About Full Economic Costing (fEC)
The introduction of the costing of university research on a fEC basis is a Government-led initiative.
Extensive analysis has demonstrated that across the Higher Education sector, current costing and funding arrangements have led, over many years, to the significant under-funding of the true costs of research.
fEC is designed to enable universities to move towards a financially sustainable research environment, supporting both the true costs of undertaking research projects and enabling re-investment in research infrastructure.
The application of the fEC methodology will bring transparency to the cost of research. This will allow universities at institutional, faculty, and department levels to manage research in terms of a portfolio of programmes and projects. The funding provided by a sponsor can be considered in relation to the fEC, as well as non-financial benefits including public good and research outputs.
It should be noted that government funding of research continues to be through the Dual Support System, with research funded through both Funding Council QR support (RAE-dependent) and Research Council project and programme support.
The Research Councils are leading the way in the implementation of fEC. All applications to Research Councils must be made on the new fEC basis.
How fEC is calculated
Under fEC, the full economic cost of a research project is calculated. This is made up of:
- all staff costs, including all investigator costs (principal investigators, co-investigators and co-applicants), research staff and technician costs
- non-staff direct costs, including, for example, consumables, travel and equipment
- a direct estates cost
- indirect costs
The main changes to the costing of Research Projects as a result of fEC are that:
- Principal and Co-Investigator costs should be included
- a charge for Estates and a charge for Indirect costs, based on relevant FTEs, will replace the charge previously included for overheads
Investigator costs will be estimated when proposals are prepared. In addition to providing information on other staff costs and direct costs, Principal Investigators will include estimates of the time that they, and co-investigators, will spend working on the project.
Investigator (academic) and research staff time on the project contribute to the calculation of the direct estates costs and indirect costs.
It is important to recognise that the application of fEC allows us to calculate the full COST to the University of undertaking the research. This is distinct from the PRICE that is charged for the research. Price may be determined by the funding arrangements of the research sponsor, as in the case of the Research Councils, or by negotiation, as in the case of industry sponsors.
Academic salary costs - banded rates
In order to ensure confidentiality relating to salary information of members of established academic staff, the University has elected to use averaged rates for each category of academic staff.