Managing Research within FECDick Kitney (Dean of Engineering) &

John Green (Chief Co-ordinating Officer)

Spring 2006

Context

• Drop in volume and value of research council income• Overspend on research contracts of £4.5m• But also many accounts underspent at close• From 1 August Research Services rolling out new systems to

provide controls for financial management of contracts• No increase in peer reviewed charity research in real terms

over four years• New HEFCE figures show Imperial to be losing out on

research contracts to other universities• Challenge for Imperial to price research bids competitively• Imperial must develop a more commercially minded

approach

Research Expenditure - Charities and Total by institution

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Imperial Cambridge Oxford UCL

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Charities Charities

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Charities

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Research Expenditure - Research Councils and Total by institution

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Academic year

ResearchCouncils

ResearchCouncils Research

CouncilsResearchCouncils

Total Total Total

Total

What does this mean?

• On face of it, looks bad – shows a decreasing research expenditure

• Why is expenditure important?- that’s what counts as the volume for HEFCE grant- that’s what counts as the volume for RAE

• BUT … the amount of money unspent on grants is increasing – so we are getting the awards but not spending on the grant

• Rainy day strategy is counter-productive

Annual amount awarded by university by award or start date - All Research Councils

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Imperial Cambridge Oxford UCL Totals at 25%

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Sum of Value

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Calendar Year

Key message

• Need to ensure spend on grants• Therefore need to manage them more effectively• Develop resource within departments to manage this

process• But must do it over next 12 months to count to RAE• Order book from Research Councils improved• Now need to SPEND!

What is a project’s full economic cost?

• Directly incurred costs– research staff, travel, consumables, dedicated technical

(timesheets)/clerical staff costs, non-staff costs

• Directly allocated costs– PI & CoI time– “estates” costs [= no of FTEs x “estates rate”], out of which– ~10 major facilities costs have been removed– charge-out rates for ~10 major facilities

and later … charges for pooled/shared lab technicians

• Indirect costs– general office and basic lab consumables, central services,

admin/ secretarial [= no of FTEs x “indirect cost rate”]

What is the “Estates Rate”?

• Term imposed by TRAC methodology – standard term used by HEFCE, Research Councils etc.

• Does not reflect what it includes nor fit with Imperial terminology• The “Estates” rate includes:

– Rents, rates, repairs, refurbishments, insurance– Infrastructure adjustment– Depreciation of our estate– Pooled technicians (until 2007) and equipment

• At Imperial, these costs borne by:– Departments– Faculties– College centre (Finance department)– Imperial’s Estates department

How is FEC calculated? (FEC methodology)

• The way overheads are recovered has changed: now based on FTEs x a rate per FTE for “estates” and “indirect” costs

• Our rates (“estates”, indirect, charge out) are derived from TRAC figures which we are obliged to adopt and are audited by HEFCE’s auditors

• Annually updated – so if can reduce our costs then can reduce our rates

FEC rates per FTE

• May not be comparing like for like (e.g. what equipment is in the Estates Rate?)

• Rates will change 2005/06 – Imperial taken out 10 pieces of equipment

2004/2005 (using 2003/2004 data)  Oxford Cambridge UCL Imperial

HEFCE(Upper

Quartile)

High Cost Lab and Lab 12,223 9,300 9,200 10,079 10,000

Non Lab 5,549 3,400 2,300 2,597 6,000

INDIRECT RATE 41,515 37,100 38,300 42,208 37,000

TOTAL 59,287 48,600 49,800 54,884 53,000

Impact of FEC on Peer Review according to RCUK

• Peer Reviewers are asked to assess only the justification for requested resources (staff, equipment, travel, etc.), and “should not question estates and indirect costs”

• However, “the total cost of the grant should be taken into account when assessing the overall value for money of the proposal”

• This seems contradictory: the estates and indirect costs constitute an important part of the overall costs

• Panels not taking a consistent approach – value for money predominates

“Estates” Rate as bargaining tool – price

• A more commercial mindset is needed – negotiating tools should be used to price research competitively

– e.g. If replacement of an item of equipment has already been funded, then depreciation and replacement costs will still need to be included when calculating the FEC, but can be cut from the price presented to potential funders

• Very large and potentially inter-faculty contracts may warrant allocating different “Estates” rates to specific activities in the contract

How much new money do we get under FEC?

