Full Economic Costing
TRAC (Transparent Approach to Costing) is now the standard method used for costing in higher education in the UK. The application of full economic costing, as the basis for cost-based funding, is seen as central to securing the long-term financial sustainability of higher education and its ability to deliver high quality learning and teaching and research.
With effect from 1 August 2006, the Funding Councils have agreed that JISC should adhere to their principles regarding full economic costs (fEC) for all new or renewed grants to institutions. fEC will not be applied retrospectively to projects with a start date prior to 1 August 2006.
JISC does not offer a standard funding rate. When bidding in response to a JISC Circular which is only open to the education sector, UK HE institutions should use TRAC to determine the full economic cost of the project. Potential bidders should then indicate the contribution of fEC they are seeking from JISC and the contribution they intend to give towards the activity, taking into account the benefits to the host instituitons and any partners. So, a proposal to JISC requires you to identify the amount you are asking JISC to contribute, and the amount your institution will contribute towards the fEC of the project. A proposal to JISC also requires you to include inflationary increases across years.
When bidding as part of an open invitation to tender, competing with organisations from other sectors and countries with different costing and pricing policies, UK HE institutions should also use TRAC to determine the fEC of the activity to ensure they are aware of the real costs of the work but then make a decision on how to PRICE the bid given the competitive situation.
JISC has been in discussion with JISC-funded services regarding fEC and is currently considering, with HEFCE, how the TRAC methodology should be applied. Any queries from JISC-funded services should be directed to the relevant committee secretary.