Full Economic Costing
Overview
Full Economic costing (FEC) was introduced to the HEI sector to improve the sustainability of University Finances and to ensure that Research projects in particular are accurately costed and a suitable price then charged. The Government and Funding Councils for some time have been concerned that the sector has not been pricing adequately for work and that this was leading to serious weaknesses in sustaining the long-term infrastructure.
Significant changes include the calculation of Estates and Indirect costs to a project and the inclusion of a cost for a Principal Investigator's (PI) time to cover the less obvious costs of the project. Research Councils have currently agreed to pay 80% of FEC though they hope to move to 100% sometime in the future.
There are four major parts to an application under FEC -
Directly incurred costs
- Research staff
- Technical and clerical staff
- Non-staff costs (consumables, equipment purchase, travel & subsistence, recruitment costs)
Directly allocated costs
- Principal and co-investigators’ time
- Estates costs (including the infrastructure adjustment)
- Laboratory technicians and major research facilities
Indirect costs
- These costs are attributed to projects through a proxy – £/FTE
Exceptional Items
- Equipment over £50k
- Student fees and stipend
For a more in depth description of FEC please see the Joint Costing and Pricing Steering Group web site.