UNDERSTANDING AND PLANNING FOR EXTERNAL RESEARCH AND CONSULTANCY FUNDING: GUIDANCE Our primary aim in the School of Education and Social Work (ESW) is to support and promote high quality research, as well as to encourage colleagues to make research/consultancy bids to the best, most appropriate and most cost‐effective opportunities available, in line with the School Research Strategy. Decisions about which funders and which funding opportunities to go for involve diverse criteria. The overall benefits – for example of prestige, enhancing research profile and impact – of attaining some grants may sometimes outweigh certain budgetary disadvantages. At other times they might not. It is always important for the researcher and the School to make balanced decisions about funding opportunities on a case by case basis, through careful appraisal of their benefits and costs, in the light of individual and School research strategies and the School’s financial circumstances. Ultimately, the School, the Finance Office and Research and Enterprise Services on behalf of the University will need to approve your bid ‐ including the budget ‐ before it may be submitted. So when considering external research or consultancy funding bids, or responding to tender invitations, it is important to understand how this funding works to make your bid attractive, viable, and one that the School can support. Different funders use different funding models to determine what they will support. This may affect your choice of funder. It may certainly affect the design and scale of your research project, and the time and resource you can commit to it. The Research Development Officer will be able to advise you about the terms set by specific funders, their implications, and to alert you and the School to any risks. S/he will be able to advise you throughout the bid development and submission process, including the budget and the income and pricing statement. Please contact the Research Development Officer to begin this process as early as possible in advance of the intended submission date; it is essential that s/he is able to work with you in a timely way. This document  Explains some Key Terms;  Answers some Frequently Asked Questions;  Identifies Key Risks to Watch Out For. 1 KEY TERMS: 1. Directly Allocated (DA) costs ‐ These are the costs for resources which already exist at the University. For example, faculty time allocated to the project, typically as Principal Investigator (PI) or Co‐Investigator (Co‐I) is a directly allocated cost, whereas the cost of contract researchers employed specifically to work on the research project is a directly incurred cost (see below). DA costs also include the Estates overhead which is a set amount per staff time on a project and covers items such as building and premises services. 2. Direct project costs (also known as Directly Incurred (DI) costs) – These are the costs to purchase the resources needed to deliver the project that do not already exist at the University. For example, salary + NI + superannuation for contract researchers employed to work directly on the project, as well as consumables, travel. 3. Indirect costs – These are costs, charged by the School/University to cover the additional costs of hosting the project not covered by Estates (e.g. Library services and learning resources, general office consumables, professional services such as Insurance, Finance and HR). Together Indirects and Estates comprise the overheads on a project. Like Estates, Indirects costs are driven by the Faculty and Research staff time on a project. 4. Full economic cost (FEC) ‐ The FEC is calculated for all research/consultancy budgets and appears on the ‘income and pricing statement’ produced by the Research Development Officer for each bid. The FEC of a project includes all costs associated with undertaking the project and is the total sum of directly allocated, directly incurred, and indirect costs. For purposes of calculating FEC, the University uses a standard formula, regardless of the amount that any particular funder will actually pay. 5. Research contribution income ‐ This is the income to the School from external research funding that pays for the directly allocated faculty time spent on the project (also known as staff recharge) and associated overheads (Indirect and Estates costs). FREQUENTLY ASKED QUESTIONS: 1. Why does Contribution Income matter? The School‘s economy relies on generating research contribution income to support the running costs of the School and for strategic investments such as new posts and studentships. So it is important to maximise as far as possible the contribution income that our external research brings to the School. Please note: As a guideline norm, the ESW expectation is that faculty bring in an average of £10,000 research contribution income per annum research contribution; this is flexible according to individual circumstances. 