The JCPSG produced a 
timetable
for implementing the approach to pricing, particularly for contract with
publicly funded bodies.
The government set out its policy on the costing and pricing of publicly
funded research in the Cross
Cutting Review of Science and Research (March 2002) and reaffirmed this
in the government's Science Strategy 
Investing
in Innovation (July 2002) and HM
Treasury's letter to Dr Chris Henshall (13 February 2004) . It has been
further reinforced through the Government's 10
year Science and Innovation Investment Framework 2004-14 , published in
July 2004. The Scottish Executive has confirmed that, along with its agencies
and non-departmental public bodies, it now expects to pay for the full economic
costs of research bought from UK universities to improve evidence-based policy
making. The Higher Education Funding Council for Wales has confirmed that
the Welsh Assembly Government has implemented the Treasury's policy of funding
100 per cent of the fEC of work commissioned from HEIs, as set out by the
Treasury in February 2004.
HEFCE has recently published on its web-site how it takes account of full
economic costs in the funding it distributes for higher education. Click
here for this information.
Some institutions are already recovering full economic costs on research
commissioned by government departments. Others are urged to refer to the Treasury
letter (February 2004) in their negotiations - see link above. Occasionally
the HEI may conclude that it wishes to price a particular
government department research project at less than 100 per cent of fEC; this
should only be done as a conscious decision, within the context of strategic
objectives and having regard to the requirement, taking one year within another,
to recover in aggregate the full economic costs of their activities across
the full range. (Refer to Financial Memorandum between funding councils and
HEIs, and the government's
suggested guidelines for HEIs to use when considering whether or not
to subsidise projects from those public funds which have specifically been
allocated for 'public scientific good' research). However, the simple fact
that the research supports evidence-based policy-making by Government is not
sufficient to satisfy the principles. Government departments would potentially
pay more than 100 per cent of fEC if the work were competitive or other market
conditions applied.
The DTI has announced that Knowledge Transfer Partnership (KTP) projects should be funded at 100 per cent of fEC from September 2005, being the start of new programmes. The HEI element of Knowledge Transfer Network (KTN), LINK and other DTI Technology Programme projects, often being associated with Research Councils, will be funded at the same percentage as the Research Councils, currently 100 per cent of fEC.
All government departments are to pay 100 per cent of fEC unless the Government has determined a different policy for a particular department to allow it to pay at the same rates as the Research Councils (currently 80 per cent of fEC). At present this only applies to the NHS (not the Department of Health) where an NHS trust is contributing to the project by making clinical facilities available and the trust is not recharging for the use of these facilities.
NHS bodies have now made explicit statements on web-sites that they expect
to meet 80 per cent of fEC from April 2006. Refer to the NHS
Health Technology Assessment Programme; and the NHS
Service Delivery Organisation Research and Development Programme . HEIs
will need to negotiate research contracts with local NHS trusts but it is
anticipated that the same principles will apply.Ó
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