Cost Category Budgets

At the start of your project, as part of your proposal to Innovate UK, you are required to submit a forecast of the costs expected to be incurred within each cost category throughout the claim period. At such an early stage, this inevitably involves a high degree of estimation.

When the grant is awarded, these forecasted totals are also reflected within the Offer Letter. From Innovate UK’s perspective, these figures represent the maximum amounts that can be claimed within each individual cost category.

Unfortunately, it is not as simple as claiming the overall project costs freely between categories.

For example, if by the end of the project you have exceeded your Labour costs by £20,000, but this is offset by an underspend of £30,000 on Subcontractor costs (perhaps because more work was completed internally than originally anticipated), Innovate UK would typically disallow the excess Labour claim. This means you could lose out on funding for both the additional internal labour incurred and the unused subcontractor budget.

The good news is that there is a way to avoid this.

Where costs are expected to move between categories, it is important to act promptly. A Project Change Request (PCR) can be submitted through the Innovate UK portal to request the reallocation of budget between cost categories.

These requests are commonly approved by Innovate UK; however, they must be submitted and approved before the final claim is completed.