Part V - TRAC fEC

Section C: Estimating researcher costs

Chapter C.3 Salary costs

1. A salary cost should be applied to the time estimated against any one academic’s name, which reflects the salary costs of that academic to the institution. This can be based on appropriate pay bandings (individual salaries need not be disclosed on costing schedules to maintain confidentiality). Pay bandings can be used for all academic staff, or only some grades (e.g. professors) where confidentiality may be more of an issue. However, variation in honorariums and on-costs may mean that pay bandings are useful for all staff.
2. The annual salary cost applied to a project for any one academic should be that which relates to the actual or likely salary or pay banding of that individual, whether they are in post or yet to be employed.
3. The pay bandings should be set by each institution in a way that ensures that their application is fair and reasonable.
4. The salary or pay bandings applied:

   should include:

   • on-costs;
   • allowances;
   • all honorariums (e.g. associated with the responsibilities of a dean or head of department);
   • fees or other similar payments made in lieu of salary (e.g. for visiting lecturers/professors, whose salary or pay banding may only consist of this cost element);

   should not include:

   • payments that purely relate to clinical work (often paid on an agency basis) e.g. NHS merit awards/clinical excellence awards, intensity payments, or Additional Doctors Hours (ADHs);
   • academic overtime. This generally should not be included as a direct cost on a project either by including it in the salary costs (in the £/FTE calculation) or by including it as a directly incurred cost.

     However, some sponsors may exceptionally agree to pay this as a specific part of their price. A sponsor may agree to pay a premium for a report to be produced quickly, which might require it to be done outside normal working hours (possibly leading to an overtime payment by the institution to the academic). This is not part of the salary cost (nor the pay banding) used in the fEC; it should not be included as a directly incurred cost. It is part of the price.

   • fees paid by a university to a UK academic who may be carrying out research work during their time spent on ‘private consultancy’. This is unlikely to be acceptable practice in most institutions. However, if it does occur, their time should be costed at the appropriate rate for that grade of staff, and any additional fees paid should not be included in any part of the fEC of a research project.
5. Pay bandings should be based on an average of actual salaries (and all related costs, above) that are paid to the investigators within each band in a year, expressed in prices that will apply to year one of the project. This should be recalculated at least once every three years, with indexing applied in other years.
6. Institutions can use actual salaries for some grades of staff and pay bandings for other staff (e.g. professors). However, where both methods are being used they should be applied consistently, i.e. if a pay band is being used for professorial staff, the average pay for that band should be applied to all professors’ time that is charged to projects.
7. A daily or hourly salary cost should be calculated for each salary or pay banding by dividing the average salary for that band by the hours or days in a standard working year.
8. A salary cost should then be applied to each academic’s time:
   • where academic staff are partly or wholly paid through the university then a salary cost should be applied;
   • a salary cost should be applied against the time of clinical academics whether or not their salaries are wholly or partly reimbursed (the reimbursement is part of the knock-for-knock arrangements. This means that Trusts receive clinical services (O(CS)) for reimbursed salary funding and this is deemed to balance at an institutional level. It does not affect time spent by any one clinical academic on a research grant.);
   • similarly, with Oxbridge academics where some or all of the salary might be paid by a college;
   • where staff costs are paid neither by the HEI nor by their collaborating partner (e.g. some visiting fellows, visiting professors from industry, or retired academics) then costs should not be applied to their time as there are no costs in the HEI’s accounting records;
   • the time of NHS researchers who work on a HEI research project, should be estimated and included. However, if their salary is not paid through the HEI, then a salary cost should only be attached to this time:
     • if it is deemed by the HEI to be part of the knock-for-knock arrangements (the HEI is incurring other costs in lieu, e.g. Other (Clinical Services) O(CS)); or
     • if the Trust specifically recharges an appropriate part of the salary costs;
   • where the project work (or fellowship) is specifically deemed to cover 100% of the time of a particular researcher – e.g. RA, or Fellow – then 100% of their salary cost should be included in the fEC. (In these cases the individual’s time cannot be included on another fellowship or research project. This would also mean that their time should be allocated 100% to Research, in the annual TRAC time allocation exercise, with no allocation to Teaching or Support.)
9. Where an academic is to be involved in the project, but no time can be recorded, then a cost should not be included. An example of this is a Research Fellow all of whose time (100%) has been included on a single fellowship grant from a Research Council, OGD or charity.
10. Where researchers from collaborating HEIs are to be included in the lead institution’s project costing then the time and relevant staff cost of all staff should be shown separately under the academic staff categories.
11. Staff costs should be indexed (this is covered under indexing for future years).
12. Care should be taken to quote year one prices at the price levels likely to be prevailing in year one. Some sponsors, e.g. the Research Councils, will index the prices themselves in future years (years two and three of a three-year project). When they do so, they will generally take into account pay increments and promotions on research staff, but not on academic staff (they are not told the grade and bands by applicants). Therefore, the year one salary costs for academic staff should include an element of average likely future years’ pay increments and promotions, unless the staff are already at top of scale.The year one salary costs should also include an uplift, as appropriate, to reflect an appropriate proportion of additional payments likely to be incurred from contribution-related pay (e.g. bonuses or increments when at top of scale), or from a change in the pay structure (e.g. the introduction of a single pay spine or other salary costs arising from the implementation of local pay arrangements).
13. The impact on a single individual (or a particular pay banding) will not generally be known, so the uplift should be based on the estimated average uplift in academics' salaries across the institution. Uplifts in salaries across all years of the project should be considered and built into year one. To do this, the salary at the midpoint of the project life, assuming an annual pay increment and an average uplift in academics' salaries for contribution-related pay etc., expressed in year one prices, could be used as the year one salary.