It is interesting to note that there seems to have been an increase in the number of successful grant applications recently, despite the recession and increasing budgetary pressure on grant awarding organisations such as the South West Regional Development Agency (SWRDA).

Last month, for example, a £1m grant was announced towards safeguarding the iconic X-FAB business and just last week The Eurotech Group plc announced its major expansion plans supported by a substantial grant from SWRDA. We were pleased to advise both companies on their grant applications and are looking forward to similar announcements over the next few weeks.

So, what makes a successful grant application? Or as someone once said to me, “Dave, if you were a chef, what are the ingredients for a good (grant) cake?”

Need
First of all, almost every grant scheme requires the applicant to demonstrate a need for the grant; that the project will not go ahead without it.

Our recent Grant for Business Investment applications have demonstrated the following examples of need: choice of location, reducing a funding gap, cashflow shortfall and internal payback. For property related grants such as Gap Funding, the need for grant argument is generally the difference between market value and build cost. Even environmental-based grant schemes such as for biomass plants need applicants to demonstrate a difference in costs between traditional fossil-fuel based boilers and the biomass equivalent

Location
All areas of the South West have access to a number of grants. Cornwall has both the largest number of grant schemes and the highest level of funding, followed by Plymouth, then the rest of Devon.  Some grant schemes are location specific, others such as SWRDA Research and Development grants and Department of Energy and Climate Change or Carbon Trust renewable energy grants cover the entire region.

Expenditure
Next, there must be expenditure. This can be of either a fixed nature, such as land, buildings, plant and equipment, or  a revenue nature, such as training, labour costs and consultancy fees. The project  could also comprise a mixture of both.

However, in answer to the second most popular question I am asked, “No, almost without fail, expenditure incurred before receipt of a grant offer is ineligible.” Grant funding is rarely retrospective.

Employment
Most grants are created to help make UK PLC great again by providing economic benefits in some shape or form. The most common one is employment.

Ideally, most grant schemes require job creation, but in today’s economic climate jobs safeguarded are equally important. Indeed, some 70% of the employment implications of our recent grant applications have involved job safeguarding rather than creation. However, there must be a genuine threat to jobs.

One recent change in grant priorities is the quality, rather than quantity, of jobs. Several years ago, I was involved in securing grant funding for most of the major call centres in Plymouth. Nowadays, most grant awarding organisations seek skilled, quality, well paid jobs, so it is unlikely that a grant application for a standard call centre would be successful today.

Qualitative factors
There is also growing emphasis on qualitative factors such as innovation, economic outputs and the environment. Grant awarding authorities increasingly look for projects  which  will:

• help introduce innovative products, processes, technology or materials
• demonstrate benefits to the region; for example, there will be no negative impacts on any local competitor or the market is wider than the South West
• demonstrate a significant contribution to making the South West a low carbon economy.

So, these are the key ingredients. The next step is to prepare the grant application documentation.

For further information:

Please contact David Armstong, our Grant Specialist for more details.

Francis Clark has offices in Exeter, Plymouth, Salisbury, Taunton, Tavistock, Torquay and Truro. Francis Clark is the winner of the ‘Auditor of the Year - Mid Tier’ in the National Financial Directors’ Excellence Awards 2011, and LexisNexis Best General Tax Practice Award 2009. More information is available by logging on at our Online Information Centre