Transparent approach to costing (TRAC)

The Government’s 1998 Spending Review granted additional funds for higher education, but required transparent costing at institutional level in order to improve public accountability. The Joint Costing and Pricing Steering Group (JCPSG) was given the task of introducing satisfactory costing methods.

Compliance is mandatory and individual universities are required to allocate their expenditure between Teaching, Research and Other activities for each academic year to be reported in the following January. Teaching and Research are further analysed between Publicly and Non Publicly funded Activity.

The Government has become increasingly anxious to ensure that all activities in higher education institutes (HEIs) are sustainable in the long term. Transparency returns clearly demonstrate that research and other related activities would not be sustainable because their cost substantially exceeded the income that could be attributed to them.

In return for greater support, the Government now expects universities to manage their budget in a way which allows them to invest properly in infrastructure renewal and ensures that research and other income generating activities is put on a sustainable footing.

As a result TRAC is now being consolidated and extended to cover the full economic cost (fEC) at project level. This has significant implications for the future costing/pricing and monitoring of projects.

The purpose of project level costing and reporting is to ensure that, taking one year with another, HEIs recover the fEC of projects they undertake and therefore, that their project programmes are sustainable.