Full Cost Recovery Pilot
Worcestershire County Council/Age Concern H&W
Full cost recovery (FCR) is a model for a service provider to recover the full cost of delivering a service, which has recently been adopted by the government for use in its funding arrangements with the VCS, through the national Compact Funding Code.
FCR means that the direct costs of a project and the share of overheads that the service consumes (the indirect costs) should be calculated and included in any bid. What FCR does is clearly demonstrate to the funder and the service provider exactly how much the indirect costs are for each service. This is much fairer for the funder, and accurate for the service provider in apportioning costs. Not only are the costs of delivering the service definitely covered, but there is transparency in how funds are used, for example overheads are not over-paid for.
For the past few months, as part of our commitment to the Worcestershire Compact, colleagues from the County Council, Age Concern H&W and Community First have been working together to examine the effect of full cost recovery on contracts. The focus of these meetings has been on the likely financial impact on the Council as funder, and on the service provider (in this case, Age Concern H&W).