February 2018

Full Ecomonic Costing (fEC): Costing & Pricing Jennifer A Gilmartin Associate Director Research and Enterprise Head Research Services

2

“a price which, if recovered across an

institution’s full programme, would

recover the total cost (direct, indirect

and total overhead) of the institution,

including an adequate recurring

investment in the institutions

infrastructure”

Full Economic Costing (fEC) April 2006

….(included in grant Terms & Conditions)

Direct Costs

Project Costs available to

Principal Investigator

Estate Costs

Indirect Costs

Infra-structure Technician Costs (Lab Based only)

fEC comprises

Estate Costs:

Two rates: laboratory

and office/classroom

Includes:

energy/water costs,

depreciation of

buildings and

equipment,

cleaning/custodial

services, repairs &

maintenance

Indirect Costs:

Library,

HR Services,

Payroll,

Central IT,

Finance,

Research Operations

Office

Includes

departmental support

staff, office supplies,

postage, computers

Direct Costs

Project Costs available to

Principal Investigator

Estate Costs

Indirect Costs

Infra-structure Technician Costs (Lab Based only)

Costs

incurred at

Department

and

University

Level

Sustainability

Definitions

5 5

Directly Incurred

Directly Allocated

Directly Incurred Items or services incurred or purchased specifically for the project (audit trail to quantify) Consumables Travel/Conferences Post Doc New equipment Service

Directly Allocated An estimate where part of an existing resource is utilised

(subject to audit to ensure correct rates are used):

20% PI time (as appropriate to project)

pooled technician

access to a shared Major and Small

Research Facilities (MRF and SRF)

MRF and SRF; other Shared Equipment

1. Requirements for costing and charging Research Facilities

are defined in TRAC guidance (National requirement)

2. Charges for equipment/ facility usage relating to more than

consumables = SRF

3. Facilities/shared equipment not costed as MRFs/SRFs are

included in Estates rates for fEC

4. Annual exercise initiated by the TRAC Manager

MRF and SRF in Worktribe: 2 rates

Funding

Research Councils

AHRC, BBSRC, EPSRC, ESRC, NERC, MRC,

STFC

Part funding on project by project basis (RCUK, UK Government

Departments, NHS)

Part funded through QR Annual HEFCE block grant –

based on REF results

Some funding direct from Government departments

Dual Support

Government Funding

Research Councils fund:

80% of the Full Economic Cost of each grant (some

exceptions)

The remaining 20%:

made up in part via HEFCE REF block grant

Charity QR - income stream to supplement DI research income from UK Charity sponsors, but less than fEC, so still a gap in

cost recovery

Business QR - income stream to encourage industrial interactions

Government Funding

CGRF QR

Included in

mainstream QR

GCRF QR:

£0.8m

for 2017/18

to spend on ODA compliant activity

NEW

REF QR 2017/18

£16.8M

Charity QR

£1.3M

Business QR

£0.3M

From TAS to fEC via TRAC

Time Allocation Survey:

5 separate weeks (Nov, Feb,

March, May, July)

Half the university; alternate

years

Calculate proportion of time

allocated to 9 categories

FTE = Denominator

Academic time

Researchers

PGRs (weighted Estate

rate 0.5/0.8; Indirect 0.2)

Calculate total

(weighted) FTE on

census date in October

TRAC methodology

Separate presentation for

Time Allocation Survey

TRAC methodology Apportion R time (FTE) as identified in TAS

Total University “spend” on R

Double index = total cost of supporting research per

year, starting 1-2 years’ time

Divide by the FTE = cost per FTE per year

New November 2017: include forward looking costs

2 previous years + current year + 3 future years ÷ 6

Direct Costs

Project Costs available to

Principal Investigator

Estate Costs

Indirect Costs

Infra-structure Technician Costs (Lab Based only)

Non-direct costs

IDC Estates Infra-

structure Techs

Academic

Time

Research Staff Time

Research

Student

Time

Costs per FTE for each Category (Indirect, Estate and Background

(Infrastructure) Technicians

Let’s bake a cake!

(Exercise on

understanding

the costs)

Price

Less than cost

Same cost

Greater than cost

fEC recovery by sponsor type

Sponsor type Cost recovery expectations

Research Councils 80% fEC (exceptions, e.g. equipment)

Note: HEFCE provide QR funding to

supplement direct grant funding

Charities 100% direct costs plus maximum overhead

allowed within sponsor terms

UK Government departments 80% fEC minimum, must cover direct costs

EU commission 100% direct costs plus 25% overhead

Overseas

government/Education

In line with their standard terms, but must

meet 100% of direct costs

Industry IP Retained / Sold Not normally less than 100% fEC

RCUK pricing model

Direct costs (including 5% FTE staff time) £97,416

Indirect and estate costs, non-lab rate £2,584

Total £100,000

Funded at 80% £80,000

• shortfall on direct costs

• negative contribution

• re-cost or different funder

RCUK pricing model

Direct costs (including PI at 50% FTE time) 74,164

Indirect and estate costs, lab rate (+ technician) £25,836

Total £100,000

Funded at 80% £80,000

• positive contribution, but

• £100k max now taken mostly with salary and fEC

• Can the project be delivered?

H2020 pricing model

Direct costs (including PI at 5% FTE time) Euro

100,000

25% overhead 25,000

Total 125,000

Funded 125,000

• positive contribution

• Suitable call for this scale of project?

Checking cost recovery in Worktribe

University cost vs Funder price

Review cost vs price

handout

More information

Spring Symposium: Contracts & Tenders; VIP (VAT, Insurance and

Procurement)

TRAC https://www.york.ac.uk/staff/finance/transparent-approach-to-

costing/

fEC https://www.york.ac.uk/staff/research/external-

funding/applying/costing/fec/

RGC https://www.york.ac.uk/staff/research/external-funding/support-

contact-rsg/

Thank you