History of TRAC

History of TRAC

The Transparent Approach to Costing (TRAC) methodology was developed with the higher education sector to help them cost their activities.

Since its introduction it has developed to encompass costing for both direct and indirect costs or ‘full economic costing’ (TRAC fEC), TRAC for Teaching (TRAC(T)) and the TRAC based Certificate of Methodology for EC Framework 7 (TRAC EC-FP7).

The data that TRAC has developed now provides institutions with key information that can help managers understand and manage sustainability issues.

Joint Costing and Pricing Steering Group (1997-2005)

The Joint Costing and Pricing Steering Group (JCPSG) was established by the three funding councils and sector representative bodies to help universities and colleges improve their strategic and operational decision-making by developing and implementing good practice in costing and pricing activities.

The JCPSG developed and helped institutions to implement the Transparent Approach to Costing (TRAC).

Independent reviews of the effectiveness of the JCPSG were commissioned by the group’s sponsors.

For more information about the early development of TRAC and the JCPSG visit the archived JCPSG website.

Full economic costing

In February 2004 an approach to costing research projects on a full cost basis was introduced. This approach extended TRAC to provide a small number of cost rates to be used for recovering overhead costs on research activity.

In September 2005 the UK Research Councils changed their basis of funding research projects to adopt this ‘full economic costing’ (fEC) approach. The Research Councils agreed to pay 80 per cent of the fEC, which although not 100 per cent, represented a substantial increase in the funding received by the sector for its research activity.

Other government departments also committed to move to funding projects on the new fEC basis.

The following statement from the Higher Education Funding Council for England (HEFCE) explained how it would take account of full economic costs in the funding it distributed for higher education.

Statement by HEFCE on full economic costs (July 2005)

Development of TRAC for teaching

In October 2005, HEFCE published a consultation on the review of its method for funding teaching. The proposals included the development of a national costing framework for teaching based on TRAC principles. The outcomes and next steps were published in March 2006.