Ordnance Survey: Public Service Information Inquiry


Memorandum by Ordnance Survey, 5th October 2007


Supplementary Evidence


Ordnance Survey has considered the Uncorrected Evidence submitted in response to the Committee. Since the Uncorrected Evidence was submitted:


The Government Response to the Office of Fair Trading (OFT) Study on the Commercial Use of Public Information (CUPI Study) has been published (in June 2007);


Ordnance Survey and the OFT have continued constructive engagement in respect of the CUPI Study findings as they affect Ordnance Survey. Although all outstanding issues are not yet completely resolved, significant progress has been made and Ordnance Survey is eager for final resolution on outstanding issues;


The definition of Ordnance Survey's Public Task referred to in paragraph 1a.3 of its Memorandum of 1 June 2007, has now been finalised by Shareholder Executive and approved by Ministers of Communities and Local Government. A copy of this document is attached at Annexe 1.


Ordnance Survey comments below on a number of issues raised in the Uncorrected Evidence. However, it has not sought to comment on individual points that were raised by different parties as it assumes that the Committee's intention is to review the overall position rather than to arbitrate specific disputes. However, if the Committee considers that any specific points have not been adequately dealt with by Ordnance Survey in its memoranda, Ordnance Survey would welcome the opportunity to provide further written evidence to the Committee on such points.


Q1 Ordnance Survey's public service and national interest work



Many Government respondents to the Committee underlined the importance to them of Ordnance Survey data maintained to the currency, reliability, consistency and completeness they require[1]. These needs are reflected in the new Public Task document which now has been agreed with Ministers in order to provide additional clarity as to the boundaries of Ordnance Survey's "public service and national interest work".


These issues are, in our view, largely distinct from the recommendation of the OFT, following its CUPI study, that Ordnance Survey's "monopoly activities" (unrefined information) should be separated from its "competitive or contestable activities" (refined information)[2]. Although Ordnance Survey would agree that Ordnance Survey's 'unrefined information' is likely to overlap to a substantial extent with its Public Task information, it does not believe that this is necessarily true in all cases. The concept of "public task", which is directed at securing that information is available to Government, and "unrefined data", which is directed at separating out "monopoly" activities, are essentially directed to different issues. It is entirely possible, for example, that there could be a need for certain types of data to be produced as a "public task" matter in order to ensure that a certain specification or geographic coverage is maintained, despite the fact that similar products are available in the market for certain geographies and, as regards other customers, are regarded as competitive alternatives to the Ordnance Survey product. In this respect Ordnance Survey disagrees with the OFT view that the public service and national interest work of Ordnance Survey needs to be drawn narrowly to reflect the "monopoly element in the geographic information market"[3].


Q1a Distinction between public service and commercial activity


Although Ordnance Survey now has a revised Public Task, it remains the case that a clear distinction cannot be drawn between Ordnance Survey's "public" and "commercial" operations. Ordnance Survey is required to fund all of its operations (both Public Task and non-Public Task) under its Trading Fund model, and consequently has to obtain a commercial return on all of its activities. The distinction between its public service and commercial activity is therefore inherently blurred.


The OFT, as part of its CUPI Study, has recommended that there be accounting separation between Ordnance Survey's unrefined and refined information activities. However, this is not the same as a distinction between "public" and "commercial" activities - the OFT recognises that Ordnance Survey needs to charge for unrefined information in order to fund unrefined information activities. Also, as stated above, some Public Task activities may fall in Ordnance Survey's refined information activities.


Nor are the OFT's recommendations directly addressed at the issue many Government respondents have identified, which is that one of the main issues of data access for them is affordability. Although OFT believes that accounting separation would lead to cheaper unrefined information, because any possibility of downstream cross-subsidisation will be removed, the level of potential savings is as yet unassessed and may not be material. In any case, Government customers, who already benefit from extremely favourable terms under the collective purchasing agreements under which they obtain that data, are unlikely to be the primary beneficiaries of any such pricing adjustment.


