Full Economic Costing

In 2002 the UK government introduced a new model for costing research applications. All HEIs were asked to bring in TRAC (Transparent Approach to Costing) methodology.

The objective of FEC is to ensure the sustainability of the UK's research base, which it was felt would begin to fail if the old costing model was continued.

It is important to understand that whilst the university's costing package calculates FEC costs for all research applications not all funding bodies pay FEC. FEC is a government initiative and it tends to follow that most (not all) government funded funding bodies (e.g. Research Councils, NHS, Royal Society) will ask for costs to be presented in an FEC format and pay a proportion of FEC costs. Charities tend not to pay FEC but may still ask for it for their records.

In essence, FEC is about recording all the costs of a project including those that the University is covering (Directly Allocated Costs) and traditionally didn't report.  

FEC Terminology Simplified

Directly Allocated Cost - A research project cost that is paid from central university funds: e.g. maintenance of buildings or equipment, general laboratory consumables, the cost of staff paid by university funds but working on a research project.

Directly Incurred Cost - A cost that is paid directly from a research project account: e.g. travel, equipment, research assistant. It is usually a funders audit requirement that DI costs can be traced back to a source document (i.e. invoices for non-pay expenditure and payroll for staffing)

Estates - A formulaic approach to calculating the cost of maintenance and repair of the University's buildings and some of the equipment within those buildings. The formula is dependent on an annually set rate, the amount of researcher time on a project, the length of a project and whether or not the work is based in a lab. Researcher time is normally the FTE of academics and research associates however other types of employee such as nurses and technicians can count if they 'contribute towards the intellectual outcome of the grant'.

Lab Based - Any project requiring significant equipment or facilities or requiring additional space and servicing, above that of a typical social sciences department would normally be classed as lab-based.  For example, if your project requires higher than normal levels of power/utility/water consumption/specialist computer facilities/space which uses a least one additional element of cost such as comfort cooling, forced air extraction, high-power loads or major equipment facilities, then your project should be classed as laboratory based.. Projects which do not require these facilities are classed as non-lab based and have a different estates rate.

Pooled Lab Technicians - If a project is lab based it will attract a Pooled Lab Tech cost, this is a cost representing the cost incurred on a project of University employed laboratory technicians who help look after and run the laboratories and support services.

Indirect Costs - A formulaic approach to calculating the cost of overheads incurred by the University against a research project. The Indirect rate is set annually usually around February. Indirect costs may include things such lighting, photocopying, printer cartridges, central admin assistance etc. The calculation is driven by researcher time, researcher time is normally the FTE of academics and research associates however other types of employee such as nurses and technicians can count if they 'contribute towards the intellectual outcome of the grant'.

Banded Salary Rate - The University annually calculates a salary band for Clinical Professors, Professors, Grade 9 Academics and Grade 8 Academics. This figure is not the equivalent of a basic salary as it also includes employers National Insurance and Superannuation costs. Banded salaries should not be used when 'real' salary amounts are requested e.g. for fellowships.

There is a training presentation on costing titled Basics of Costing (PPT) available.



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Who to contact

Research Support Services Contact details

Tel - (0116) 252 2437 or (0116) 229 7763

Fax - (0116) 252 2028

E mail - RED@le.ac.uk