Guidance

Engineering Biology Sandbox Fund: clarification questions

Updated 15 April 2024

Sandboxes

1. What is meant by a sandbox? What is in scope?

A sandbox is typically considered “an environment where firms can test new innovations under the supervision of a regulator. Regulations are often relaxed, or rules are adapted within the sandbox to allow for more innovative or creative working”.

The concept of a ‘sandbox’ is defined by regulators in different ways, but all sandboxes facilitate extensive dialogue between industry and a regulator to inform regulatory actions that strike the right balance between facilitating innovation and mitigating risk. A sandbox does not necessarily require legislative change or ‘relaxing’ regulations. Additionally, the outcome of a sandbox project should be uncertain as it is a research and development project.

The Fund will accept bids for all/any sandbox types.

Useful links to sandbox information and case studies are included in the annex.

2. Our regulations protect human and environmental health and cannot be relaxed. How could we run a sandbox?

The sandbox does not need to feature relaxation or regulatory experimentation. We acknowledge this is not a possibility for all regulators, nor do we want to facilitate potentially harmful practices through these sandboxes.

As discussed in response to the question above the definition of a sandbox is broad and could include sandboxes that focus on, for example, enhanced dialogue between businesses and regulators or collaboration between regulators and the scientific community to develop evidence-based assessments.

An example of such a sandbox can be found in the annex.

Eligibility

3. Who can apply for a grant?

To be eligible for funding you must be a body which meets the following criteria:

• exercises a ‘regulatory function’, as defined in section 32(2)-(4) of the Legislative and Regulatory Reform Act 2006;
• performs that regulatory function in Scotland, Wales, Northern Ireland, England or across the UK; and
• is subject to and follows the guidance in HM Treasury’s Managing Public Money handbook, or, if not subject to that guidance, is able to demonstrate compliance with Managing Public Money principles with respect to any funding received from DSIT.
• Be compliant with due diligence checks

4. Can a regulator collaborate or partner with others on an application?

We encourage regulators to involve other organisations where such participation is relevant to the purpose of the project and would be expected to improve or enhance the outcomes sought.

However, each application must have individual lead applicant (an individual regulator who exercises a regulatory function).

Subject to subsidy control requirements, the lead applicant may involve domestic and/or international partners (such as businesses, industry bodies, civil society groups, other regulators, local authorities or academic institutions) in their proposed project.

5. To be eligible to be the Lead Applicant, must you be exercising a regulatory function in the project? Or can you be lead applicant even if the regulatory function in the project is provided by someone else?

In principle the Engineering Biology Sandbox Fund requirement simply asks the lead applicant to be a body that exercises regulatory functions. It is not necessary the lead applicant to be exercising regulatory functions in the project itself. For example, if there are a number of regulators working on a cross-sector issue, then just one of the regulators needs to be lead applicant, regardless that it’s not the regulatory body for all areas that the project may be covering.

6. Who are the sandboxes for? Can international businesses apply to take part?

You will need to select participants for your sandbox based on predetermined criteria. Rationale for selection criteria should be discussed as part of your application.

The aim of the Engineering Biology Sandbox Fund is to accelerate regulatory reform within the UK for engineering biology sectors/products. Selection of sandbox participants should support this aim.

7. How will sandboxes work for regulations in the devolved space?

The Engineering Biology Sandbox Fund is open to members of the (Evidence-Based Research Network) EBRN. The EBRN is open to UK regulators who regulate or have interest in engineering biology products and services.

If your regulatory remit does not cover the whole of the UK, we encourage you to engage with your devolved counterparts and explore a collaborative approach. A collaborative approach could include your counterparts directly supporting the implementation of your sandbox or by you sharing learnings with counterparts during/after the sandbox exercise.

8. Can I resubmit a bid?

If your bid was successful in any round of the Sandbox Fund you cannot submit the same proposal in subsequent rounds. This includes bidding for additional funding for existing sandbox/es. If you wish to submit a bid in a subsequent round it must be materially different from any previous bids.

If your bid was unsuccessful because it did not meet the required standard, in any round of the Sandbox Fund, you will be able to submit another bid in subsequent rounds. This should be a materially different bid that implements the feedback received on the unsuccessful bid.

If your bid was of sufficient quality but you were not awarded a grant due to all funding for that round being allocated to higher scoring bids, you can submit the same (or an enhanced/amended) bid again in subsequent rounds.