Ordnance Survey therefore believes that the distinction between its public service and commercial activities will remain blurred for as long as it is required to self-finance all of its operations under the Trading Fund model. Some respondents have suggested an alternative model whereby Ordnance Survey's Public Task activities obtain direct Government funding and be made more freely available (both in terms of cost and restrictions on use)[4]. That would, of course, make the distinction clear, but Ordnance Survey itself is not able to change the model under which it operates (which is dictated by statute).


In accordance with the Government's Response to The Power of Information, Ordnance Survey understands that an independent review has been commissioned, to be published by Budget 2008, of the costs and benefits of the current Trading Fund charging model for the re-use of public sector information.


A number of respondents criticised Ordnance Survey's financial performance as a Trading Fund. Ordnance Survey disagrees with the analysis of these respondents who have either misinterpreted the financial information and/or misunderstand the financial targets which Ordnance Survey is required to meet. As the issue of Ordnance Survey's financial performance is not a direct subject of inquiry for this Committee, Ordnance Survey has provided further information on this issue in Annexe 2.


Q2 Independent Arbitration


Intelligent Addressing in its Uncorrected Evidence states that NLPG "cannot be licensed for use outside local government on what IA consider to be fair and reasonable terms because an element of NLPG data was originally derived from Ordnance Survey".


These issues have already been the subject of a complaint by Intelligent Addressing to OPSI under the Information Fair Trader Scheme and the Re-use of Public Sector Information Regulations. That complaint has been fully heard, both by OPSI and (in relation to a number of specific points) on appeal to APPSI. Intelligent Addressing succeeded in part of its complaint and OPSI made a number of recommendations to Ordnance Survey, including recommendations for some substantive amendments to its licensing terms, which Ordnance Survey has complied with.


Intelligent Addressing's appeal to APPSI (which was unsuccessful) was solely on the issue of the Re-use of Public Sector Information Regulations and did not affect OPSI's findings under the Information Fair Trader Scheme.


Ordnance Survey understands that Intelligent Addressing is dissatisfied with the ultimate outcome of its complaint but does not consider that dissatisfaction justifies the conclusion that OPSI's and APPSI's "processes do not offer clarity or certainty of redress because of a lack of empowerment and resources amongst the appropriate authorities". Part of Intelligent Addressing's complaint was ultimately unsuccessful on its merits. In respect of the part of the complaint that was successful, Ordnance Survey complied with OPSI's recommendations.


We note that the Intelligent Addressing complaint (or the factual substance of it) has been raised by no fewer than nine other respondents[5], many of whom have a relationship with Intelligent Addressing[6]. Ordnance Survey would like to emphasise that it took this complaint very seriously and has now addressed the issues raised to the satisfaction of the adjudicating bodies.


Q3 - Q5 Geographic Panel


Some submissions comment on the membership of the UK GI Panel. The initial members of the Panel were appointed by the then Parliamentary Under Secretary of State within the Office of the Deputy Prime Minister (Yvette Cooper MP) on the advice of ODPM officials. Four members of the GI Panel represent organisations with significant private and commercial sector interests and membership within the geographic information community.


Some submissions to the Committee have perceived a potential conflict of interest at Ministerial level as the sponsor Minister for the UK GI Panel, (and hence the Minister to whom the UK Location Strategy would be submitted), was also the sponsor Minister for Ordnance Survey. This original decision was made by CLG, but the perception has now been addressed following the changes in Ministerial responsibilities in June 2007.. Baroness Andrews, Parliamentary Under Secretary of State for Communities and Local Government, and the Minister with responsibility for the procurement of Geographic Information on behalf of Government, has assumed Ministerial responsibility for the UK GI Panel.


Q6 - Q8 National Interest Mapping Services Agreement


Ordnance Survey has nothing further to add to its previous submissions on these questions.


Q9 Competition


The Government Response to the CUPI Study was published on 26 June 2007 and Ordnance Survey is actively engaged in discussions with the OFT to resolve its outstanding concerns. Ordnance Survey expects that the final conclusion of these discussions, which are ongoing, will lead to some changes in Ordnance Survey's business model but as these discussions are ongoing it is difficult to comment more specifically on these.


