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Lord Sainsbury also announced that research councils would pay 100% of the costs of any equipment over 50,000 per grant (with higher education institutions contributing 20% of the costs of the first 50,000). An extra 120 million per year, to support the move towards FEC, will be distributed to the research councils from July 2005, rising to 200 million per year from 2007-08. Lord Sainsbury said: "The government is committed to improving and maintaining research excellence in UK universities. "The move towards research councils paying the full economic costs of projects is a huge step forward in the drive towards proper and sustained funding of the UK research base, and comes coupled with an increase in the block grant from Funding Councils. This represents a major boost for university research." Kim Howells said: "This increase in the level of contribution from the research councils is another major step to ensure that our universities have a secure base from which to plan and develop high quality research in a sustainable way. We remain fully committed to the Dual Support system. The movement towards research councils paying Full Economic Costs is an integral element of this, which will allow institutions greater flexibility in the use of their Quality Related funding to address the needs of their research strategies properly." The government recently set out its policy on science and innovation in the Science & innovation investment framework 2004-20141. The Framework recognizes that the financial foundations of the research base have suffered long-term neglect which will only be addressed through long-term commitments to funding and action by Higher Education and other institutions themselves to ensure that funding is properly applied. These actions are vital to sustaining and improving the excellence of the UK research base. The government is trying to get sustainability in three ways: 1) By ensuring that HEIs have the tools they need to understand the real costs of the research they are pursuing. To this end, institutions are expected to introduce the extended "Transparent Approach to Costing" (TRAC) methodology to calculate the real costs of research by January/February 2005. 2) Taking one year with another, across the range of activities, HEIs will be expected to recover their full economic costs, taking into account capital funding streams. 3) The government is providing funds to allow the research councils to increase the percentage that they contribute to the full economic costs of the projects and programmes they fund. The ?120 million per annum extra from 2005- 06, rising to 200 million from 2007-08, will enable research councils to pay 80% of the full economic costs of research grants applied for after September 2005 (compared with around 55% on average at present). This percentage is intended to rise towards close to 100% by the beginning of the next decade, taking account of capital funding streams. The government is also increasing the Funding Council block grants (QR) for Higher Education (6% real a year for England). Together with the increased contribution that research councils will make to project costs, this will allow QR to have a greater focus on blue-skies research, and enable HEIs to reach FEC from charities, the European Union and business (where there is an expectation of public good that justifies the use of public funds). The government also announced in the Framework the creation of a charities partnership fund of up to 90 million per year (in England) as an additional contribution to the costs of charity-funded research in HEIs. HEFCE will announce details in due course.