9. Are there any sandboxes DSIT will not fund?

We will not fund projects that:

• are designed to enhance a regulator’s own performance without demonstrating significant positive benefits to businesses or innovators;
• would be reliant on ongoing government funding commitments beyond the duration of the project to deliver economic benefits;
• do not have (i) senior sponsorship at the applicant’s organisation and (ii) agreement that the findings, learnings and/or conclusions from the project will be shared with DSIT to facilitate the evaluation of the Engineering Biology Sandbox Fund policy measure as required by HM Treasury.

10. What happens if my bid is successful?

If your bid is successful, you will be notified via email with a letter. Successful applicants will need to undergo due diligence checks. After this a grant agreement will be issued which you will need to review and sign. Grants will be awarded as per the grant agreement, with payment happening in arrears (further detail in the Funding section). You will then initiate your sandbox and select businesses to partake in the sandboxes.

11. What happens if my bid is unsuccessful?

If your bid is unsuccessful, you will be notified via email with a letter. Unsuccessful applicants will receive feedback on their bid. Unsuccessful applicants are still eligible to apply in subsequent funding rounds. Further information can be found in the Eligibility section.

Creating an application

12. Can I submit additional evidence as part of my application, for example letters of support from collaborators?

You may provide supporting documents alongside your application to illustrate points made in the written answer/s of your application. You are permitted, for example, to upload letters of support from collaborators to demonstrate the collaborative aspect of your bid. These will not count towards your word limit.

However, supporting documents will not be awarded additional marks and should not be used to make additional statements/answers/points as these will not count towards the overall mark for an answer. Any additional statements/answers/points included in supporting documents will not be read or assessed.

You are not required to provide supporting documentation.

If you are unsure about including supporting documentation and would like to discuss this, please contact engineeringbiology@dsit.gov.uk.

Project design

13. When will the competition brief be available?

The competition brief will be made available when the application window opens, which is expected to be 1st February 2024. It will contain all the information required to support regulators design their bids, including full eligibility criteria, assessment criteria and how to apply.

14. What applications/products should my sandbox focus on?

The objective of the sandbox should be to accelerate regulatory reforms for engineering biology-derived products and improve the quality of decision-making when assessing these products. Your intervention can be focussed on products or services at any stage of technological development.

To ensure sandboxes are impactful for the bioeconomy you should target your sandbox towards areas where you identify challenges in your current assessment process. For example, current decision making could be limited by your understanding of the technology. You may wish to focus on an industry that is market ready but held back by regulations, a novel product that does not have a clear regulatory pathway or platform tech that could be utilised across numerous sectors like waste valorisation technology or CCU.

To identify target sectors, you can draw on the recent Engineering Biology Call for Evidence. A summary of findings has been shared with the EBRN. If you wish to discuss the findings further, please contact the Engineering Biology Team engineeringbiology@dsit.gov.uk. The Team will also be running drop-in sessions for potential applicants to discuss ideas, their application or anything else related to the Sandbox Fund.

You can also seek advice from the Regulatory Horizons Council and the Engineering Biology Steering Group (once established) to inform your sandbox design and target application/sector. Additionally, National Physics Laboratory and National Measurement Laboratory at LGC have expressed interest in supporting the design of sandboxes. These groups have expressed interest in supporting workshops and drop-in sessions. We encourage you to utilise their expertise and sector insights. The Engineering Biology Team can facilitate engagement as needed.

If further evidence is needed to inform design, we would encourage you to engage with your sectors and seek views from businesses.

Funding

15. How many application rounds will there be and when?

There will be two funding rounds. If there is money left over after the second round a third smaller round may be run.

The application window for the first round is expected to open on 1st February 2024 and remain open until April 2024. The exact deadline for applications will be confirmed when the application window opens.

The second round is expected to be in early 2025. DSIT will keep the EBRN informed of any major changes to this timeline.

16. How much funding will be available per round?

The first round will have a maximum budget of £1.8 million. The second round will have a maximum budget of £3 million. There may be a smaller third round if funding remains available after the second round.

17. Is there a maximum amount I can bid for?

The cap for any single bid is £1.6 million. However, we welcome bids for smaller projects as well. We encourage regulators to be creative in their thinking.

For reference the Regulators’ Pioneer Fund has funded sandboxes which you can see here. However, these projects were capped at £1 million.

18. How long can my sandbox run for?

All sandboxes should aim to ensure timely delivery of regulatory reforms to support the growth of the UK’s engineering biology sectors. Sandboxes must be a minimum of 6 months and a maximum of 24 months. This should include all recruitment activities and project work that will be claimed for.

All activities associated with the Sandbox Fund will need to be completed by 31 March 2027.

