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Your article "FP7 largesse may bring a nasty surprise" (5 June) provided a partial and misleading picture.

In Framework Programme 7, all costs will be reimbursed at a percentage of eligible costs incurred. Those unable to identify indirect costs as per the European Commission's requirements will be eligible for a flat-rate overhead.

UK Trac (Transparent Approach to Costing) does not meet all the European Union's requirements. So Universities UK and JM Consulting, working with the sector and in close co-operation with the European Commission, are developing a version of Trac for use in FP7.

Once guidance has been agreed with the Commission, UK institutions will be able to adapt their systems and take advantage of "full-cost" reimbursement. The guidance should be ready long before 2009. Until institutions have fully implemented the requirements in the guidance and confirmed this with the Commission, they will be eligible - and indeed required - to use the flat rate. So I question whether the issues your article raises will ever occur.

Diana Warwick, Chief executive, Universities UK.