SCOTTISH LOCAL AUTHORITY SUPPORT TO SMES FOR CONSULTANCY AND FOR RESEARCH AND DEVELOPMENT (COMMISSION REGULATION EC No 800/2008 – OJEC L 214 0F 9 AUGUST 2008 Reference X161/2008)

LEGAL CONTEXT

In terms of Section 20 of the Local Government in Scotland Act 2003 (http://www.opsi.gov.uk/legislation/scotland/acts2003/asp_20030001_en_1) and in accordance with the terms of Commission Regulation No 800/2008 (the “Regulation”), Scottish Local Authorities may provide aid towards

a) Consultancy support for Small and Medium Sized Enterprises (SMEs) in accordance with Article 26 of the Regulation

b) Support for the participation of SMEs in fairs in accordance with Article 27 of the Regulation; and

c) Support for research and development projects in accordance with Articles 31 to 33 of the Regulation

OBJECTIVES OF THE SCHEME

The scheme will support, on a discretionary basis, the economic development of SMEs in Scotland through the provision of consultancy services and support for research and development. Assistance under this scheme will be the minimum necessary to achieve the above objectives.

ELIGIBLE SECTORS

The scheme shall apply to all sectors of the economy with the exception of the sectors referred to in Article 1 (sections 3 to 6) of the Regulation.

ELIGIBLE COSTS

For consultancy support granted in terms of Article 26 of the regulation, gross aid of up to 50% of the costs may be awarded in respect of the use of outside consultants, provided the services concerned are not continuous or periodic, and do not relate to the enterprise’s usual operating expenditure such as routine tax consultancy, regular legal services or advertising.

For participation in trade fairs in terms of Article 27 of the Regulation, gross aid of up to 50% of the costs of renting, setting up and running a stand at a fair or exhibition may be awarded. This applies only to an enterprise’s first participation at any particular fair or exhibition.

In respect of Research and Development activity by enterprises, support may be awarded in terms of Article 31 of the Regulation towards certain eligible costs of the projects relating to fundamental research, industrial research and experimental research to the extent, and period, that these are used for the research project. Eligible costs are those relating to

Personnel costs;

• Instruments and equipment

• Buildings and land;

• Contractual research, technical knowledge and patents bought or licensed from outside sources at market price;

• Additional overheads incurred directly as a result of the project; and

• Other operating expenses including costs of materials, supplies, similar products.

In respect of aid for technical feasibility studies preparatory to industrial research or experimental development activities in terms of Article 32 of the Regulation, the eligible costs shall be the costs of the study.

For activities undertaken by SMEs in connection with obtaining and validating patents in terms of Article 33 of the Regulation, eligible costs will be:

All costs preceding the grant of the right, including costs relating to the preparation, filing and prosecution of the application as well as the costs incurred in renewing the application before the right has been granted;

Translation costs and other costs incurred in order to obtain the granting or validation of the right in other legal jurisdictions; and

Costs incurred in defending the validity of the right during the official prosecution of the application and possible opposition proceedings, even if such cots occur after the right is granted.

AID INTENSITIES – RESEARCH AND DEVELOPMENT

In conformity with Article 31 of the Regulation, the maximum amounts of aid which can be given towards these costs are set out below:

	SIZE OF ENTERPRISE
Type of activity	Small	Medium	Large
Fundamental research	100%	100%	100%
Industrial research	70%	60%	50%
Industrial research where collaboration between undertakings, between undertaking and a research organisation or results are widely disseminated *	10%	20%	30%
Experimental development	45%	35%	25%
Experimental development where collaboration between undertakings or between undertaking and a research organisation *	60%	50%	40%

In respect of aid for technical feasibility studies in terms of article 32 of the Regulation, the aid intensity for SMEs shall not exceed 75% of the eligible costs for studies preparatory to industrial research activities and 50% of the eligible costs for studies preparatory to experimental development activities. For large enterprises the aid intensity shall not exceed 65% of the eligible costs for studies preparatory to industrial research and 40% of the eligible costs for studies preparatory to experimental development activities.

In respect of aid for industrial property rights cost for SMEs in terms of Article 33 of the Regulation, the aid intensity shall not exceed the intensity for research and development projects cited above in respect of the research activities which first ked to the industrial property rights concerned.

DEFINITIONS

The expressions “fundamental research”, “industrial research” and “”experimental development” shall be defined in conformity with Article 30 of the regulation.

“Small” and “medium” sized enterprises shall be defined in conformity with Annex 1 of the Regulation.

BUDGET

The estimated budget of the scheme is £3m per annum.

DURATION

The scheme will operate from 1st January 2009 to 31st December 2013.