19. How long will funding last and when does it need to be spent by?

The Engineering Biology Sandbox Fund will be available for three years, beginning 1 April 2024 and finishing 31 March 2027. All activities associated with the Sandbox Fund must be completed by the 31 March 2027. Any activities carried out after that will not be covered by the Fund. You can invoice for activity that took place prior to 31 March 2027 up until 20 April 2027.

Any regulator wishing to run a sandbox for two years will need to have started the implementation of their sandbox by 31 March 2025, to ensure all activities associated with the Sandbox Fund can be completed and invoiced by the 31 March 2027.

20. How will my application be assessed?

Applications will be assessed against pre-defined assessment criteria. The assessment criteria will be detailed in the competition brief, but we would expect to see:

• A strong rationale for the project, including:
  • A clear articulation of why the sector(s), products or services you’ve chosen to focus on are important to the UK, and
  • how a sandbox will help to accelerate regulatory reforms (i.e anything that concerns improvements to the quality of government regulation), and improve the quality of decision-making
  • (Your intervention can be focussed on products or services at any stage of technological development)
• Evidence that your project is deliverable, and also that you have clear, workable plans for building on any learning.
• A description of why the proposed project provides good value for money and an explanation of how and why the availability of public funding makes a material difference to the ability of this project to progress (at all, and in the proposed timeframes), and what would happen in the absence of public funding.
• An itemised and clearly set out spend profile and costing of the activities.

Successful applicants will then need to undergo due diligence checks.

21. If successful, how will I receive my grant?

Grant payments will be awarded in arrears. You will be expected to submit an invoice monthly with supporting evidence of work done and costs incurred. DSIT will pay projects for actual costs and in arrears of work done. To support this, you will be asked to provide a spend profile as part of your application which you will be expected to adhere to. If you need to change your spend profile at any point during the project you will need to seek approval from DSIT.

22. What can the grant be spent on?

A grant will be awarded to cover the costs of the sandbox project only. The grant can only be used for non-commercial activities. Project overheads should be appropriately costed and cover only sandbox activities. Any overheads being claimed for should include sufficient evidence for the percentage claimed for is appropriate but should not be expected to exceed 20%.

You should commit your own resources to the project wherever possible and describe this in your application. This could include matched funding – funding provided by your organisation – to finance some of the activities or spend needed for your project as well as staffing resource and equipment. However, please note that matched funding (including the use of organisational resource) is not an eligible cost and will not be re-imbursed.

23. If the sandbox is a collaborative project (i.e more than one regulator involved) who should reclaim the project costs?

Each sandbox application should have a lead applicant. The lead applicant should reclaim the costs spent on the project. This can include costs that were incurred by themselves from working on the project or from other organisations also working on the project. The lead applicant will be responsible for cascading the funding down to other organisations in the project team.  We recommend that a consortium agreement (or similar) is set up and agreed between the members prior to funding being claimed.

24. Can I receive funding early to support the set-up of the sandbox, i.e recruitment?

We understand that recruitment activities, and project set up activities can take a while, as such we encourage you to include this time within your project duration when bidding. Any activities/expenditure undertaken/incurred before the grant agreement is signed cannot be claimed.

25. Can DSIT support regulators to recruit staff for sandboxes?

DSIT cannot support the recruitment of staff or expertise for sandboxes, this will need to be done by regulators as part of the project set-up. However, the DSIT Engineering Biology Team does have access to a network of engineering biology experts which we can share with regulators to help them identify suitable expertise, should they need it.

26. What subsidy control implications do I need to consider?

Any organisation claiming Engineering Biology Sandbox funding must be eligible to receive a subsidy at the time we confirm you will be awarded funding and must provide us with confirmation of eligibility.  It is your responsibility to make sure that your organisation is eligible to receive subsidies – if you are unsure, please take legal advice.

Some activities carried out by or on behalf of the regulator in relation to its statutory obligations or functions as a regulator may be considered an economic activity, and therefore may fall within subsidy control requirements. Any aid granted for non-economic activities should not be used to cross-subsidise commercial activities. Guidance is available here.

27. Are there any conditions to the funding?

Successful applicants will need to sign a grant agreement before funds can be released. The grant agreement will set out conditions for the funding.

If successful you will need to undergo due diligence checks and will be expected to undertake monitoring and evaluation exercises as part of the grant agreement.

Annex

Sandbox links:

• Ofgem - what is a regulatory sandbox?

• Regulatory sandbox: 5 key things to know

• Fintech Briefing Paper Regulatory Sandboxes

• State Policy Network - what is a regulatory sandbox?

• Financial Conduct Authority - regulatory sandbox