2 2. To FEC or not to FEC? For research awards: Government funders in the main do pay FEC; Research Councils usually pay 80% FEC. Other funders (e.g. EU) pay a proportion of project costs (directly incurred and directly allocated), and some others, mainly charities (see below) pay no overheads or faculty costs and varying levels of directly incurred project costs. Ideally, faculty are encouraged to seek research funding from sources paying FEC, or as close as possible to FEC. Other options must be carefully considered, in discussion with the Research Development Officer and usually with the Director of Research and Knowledge Exchange. For consultancy: Please note, consultancy should always be priced at a minimum of 100% FEC. 3. Should I go for Charity Funding? Typically charities pay no directly allocated staff costs and no overheads at all. However, these costs are partly recouped via the Government Quality Research (QR) contribution to charity funded research; this is around 22% of the direct project costs and is refunded one year in arrears. This means that we need to think carefully about applying for charity funding, including whether there are opportunity costs that might be missed if we go for charity rather than other funding opportunities. However, charities can provide an important, and sometimes prestigious income source in particular for small projects, and we are keen to continue to include them within a mixed funding portfolio. If you are planning a bid to a charity, it will be best to discuss this with the Research Development Officer who may then draw up a preliminary budget, for early discussion with the Director of Research and Knowledge Exchange. 4. What about Matched Funding? Several funders (including some Research Council schemes) now commonly require, or favour, bids that include ‘matched funding’ from the University. This may be in the form of staff time sponsored by the HEI, or other resources, equipment etc. The School’s capacity to provide such matched funding depends entirely on its financial circumstances at the time. 5. What Staffing Model should I choose? Ideally, the School would wish for a mixed portfolio of faculty members and contract researchers to be working on externally funded research projects. For capacity building purposes it is advantageous both to deploy and develop our existing staff resource (for example early career researchers working first as Co‐Is alongside a Sussex PI, and then PI in their own right) and to contract new or known research staff to work on specific projects or programmes. However, there are complexities to consider on a case by case basis. For School budgetary purposes, it is important to maximise research contribution income. This is achieved by maximising the use of faculty and/or minimising the under‐recovery of direct project costs. In particular, it is important to minimise the under‐recovery of 3 contract research staff costs as these drive overheads and therefore present a real cost to the School. Nonetheless, in some circumstances it makes best sense to include contract researchers into research bids. In addition to growing capacity and critical mass, this can free up faculty time, and bring in expertise that we do not have available in‐
house. Where funders pay full direct and indirect costs of ‘incurred’ staff, this option is cost‐neutral to the School. Using Associate Researchers (approved members of the ESW Associate Researcher pool) on a casual basis, or using other external consultants can also be a sensible option, for similar reasons, in some circumstances. 6. What about Partnership Bids? Increasingly, we are encouraged to make large, often interdisciplinary, research bids (for example to the EU and Research Councils), in partnership with other Sussex Schools, or with other HEIs or stakeholders. Where projects are split between Schools or institutions, so too is income. Different funder and partnership models may involve, for example, multiple institutional work streams, each with its own lead Investigator under the overall leadership of a Principal Investigator, or one lead institution and budget holder subcontracting others. In the main, it’s more likely than not to be in our interests to be the lead partner and budget holder, but this too will vary depending on the funder terms. KEY ‘RISKS’ TO WATCH OUT FOR: In financial terms, research funded at FEC or close to FEC is preferable. Consultancy bids should always be funded at a minimum of 100% FEC. Beyond this, it is not possible to provide a universal rule, since other (including non‐
budgetary) criteria, come into play. Much depends on the specific funder rules and the nature, size and scope of the bid. However, as a rule of thumb, the ‘risks’ to watch out for are where:  the funder does not cover overheads and/or does not come close to covering direct costs or  the funder requires matched funding from Sussex. If either of these risks apply, please alert the Research Development Officer and the Director of Research and Knowledge Exchange as early as possible. The Research Development Officer will be able to draw up a provisional budget so we can consider the implications. We will discuss and consider each case on its individual merits to try to achieve the best resolution within the resources the School can offer. Elaine Sharland, Director of Research and Knowledge Exchange July 2015 4