RSD practice on setting up EC FP6 Budgets
20 July 2006, posted by Claire Capperauld
Research Services Division (RSD) has reviewed its practices on underwriting EC FP6 budgets.
Initially RSD adopted a cautious approach and set up EC budgets to cover the amount for which the EC wished to commit, namely the initial 18 months of a project, despite the fact that if successful the project would continue for much longer. This has meant that following a successful initial period there would be a separate exercise to establish the budget for the rest of the project. Having reviewed the situation internally, consulted with a number of Departments and with the support of the UK Research Office (UKRO), we feel it is more sensible to establish the budget in full for the whole project from the outset, as this enables continuity and stability for projects (the vast majority) that successfully complete the initial 18 month period. For those that do not successfully complete the initial period they are in no worse a situation than any other type of funding where, technically, termination is always a possibility. Therefore, this change will effectively bring EC FP6 projects into line with the majority of other grants.
This change in our default position should make the administration of EC grants smoother with no additional risk. It means that Departments will no longer have to underwrite EC projects to cover the whole period when we are setting up new budgets.
Existing projects will automatically have their budgets and dates adjusted to fall in line with the new practice. However, if you do not want to change the practice in relation to your Department or a particular project please contact your Awards Administrator in RSD by Friday 28 July 2006. The updated information should be available to all by 31 August 2006, although we will make the projects reaching their 18 month deadline a priority.
If you have any questions relating to the above, please contact:
Monique Carew (Tel. 766362) or
Lauren Ryan (Tel. 766730), RSD.
Following below, is a summary of the current policy with its shortcomings, along with the new policy which will take effect immediately. We also outline an action plan to follow on existing projects.
The introduction of FP6 saw several changes to the financial management of projects and imposed a significant increase in responsibility to its participants. One aspect of this change was that the EC only guaranteed funding the projects for a period of one year (in most cases), with further funding being dependant on satisfactory performance in the preceding reporting period. To this effect, the EC awarded an initial 18 month budget along with providing the total budget for the project, were it to pass all of its reporting requirements.
RSD decided it prudent to adopt a policy of only setting up the budgets on these projects for the initial period of 18 months, unless a department agreed to sign a letter agreeing to underwrite the project for the full duration. In this way, if the project were to terminate prior to the original end date, then any spending incurred over and above funding received from the EC would need to be met by the department.
Setting up budgets for an initial period of 18 months has caused departments and RSD significant difficulty in the following areas:
Inability to appoint staff for the full duration of a project
Inability to attract the highest calibre staff due to only being able to offer short contracts
Inability for departments to continue spending on the project due to a delay in the EC agreeing the prior periods reports
Difficulty in deciding how much the next periods budget should be due to the complex arrangements in place at the EC with subsequent payments
UKRO conducted a survey on 15 institutions and concluded that 67% of them adopt the practice of setting up budgets for the entire period as a result of the problems outlined above.
UKRO have also confirmed that it is ?highly unlikely? for any project to be terminated by the EC.
Cambridge currently hold 222 EC FP6 grants. Of these, 110 have been through their first reporting period and all of them have passed.
After reviewing this, we at RSD, believe that there is very little risk in the early termination of EC grants, and therefore agree that we should change our policy on the setting up of its budgets.
UKRO have however advised that, as with all research projects, we proceed cautiously if we decide to amend our policy to set up the budgets for the full duration of the project. The EC do reserve the right to terminate projects should they not perform satisfactorily. However, we see this as being no different to the relationship we have with any other sponsor of research projects. It is inherently accepted that all research carries a risk (however minimal) and that should any be terminated, then the departments concerned would need to make good any differences between expenditure and income.
Therefore, with immediate effect, RSD will no longer be asking departments to sign a letter agreeing to underwrite EC projects. The full budget awarded will be setup at activation stage for the full duration as agreed in the EC contract.