State aid measures
Zenzic SME Scale Up Programme – the “Scheme”
The legal basis for the Scheme is the Science and Technology Act 1965.
The projects that constitute CAM Testbed UK are completing their build phase and making the transition into commercial operation, so there is an opportunity now to meet another of the original policy objectives of the testbed programme; namely removing barriers to entry for SMEs and start-ups. This need was identified through the 2016 Call for Evidence which informed the original business case for the programme, and “was repeatedly cited [by industry] as essential to securing UK competitive advantage”. The opportunity to safeguard and support new UK capabilities is now all the more important as the country seeks to accelerate growth out of the sharp economic downturn. Also, importantly this programme will signal that the UK government is investing in this sector when budgets have been stretched and act as a focal point to engage Ministers in discussions about alternative models to deliver growth in this sector and demonstrate global industry buy in to the UK.
Ultimately this programme will do three things. Firstly, it will help SMEs safely test, develop, and prove their products in realistic operating environments, while maintaining greater control over their corporate destiny which otherwise might be well beyond their budget, compelling them to seek more affordable opportunities overseas. Secondly, by channelling activity through CAM Testbed UK this programme will grow a business pipeline for CAM Testbed UK organisations that generates a nominal return on the investment made by government and the testbeds themselves and, more importantly, create collateral showing diverse usage of the CAM Testbed UK facilities for dissemination to the global market for testing. And thirdly, by ensuring that SMEs can prove to both customers and investors that their solution really is market-ready, this programme will benefit the UK economy by safeguarding existing jobs, creating new jobs, increasing sales and increase investment for SMEs. Through these activities the programme will use the product development process as a proof point for UK capabilities which will attract global corporates to invest further in both CAM Testbed UK and the UK’s broader CAM ecosystem.
The Scheme will use open, transparent and competitive processes to procure the projects that the Scheme wishes to fund (using, where appropriate, independent expertise to support the procurement activities). The SME Scale UP is open to UK based SMEs and, through review and consensus, applicants will be selected on merit for entry on to the programme, with presentation to CCAV for final ratification.
Projects will be funded on a shared basis, with SMEs making relevant contributions to project costs. The actual amount of public funding from the scheme for each project will depend upon the nature of the funded R&D activity and, where it constitutes State Aid, be subject to the maximum intensities and relevant provisions under the GBER Framework
The Scheme is required to provide annual returns to the UK Government detailing the State Aid provided under the Scheme and to maintain detailed records regarding State Aid. Such records must contain all of the information necessary to establish that the relevant conditions laid down in the Regulation have been fulfilled. Records must be maintained for at least 10 years from the date on which the State Aid was granted. The information which must be provided to the Scheme and/or retained by the recipients of the State Aid will be set out in the Grant Offer Letter between the Scheme and the recipient of the State Aid.
The Scheme (including where appropriate, with the support of independent experts) will ensure the objective assessment of the incentive effect for each beneficiary in a project.The Scheme will ensure compliance with the cumulation rules. All sources of public funding shall be taken into account when considering cumulation to ensure that any relevant State Aid intensities and/or maximum State Aid amounts are not exceeded.
Type of Aid under the Scheme
The relevant Scheme State Aid is governed under Commission Regulation (EU) No 651/2014 of 17th June 2014: General Block Exemption Regulation (GBER) under Article 25 (Aid for Research, and Development projects) and 28 (Innovation Aid for SMEs).