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Grants – the dreaded clawback

Published: 3rd October 2008

In Queen Mary University of London v HEFCE we see the perils of not even understanding the terms of grants, let alone complying with them.

On receipt of an application from QMU, HEFCE did two things. It granted them a lump sum and also sanctioned the release of other funds in the form of a research support grant.

When the auditor turned up, they decided that QMU had breached the requirements of the research support grant in that they had not opened up the distribution of the charitable funds to open competition. QMU argued that it had done just that and so the courts had to decide what "open competition" meant.

To cut a tedious tale short, QMU didn't win and had to repay the research support grant.

In a pointless piece of legalese, the judicial review held that the auditor didn't have the power to require QMU to repay the money and the chief officer of HEFCE should fire the bullet. We're still waiting for that.

We often see that the terms of grants aren't scrutinised in the same way as, say, research contracts - as the terms aren't usually negotiable. This is a mistake, as this case demonstrates. Even if the terms cannot be changed, they can still be analysed from a risk management viewpoint so that compliance is built into the performance of the grant.

At Mace & Jones we have particular expertise in this regard, as we act for sector funders as well as having many years hands-on experience at an institutional level.