What is FEC? Full Economic Costing

Background  1998 Spending Review – Extra Research Funding  TRAC: All Universities were in deficit for research Significant underspend in infrastructure  In 2002 additional funding was awarded plus initiatives like SRIF 1 and 2, SRIF 3, JIF, and SPUR 1 and 2 in NI  Overall aim of FEC is sustainability of the research base

What is Sustainability? The University is being managed on a sustainable basis. If taking one year with another it is recovering its FEC across its activities as a whole and is investing in its infrastructure at an appropriate rate to maintain future productivity This will require the calculation of FEC

FEC Cost Types and Definitions Directly Incurred (DI): Expenditure that is incurred specifically for the project such as new staff, travel, consumables. Directly Allocated (DA): Estimated costs of services (such as existing staff time and facilities) used by the project that are shared by other activities and projects. Indirect: University Overheads allocated to the project. Central administrative cost.

Facility (i.e. estates) and overhead (i.e. indirect) costs are based on the academic/research hours spent on the project. Estates Cost: £15,697/FTE Lab £9,417/FTE Desk Indirect (ID):£30,380/FTE FTE, Full time equivalent (1 person for 1 year x 100%) Procedure to establish the rates are audited.

Research Council Definition  Standard Year =1,650 hrs =44 wks  Hours in Standard Week=37.50 hrs

Choices – Costing v Pricing  No choice with cost – FEC method gives cost  Do have choice with price i.e. 50% of FEC 70% etc Funder ‘type’ sets the %  Strategic pricing at less than 100% of FEC will require high level approval

FUNDER% FEC Research Councils80% UK Charities *No change to present methodology European Commission *No change to present methodology Local Authority100% Industry/Commercial100% UK Government **100% NHS Trusts80% R&D Office80% The proposed costing and pricing policy for University of Ulster external grants is as follows: - * FEC will still be calculated – Partnership Fund ** NI Departments, particularly Invest NI, will be kept under review for strategic reasons to see if 100% will apply to projects funded from this source