Meeting Objectives

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					                       Engineering and Physical Sciences
                               Research Council

Polaris House, North Star Avenue, Swindon, Wiltshire, SN2 1ET Tel (01793) 444000
                             Helpline (01793) 444100
      John Wand
   Programme Operations
      Tel: 01793 444457
       Polaris House
      North Star Avenue
      Swindon SN2 1ET
                                   Who funds HE research?

                                                             UK charities

                                 Insert pie chart of sources of HE
£ million, 1999-00 prices

                                                             UK Industry

                             Research income for most recent year

                            1500   available - see SET Statistics
                                                             Funding Councils

                                     1988-89       1999-00
                       HEI Research income
                 Expenditure by FCs and other funders

        Insert the slide from the XCR
1500           and the IiI report


       1988-89 1989-90 1990-91 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00

                                  HEFCs             Total project funders
             The problem: trends

 Stagnating QR alongside increased project
 Increased pressure on all HEI staff to conduct and
  publish research
 Poor understanding of cost base
 Neglect of long-run costs
 Low price culture
       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
Investing in Innovation/S&I Investment
 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

 Calculating full economic cost of individual
 Terms of trade between HEIs and RCs
             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
               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
                   Project Costing

                          Current    fEC
Dedicated staff              X       X
Academic staff -time         X       X
Academic staff - cost                X
Equipment                    X       X
Other costs, T&S             X       X
Indirect costs – 46%         X
Space charge – per FTE               X
Indirect cost – per FTE              X
     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)
RC Funding; current position
                                     FULL ECONOMIC COSTS

            Direct costs                                       Indirect costs

           eligible staff costs                Research council contribution to indirect costs =
       (e.g. Research Assistants,              46% of eligible direct staff costs
              support staff)

             other eligible
         costs (e.g. equipment)
                                                   The institution must find the rest from other

            ineligible costs
(e.g. salary of the Principal Investigator)

Eligible – RC will pay these costs
Shaded area – what RC will fund
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.
                    Proposal Form

 Directly Incurred
    Staff
    Equipment
    T&S
    Consumables
 Directly Allocated
    Investigators
    Estates
    Other Directly Allocated (eg pool technicians)
 Indirect Costs
 Exceptions
            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
     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
               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.‟
     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
            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
                  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
 Non RC funders – expect to fund all or part of FEC