HEADS OF DEPARTMENT OF MATHEMATICAL SCIENCES
Annex to Minutes of the Committee M eeting held on Friday 24th September 2003.
Presentation by John Wand (EPSRC) with input from Rama Thirunamachandran
(HEFCE) on Full Economic Costing.
The slides from John Wand’s presentation are on the website. What follows is some
additional comments and observations which arose during the meeting.
Comments on individual slides
a) The intention is to put real new money into the system, in order to address a
chronic under-investment of universities in infrastructure. (Slide 6) At present non
publicly funded teaching subsidises research. In the past year universities were
about £1bn ‘in the red’ on the research account.
b) Universities will need to derive their own costs, and there will inevitably be
differences, e.g. between near-London and out-of-London institutions. It is also
necessary to avoid institutions attempting to underbid each other in order to secure
more research grants – the key message here is that RCs will continue to place
most emphasis on the quality of the research proposed. There will also be different
rates for different groups of subjects. This is being addressed by a Benchmarking
exercise. (Slide 10) The QA process referred to is by KPMG.
c) The ftes in Slide 11 refer to the whole university, not individual subjects.
d) The ‘fixed %’ in Slide 12, initially paid by research councils, is likely to be around
70%.
e) Slide 12: Postgraduate studentships are excluded at the beginning. This will mean
that a project student and a DTG studentship will be equivalent in value.
f) Slide 15:An illustrative Proposal Form was published on 20 September. The
Estates component will be on an fte basis initially, moving to a square meters basis
later.
g) Slide 16:
 the initial percentage will be decided by the OST. The balance over (say)
70% will normally be funded by the QR component of central funding, but might
not be. The level of QR funding is to remain the same: this is a government
commitment.
 The P.I./CoI salary might be costed by an average across a university, or by
actual salary. This will be up to the university, but open to peer review. The PI
will be asked ‘how many hours will you spend on this project on average each
week?’ and the proportion of salary worked out on this, assuming the (somewhat
unrealistic) 37.5 hour week. The Research Council will not pay for more than
100% of 37.5 hours even over several projects.
h) Slides 17-18:
 the idea is that the volume of research will remain the same. The Research
Councils will work with universities to prevent a flood of applications.
 The Peer Review process will continue to look first at the quality of science
and ‘value for money’ or actual cost of a project will only be used as
secondary evidence at borderlines.

Small grants: there is currently no time component, only travel and similar
costs. Annette Bramley is currently thinking about how Full Economic
Costing will affect small grants.
i) Slide 19: possible danger that an academic who was being paid out of research
income for nearly a full working week (of 37.5 hours) might declare him/herself
unavailable for teaching. Decisions about paying of money to departments will be
up to the university; all the money will be paid by the Research Council to the
central university funds.
j) Slide 20: No old-style applications will be accepted from 1 August 2005.
Other discussion points from the meeting
a) The Pure Maths lone researcher: will there be pressure from universities to get
grants in order to pay his/her salary? No thoughts on this from EPSRC or HEFCE
except to remind us that there will be no increase in the volume of research
funded. The exact metrics used for volume are not quite clear but would be time
rather than output.
b) Career development: shortage of RAs in certain areas. HEFCE may fund
additional lectureships/RAs in some identified areas such as statistics. Also
EPSRC might take special action in some areas.
c) With number of staff in maths departments going down, the administrative burden
is shared among fewer staff. Such costs will contribute to the indirect cost
calculation, so an HEI with a large number of small units each with a high admin
burden might on aggregate have higher indirect costs. The HEI should therefore
be able to budget for such a burden. Of course this does nothing about the admin
burden itself!
d) The administrative costs of setting up a scheme within a university are likely to be
about £200k per institution for a research intensive HEI. Additional money is
being allocated to OST to distribute to universities which could be used for this
expense.
e) There are many unknowns in the introduction of Full Economic Costing 2005,
Differential Fees 2006 and the RAE 2008. The outcome of all these changes is
hard to predict with any confidence.
f) European grants which pay currently 20% overheads will become even more
uneconomic for universities to take on once FEC is introduced for Research
Council grants. The government is raising the problem with the EU. There are
similar concerns with other types of grants such as those from charities which
often pay no overheads at all.
Peter Giblin, Hon. Secretary, 27 September 2004