorities, health and hospital authorities)

Should include all research grants and contracts income from UK central government bodies, UK local authorities and UK health and hospital authorities, except Research Councils and UK public corporations. This should include government departments, and other organisations (including registered charities) financed from central government funds. Research grants and contracts income from non-departmental public bodies (NDPBs), including the British Council, should be included under this column. Where one of these UK-based bodies disburses funds derived from the EU, this should be disclosed in this column. If Innovate UK income satisfies the Frascati definition of research, it should be included in column 4; if it does not satisfy the Frascati definition of research, it should be returned as Other income (Table 7 Head 4).

Column 5 (UK central government tax credits for research and development expenditure)

Research Development Expenditure Credit Scheme (RDEC) income

RDEC is a HMRC research incentive scheme and relates to the level of eligible research expenditure incurred on or after 1 April 2013. Treatment of this item must be consistent with the audited accounts. BUFDG advise that the gross claim is expected to be payable after a tax deduction. The payment is an incentive scheme rather than reimbursement of research expenditure or a refund of taxation.

Gross income from the RDEC scheme should be disclosed as research grants and contracts income from government, with the value of tax deducted shown as taxation under Table 1 Head 9a.

Column 6 (UK industry, commerce and public corporations)

Should include all research grants and contracts income from industrial and commercial companies and public corporations (defined as publicly owned trading bodies, usually statutory corporations, with a substantial degree of financial independence) operating in the UK.

Column 7 (UK Other sources)

Should include all research grants and contracts income from UK sources other than the four UK funding bodies and not covered by Columns 1 to 6. This should include income from other UK HEPs.

Columns 8, 9, 10 and 11 (EU)

Column 8 (EU government bodies)

Should include all research grants and contracts income from all government bodies operating in the EU, which includes the European Commission. Funding from bodies within the UK is excluded from these columns, where one of these UK-based bodies disburses funds derived from the EU, this should be disclosed in Column 4 (UK central government bodies/local authorities, health and hospital authorities). Funders and regulators may, at their discretion, require the separate disclosure of identified funding streams, where a UK-based body disburses funds derived from the EU. For Welsh providers, HEFCW require that funds disbursed by WEFO are disclosed on Table 7 (Wales).

Grants from the ERASMUS+, the EU programme for education, training, youth and sport and similar grants should normally be returned under Head 4g (Other grant income) of Table 7. However, where a portion of a grant from one of these sources was granted for research and spent on research, that portion may be returned as research income and returned under this column.

Column 9 (EU-based charities (open competitive process))

Should include all research grants and contracts income from an EU body with exclusively charitable purposes consistent with the definition set out in the Charities Act 2011 and which exists for the public benefit in a manner which is consistent with the Public Benefit Guidance published by the Charity Commission for England and Wales (https://www.gov.uk/government/collections/charitable-purposes-and-public-benefit).

For income from charities to be treated as awarded through open competition and peer review, and therefore included in Column 9:
- There should be evidence that a particular income stream or grant was available to more than one HEP through direct competition. This should be within a process where no credible candidate was excluded, and the income awarded to the HEP which demonstrated the highest quality research proposal according to external peer review.
- However, grants will also be accepted as complying with open competition and external peer review in circumstances where it can be shown that the charity took external expert advice on its choice of HEP to receive a grant, and either:
  - The charity had made it known that it was open to grant applications from other HEPs and these would present a competing call on the funds, even though the charity did not issue an open invitation to bid for the particular grant in question or
  - The charity restricted the funding opportunity on a reasoned basis that there were particular requirements of the project that could only be met by a limited number of HEPs. This could arise, for example, where a project required highly specialist expertise or facilities, or a specific regional focus.

The split between Column 9 (EU-based charities (Open competitive process) and other charities income in (EU other)) and other charities income in Column 11 (EU other) will be used in the Research Excellence Framework (REF).

Column 10 (EU industry, commerce and public corporations)

Column 10 should include all research grants and contracts income from industrial and commercial companies and public corporations (defined as publicly owned trading bodies, usually statutory corporations, with a substantial degree of financial independence) operating in the EU outside of the UK. Such income received from a multinational company should be coded depending on the location of the office making the award, e.g. a multinational with a French subsidiary making the award would be coded as EU.

Column 11 (EU (excluding UK) other)

Column 11 should be used for all EU-based non-competitive charities and any other EU income that cannot otherwise be allocated more specifically.

Columns 12, 13 and 14 (Non-EU)

Should include all research grants and contracts income from overseas bodies operating outside the EU.

Column 12 (Non-EU-based charities (open competitive process))

Should include all research grants and contracts income from a Non-EU body with exclusively charitable purposes consistent with the definition set out in the Charities Act 2011 and which exists for the public benefit in a manner which is consistent with the Public Benefit Guidance published by the Charity Commission for England and Wales (https://www.gov.uk/government/collections/charitable-purposes-and-public-benefit).

For income from charities to be treated as awarded through open competition and peer review, and therefore included in Column 12:
- There should be evidence that a particular income stream or grant was available to more than one HEP through direct competition. This should be within a process where no credible candidate was excluded, and the income awarded to the HEP which demonstrated the highest quality research proposal according to external peer review.
- However, grants will also be accepted as complying with open competition and external peer review in circumstances where it can be shown that the charity took external expert advice on its choice of HEP to receive a grant, and either:
  - The charity had made it known that it was open to grant applications from other HEPs and these would present a competing call on the funds, even though the charity did not issue an open invitation to bid for the particular grant in question or
  - The charity restricted the funding opportunity on a reasoned basis that there were particular requirements of the project that could only be met by a limited number of HEPs. This could arise, for example, where a project required highly specialist expertise or facilities, or a specific regional focus.

The split between Column 12 (Non-EU-based charities (Open competitive process)) and other charities income in Column 14 (Non-EU other) will be used in the Research Excellence Framework (REF).

Column 13 (Non-EU industry, commerce and public corporations)

Column 13 should include all research grants and contracts income from industrial and commercial companies and public corporations (defined as publicly owned trading bodies, usually statutory corporations, with a substantial degree of financial independence) operating outside of the EU. Such income received from a multinational company should be coded depending on the location of the office making the award, e.g. a multinational with a US subsidiary making the award would be coded as non-EU.

Column 14 (Non-EU other)

Column 14 should be used for all non-EU-based non-competitive charities and any other non-EU income that cannot otherwise be allocated more specifically.

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