1
Implementation of Grants on a
Full Economic Cost Basis
John Wand
2
HEI Research Income
Expenditure by Funding Councils and other funders
2500
2000
1500
Insert the slide from the XCR
and the IiI report
1000
500
0
1988-89 1989-90 1990-91 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00
HEFCs
3
Total project funders
The Problem - trends
›
›
›
›
›
Stagnating Funding Council support alongside
increased project funding
Increased pressure on staff to conduct and
publish research
Poor understanding of cost base
Neglect of long run costs
Low price culture
4
Investing in Innovation/Science & Innovation
Investment Framework
›
›
›
›
›
Research in HEIs must be sustainable
HEIs must understand and recover FEC overall
Dual support system remains
Government is contributing very significant amounts
of money for sustainability:
 Science Research Investment Fund (SRIF)
increasing to a permanent stream of £500M per
year
 Extra quality related research funding (QR)
(£244M + SR2004)
 Extra money for Research Councils
(£120M + £80M)
Better cost recovery from others
5
Implementation
›
›
Calculating the full economic cost of
individual projects
Terms of trade between Research Councils
(RCs) and Research Organisations
6
Calculating Full Economic Costs - TRAC
›
›
›
›
›
›
TRansparent Approach to Costing
Activity based costing
Owned by the sector
Introduced at high level
Cost not income
Accepted by HM Treasury
7
TRAC Methodology
›
›
›
›
›
›
›
›
Extend to Project level
Robust, consistent
Balance accuracy and bureaucracy
Timesheets not required by RCs
Roll out by January 2005 (grant applications
to RCs from September 2005)
Produces a set of rates - indirect + estates
Quality Assurance process
Benchmarking exercise
8
Project Costing
Current
fEC
Dedicated staff
X
X
Academic staff - time
X
X
Academic staff - cost
X
Equipment
X
X
Other costs, T&S
X
X
Indirect costs – 46%
X
Space charge – per full
time equivalent (FTE)
X
Indirect cost – per FTE
X
9
Terms of trade between HEIs and RCs
›
›
›
›
›
›
Research Councils pay 80% of full economic
cost
Research Councils should meet close to
100% of fEC by 2010
Includes Fellowships
Excludes Research Students (for the
present)
100% of equipment over £50k
Cross Council project looking at
implementation
10
Research Council funding – current position
Direct Costs
eligible staff costs
(e.g. Research Assistants,
support staff)
Indirect Costs
Research council contribution
to indirect costs = 46% of
eligible direct staff costs
other eligible
costs (e.g. equipment)
ineligible costs
(e.g. salary of the Principal
Investigator)
11
The institution must find the
rest from other sources
Research Council funding – future model
Full economic costs
Direct Costs
Indirect Costs
Research Council pays 80% of full costs
The institution must find the rest from other
sources
12
Fund Headings for Research Grants
Directly
Incurred
Staff
Travel & subsistence
Equipment
Other costs
STAFF:
Research, Technician
Fellows, Visiting
Researchers, Other
Directly
Allocated
Investigators
Estates Costs
Other Directly Allocated
costs
Investigators
Indirect
Costs
Indirect costs
Exceptions
Staff
Equipment
Other costs
13
Project Students
Fund headings for
Research Grants
Directly Incurred
Staff
Travel & Subsistence
Other Costs
Equipment
14
STAFF:
Research
Technician
Other
Fellows
Visiting
Researchers
Classification of research costs within full economic
costs methodology
Directly Incurred (DI)
›
›
›
›
›
›
›
›
›
Staff costs
Travel & Subsistence
Equipment
Consumables
Books
Survey Fees
Purchase / Hire of vehicles
Publication costs
Recruitment & Advertising costs
15
Fund headings for
Research Grants
Directly Allocated
Investigators
Estates Costs
Other Directly Allocated
costs
16
Investigators
Classification of research costs within full economic
costs methodology
Directly Allocated (DA)
›
›
›
›
›
›
Investigators costs
Costs of pooled staff
Estates costs
Usage costs of research facilities
Central & distributed computing
Charge out rates for shared equipment
17
Fund headings for
Research Grants
Indirect Costs
Indirect Costs
18
Classification of research costs within full economic costs
methodology
Indirect Costs
›
›
›
›
›
›
General office & Laboratory consumables
Library Services / Learning Resources
Typing / Secretarial
Departmental Services
Central & Distributed Computing
Cost of Capital Employed
19
Fund headings for
Research Grants
Exceptions
Staff
Other Costs
Equipment
20
Project students
Schemes
›
›
›
›
›
Small Grants - £20k
Overseas Travel Grants
Visiting Fellowships
Workshops/Symposia
Fellowships
21
Timetable
October 2004
Seminars for administrators
Autumn 2004 Spring 2005
Business preparations by Councils
Spring 2005
Seminars for Academic / Peer review
June 2005
New application form available
31st July 2005
Last Date for submission of pre fEC
applications
1st September
2005
First date for submission of fEC
applications
31st March 2006
Last date for award of pre fEC grants
22