• £8M from Research Councils in 2006-07• RC will increase year on year until steady state in ~ 3 years

(providing research volume from RCs maintained)

TRAC methodology predicts the following allocation of additional RC income (steady state of ~ £24M p.a.) :

• £16M will go to faculties and £8M to FEC Investment Fund (FIF)

1/3 of new money goes to FIF and 2/3 goes to Faculties

• The College must build FIF to meet the post SRIF, long-term FEC requirement of sustainability

How does this guide how we price to industry?

To recover on base of

£69M

Price must

be X% FEC

Year on year % increase required on

price

Discount on FEC in InfoEd

(currently 47%)

Year 1 £69.33M 54% 54/53 = 1% 46%

Year 2 £71.67M 57% 57/54 = 5% 43%

Year 3 £74.00M 60% 60/57 = 5% 40%

Industry portfolio is £69M. To become sustainable in 10 years, need to recover £0.33M, £2.67M, £5.00M year on year (rest from RC, OGD and charity income).

Structure of Research OfficeJohn Green

Lynne Cox

Director, Research Contracts

David Langley

Director of Research Services

Karen Sergiou

Head of Research Operations

Cindy Lai

Head of Research Support

Research Services Managers

Deslyn Brown

Tania Palalic

Mike Robinson

Julie Williams

Tushar Devani

Shaun Power

Brooke Alasya

Faculty RS teams

Research Office responsibilities

• Guidance to faculties• Communication improvements• External relations (lobbying)• Governance• Strategy• College consistency• IP management and policy• Professional policy• Training and development• PI support (strategic and complex bids)• Management information

Research Office

Research Office

College Guardian of research management

Develop external relations and lobbying

Improvements of standards, service & professionalisation

of RS across College

Support to Faculties and their RS teams

Hub of expertise in research management

Internal dipstick to departments

Faculty responsibilities

• Faculties (FOOs)– RS teams (below RSM) are part of Faculty operational

responsibility for RS teams and outputs, e.g. WIP, overheads, FEC

– Quality of service to departments and PIs

• Role of departments/DAs– Support PIs in pre-contractual application process– Management of research accounts etc– Research account management

Function of Research Service teams in faculties

Pre-award• Assist with project proposals• Advise cost • Negotiate contracts and sub-contracts• Arrange indemnity; sponsorship; NHS R&D; Ethics Office

(Clinical Work); CRO• Co-ordinate large bids• Liaise with IC Innovations over lP, licensing and patent issues• Liaise with ICON over consultancy issues • Negotiate and accept terms and conditions of awards

Function of Research Service teams in faculties

Post award• Arrange credit checks on sponsors• Set up research accounts on Oracle Grants and update InfoEd• Cost and authorise staff appointments• Claims and reconciliations• Ensure compliance with contractual obligations• Prepare and submit cost statements and invoices • Submission of final cost statements and account closure• Identify and resolve queries from Depts, PIs and funders• Advise Credit Control and assist with resolution of payment

queries• Manage overhead recovery to divisions from research accounts• Provision of measures on research activity

Key points

• All Faculties will receive additional benefit from FEC• The College will be building up a reserve via the

investment charge gradually• Need 1%, 5% increase on industry price• Departments and Divisions need to work with Faculties to

establish an equitable distribution of the additional resource

• Additional money can be raised either by increasing price to other non-RC funders or from other sources (e.g. IP revenues)

Challenges ahead

• FEC must not drive changes in our funding portfolio• We will engage with RC panellists to get feedback on

RC behaviour and we will educate our peer reviewers to understand component parts of “estates” and indirect rates

• Partnership with industry and OGDs is critical in going forward

Challenges ahead

• Delay in delivery of InfoEd functionality for JeS means costing data cannot be checked for validity against business rules before uploading to JeS

• Imperial intended to have direct submission from InfoEd to Wellcome e-grants, but… new Wellcome e-Grants in 2007, whilst e-Grants mandatory by October 2006; thus Imperial has to register for e-Grants, use old system, and users need to register a ‘Personal Homepage’

Further questions

This presentation and FAQs on:

www.imperial.ac.uk/rs/changes

Email questions to:

fec@imperial.ac.uk

Discussion?