1. Engineering and Physical Sciences
Research Council
Polaris House, North Star Avenue, Swindon, Wiltshire, SN2 1ET Tel (01793) Helpline (01793)

2. John Wand Programme Operations Tel: 01793 444457
EPSRC Polaris House North Star Avenue Swindon SN2 1ET

3. Insert pie chart of sources of HE Research income for most recent year
Who funds HE research?
Insert pie chart of sources of HE
Research income for most recent year
available - see SET Statistics

4. Insert the slide from the XCR
HEI Research income
Insert the slide from the XCR
and the IiI report
Expenditure by FCs and other funders
500
1000
1500
2000
2500
HEFCs
Total project funders

5. The problem: trends Stagnating QR alongside increased project funding
Increased pressure on all HEI staff to conduct and publish research
Poor understanding of cost base
Neglect of long-run costs
Low price culture

6. The problem: present position
Under-investment in university infrastructure highlighted in the Dearing Report in 1997
Transparency Review (2000) detailed
Backlog
Recurrent gap
Investing in Innovation (2002) confirmed a “persistent failure to invest in research infrastructure”
S&I Investment Framework (2004) affirmed need to address this

7. Investing in Innovation/S&I 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:
SRIF increasing to a permanent stream of £500M per year
Extra QR (£244M + SR2004)
Extra money for Research Councils (£120M+£80M)
Better cost recovery from others eg Government Departments

8. Implementation Calculating full economic cost of individual projects
Terms of trade between HEIs and RCs

9. TRAC Methodology TRansparent Approach to Costing
Activity Based Costing
Introduced at high level
Teaching (public & non publicly funded)
Research (PF and NPF)
Other
Cost not Income
Accepted by HMT

10. TRAC Methodology Extend to Project level Robust, consistent
Balance accuracy and bureaucracy
NO Timesheets
Roll out by January 2005 (grant applications to RCs from Sep ‘05, money paid out from April 2006)
QA process
Benchmarking exercise

11. Project Costing Current fEC Dedicated staff X Academic staff -time
Academic staff - cost
Equipment
Other costs, T&S
Indirect costs – 46%
Space charge – per FTE
Indirect cost – per FTE

12. Terms of trade between HEIs and RCs
RCs pay a fixed % of full economic cost
Moving to ‘close to’ 100% by 2010
Includes Fellowships (including RS, RAEng)
Excludes PGR (for the present)

13. RC Funding; current position
FULL ECONOMIC COSTS
Direct costs
Indirect costs
eligible staff costs
(e.g. Research Assistants,
support staff)
Research council contribution to indirect costs = 46% of eligible direct staff costs
The institution must find the rest from other sources.
other eligible
costs (e.g. equipment)
ineligible costs
(e.g. salary of the Principal Investigator)
Eligible – RC will pay these costs
Shaded area – what RC will fund

14. RC funding; proposed model
FULL ECONOMIC COSTS
Direct costs
Indirect costs
Research Council
pays approx 70% of full costs
The institution must
find the rest from other sources.

15. Proposal Form Directly Incurred Staff Equipment T&S Consumables
Directly Allocated
Investigators
Estates
Other Directly Allocated (eg pool technicians)
Indirect Costs
Exceptions

16. Issues for move to FEC What percentage of FEC? roughly 70%
Same for all disciplines/RCs? (Yes)
Paying for P.I. salary? (Yes)
37.5 hr working week for costing purposes
Departments with no QR? (Yes)
Timescale and transition (Sept 2005)
Monitoring and adjustments

17. Issues for RCs for move to FEC
Monitoring academic time on projects etc
Application numbers
Differences between indirect cost rates ‘legitimate’ or inefficient?
Verification/audit
Assessment – value for money?
Mathematics Small Grants

18. Value for Money
‘Research grant applications will be externally peer reviewed in the same way as they are at present. …. This will not require a fundamental change in the role of the Committees whose job has always been primarily to advise on the quality of science described in the applications.’

19. Issues for HoDs in move to FEC
Academic time – balance between T & R
Budget
are costs being recovered?
What does the department pay for?
Access to QR funds

20. Provisional Timescale
New data requirements and processes (Paper based) September 2004
Administrative Workshops Autumn 2004
Training of peer reviewers mid 2005
Electronic forms available mid 2005
Applications on new basis from Sept 2005

21. Culture Change
Project costing methodology to be rolled out further than TRAC in HEIs (will impact on P.I.s)
HEIs know costs and set prices accordingly
RCs operations will need to change (brief peer reviewers)
Non RC funders – expect to fund all or part of FEC