What is fec?

The Transparent Approach to Costing (TRAC) process has caused systems to be set up that allow the University to identify separately the costs relating to the core activities of Teaching, Research and Other (principally the cost of accommodation).

The main output of this has been the publication to HESA of these separate costs, broken down between public and non-publicly funded activities.

However, with these systems in place, it has become possible to cost up activities not only in total (eg the total cost of research in the University) but also at a much lower level: the level of the individual project. Full Economic Costing (fEC) is the name given to the costing of projects using TRAC methods.

("Project" can mean any activity: research project, teaching course, consultancy "job". However, research projects are the focus of attention at present.)

The particular elements of TRAC and fEC that should be noted are:

All costs get spread across Teaching, Research or Other. Indirect costs such as the professional services are costed in just as much as the direct cost of (say) a research assistant;
“Economic” costs are calculated and included. These are the costs of making the University sustainable: See Sustainability.

Against a background of reviewing the Dual Support Reform (DSR), the Research Councils are adopting this approach. An illustration of fEC can be seen by comparing their previous “costing” methods (in use until August 2005) with the fEC method.

Research Council Costing Methods
	Previous	fEC
Dedicated staff costs	X	X
Academic staff costs		X
Equipment costs	X	X
Other costs, T&S	X	X
Indirect cost @ 46%	X
Space cost		X
Indirect cost		X

What you will notice is that fEC includes all costs, Academic staff (PIs) costs, Space costs, Indirect costs (not at a prescribed 46% but at 100%). As it happens, the RCs have committed to paying 80% of the fEC.

(Please note the distinction between Costing and Pricing.)

The point is that the University will know (within certain tolerance limits) how much it truly costs to provide the service. This is extremely powerful information.