069/21 Revision to Simplified Cost Options (SCO) Guidance on Annual Gross Employment Costs and how they are calculated
Updated 29 February 2024
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This publication is available at https://www.gov.uk/government/publications/esf-action-notes-2014-to-2020-programme/06921-revision-to-simplified-cost-options-sco-guidance-on-annual-gross-employment-costs-and-how-they-are-calculated
| Date Issued | 03 August 2021 |
| Review Date | 31 August 2022 |
1. Who should read
Managing Authority, CFOs, Direct Bid projects, IBs
2. Purpose
This Action Note explains how Annual Gross Employment Costs should be identified and when they can be calculated. This Action Note reflects changes that the European Commission (EC) have recently made to the Simplified Cost Regulations Article 68a (2)-(4) of Common Provision Regulation (CPR).
3. Background
This Action Note explains that calculated Annual Gross Employment costs for a 12 month period can only be used in instances where 12 months of employment costs data is not already available.
4. Action
With effect from Quarter 4 2021 claim period, projects must adhere to the latest revised SCO guidance when identifying (and where necessary, calculating) Annual Gross Employment Costs. The revised guidance explains that:
The Annual Gross Employment Cost calculation does not have to relate to a calendar or financial year (for example, it could be data relating to the period August 2020 to July 2021). What is important is that the gross employment cost covers a full 12-month period. It can be the 12-month period preceding the end of a reporting period (of the operation or the programme), 12 months before the grant agreement or 12 months of the previous calendar year.
In accordance with Article 68a (2)-(4) CPR where data for a full 12-month period is not available, they may be derived from the available documented gross employment costs (for example, take the data relating to an employee for whom 4 months of data exists, and extrapolate this to an annual gross employment cost, taking account, where relevant, of issues such as statutory holiday payments).
In addition to the ESF MA has also added clarification to bullet point 4 of the section that sets out what gross employment costs can include and additional clarification to the sections relating to annual reviews of the 1720 hourly rate costs.
The updated Simplified Cost Option Guidance has been published on GOV.UK
5. Contact
If you have any questions about this Action Note please contact esf.2014-2020@dwp.gov.uk