fEC

1. fEC Full Economic Costing of Research (and Teaching and Administrative) Facilities

2. Why calculate, account for, and charge the fEC of space/facilities? • To eliminate cross-subsidisation • If premises-related costs are calculated as UCL premises-related expenditure (£) = £/m² Total floor area (m²) and • less than this is charged to/recovered from research sponsors = cross subsidy from another area of UCL’s business. • research sponsors are charged for facilities at a flat rate, i.e. some space is over charged (e.g. storage, offices, etc.) and some is undercharged (e.g. laboratories) this results in the charge for lower cost facilities cross-subsidising higher cost facilities

3. Why calculate, account for, and charge the fEC of space/facilities? • Toachieve sustainability • In the current (2004-2005) financial year the premises budget is £5.5 million less than what was estimated to be necessary for the proper upkeep of the estate (not including what is needed to address the accumulated backlog of maintenance). • The Estates and Facilities budget does not include a provision for such items of capital expenditure as the replacement of furniture and fittings (e.g. laboratory benching, etc.) or the cost of meeting evolving and increasing legislative requirements, or to meet the cost of updating facilities. The objective is ultimately to ensure that what is spent and financially provided for is what is needed adequately to run and maintain the facilities.

4. Why calculate, account for, and charge the fEC of space/facilities? • The fEC calculation must therefore include: • The amount actually spent on premises plus • an addition (a so-called “infrastructure adjustment”) to make good the difference between what is spent and what ought to be spent and provided for. • A banded costing mechanism which reflects the fact that there are significant differences in the cost of servicing and maintaining different types of space

5. 4. The cost differentials