Two issues that are not the direct focus of the OFT recommendations are those that have been raised by a number of Government respondents - data sharing and derived data[7]. While Ordnance Survey tries to do what it can to accommodate these needs of its Government customers and also recognises the need to continue to improve its licensing terms, these are two issues which present significant challenges to Ordnance Survey under its current Trading Fund model. For so long as Ordnance Survey is required to fund all of its operations from its revenues, it needs carefully to control the use of its data by licensing in order to preserve the value of the intellectual property rights in the data. It is Ordnance Survey's licensing income which accounts practically for its entire revenue. If Ordnance Survey were to allow unfettered sharing of its data (which is the ideal for Government customers) then either the prices charged for the data would need to significantly increase (to reflect the much broader use that is being licensed) or the value of its intellectual property rights to the taxpayer would quickly diminish. Clearly this is a spectrum and a balance needs to be struck. Ordnance Survey considers that the balance that it has currently achieved is a compromise which meets many of the needs of Government customers, while preserving the value of Ordnance Survey's assets.


Some of the Uncorrected Evidence makes speculative assertions which are presented as fact. In some instances unfounded allegations of unlawful or irregular behaviour on the part of Ordnance Survey are made. The Committee has asked for information relating to perceived unfair competition by Ordnance Survey. However, Ordnance Survey considers that there is a danger in coming to any conclusions based on information where issues either have not been brought before, or alternatively have already been adjudicated on by, a relevant court or regulatory body.

Annexe 1: Ordnance Survey Public Task




Ordnance Survey is an independent non-Ministerial government department and Executive Agency. It operates as a trading fund under the terms of the Government Trading Funds Act 1973 and The Ordnance Survey Trading Fund Order 1999. It is responsible to the Secretary of State for Communities and Local Government.


Ordnance Survey creates, maintains and distributes geospatial and cartographic data and products relating to Great Britain in the nation's interest. This paper sets out Ordnance Survey's Public Task.




Ordnance Survey's Public Task is to:


Collect and maintain uniform datasets with national coverage forming the official record of the natural and built environment of Great Britain, containing:

o detailed mapping of the built and natural landscape (topography[8]);

o high resolution address data;

o transport networks (including road, rail, waterways, tracks and paths);

o terrain and height data;

o administrative and electoral boundary information;

o geographical names (including features with imprecise extents such as "Dartmoor", "The Cotswolds", "Forest of Bowland", "South Downs" etc.).

Provide a nationally consistent cartographic portrayal of the topography of Great Britain at various scales including large scales;

Maintain a definitive three-dimensional satellite-based geodetic[9] reference framework of Great Britain that underpins the national datasets and facilitates the integration and analysis of location-based information from many sources;

Make the content of the datasets widely available in forms that are accessible to customers of all types for wider benefit. This will be in the form of products which are the direct output of those datasets. As part of its Public Task and in order to fulfil its trading fund obligations, Ordnance Survey will charge all customers for the licensing and use of its products;

Conduct its activities efficiently and effectively to maximise the broader economic value of its data, whilst complying with trading fund requirements;

Ensure that its data is capable of supporting the principles underlying the Digital National Framework in underpinning the association and integration of third party geospatial information.


In order to fulfil its Public Task, Ordnance Survey is required to collect and maintain topographic data at the following scales:


High Change Geographies[10]: 1:1250

Rural Areas[11]: 1:2500

National cover: 1:10000





The above datasets are required to fulfil Ordnance Survey's Public Task to ensure that a comprehensive, nationally consistent version of each exists in the public interest. Annex 1A sets out:


Ordnance Survey's datasets which fulfil its Public Task;

The products that are currently the direct output of those datasets; and

the rationale for including the various data within the Public Task.


The minimum levels of accuracy and revision required for those datasets are at Annex 1B.


The referencing systems and data collected and maintained by Ordnance Survey contribute to the development and integration of geographic and location based information collected and used by government, business and individuals.


As the National Mapping Agency of Great Britain, Ordnance Survey represents Great Britain overseas as experts on Survey, Mapping and Geographic Information. It provides a focus for the provision of public sector information into pan-European and international collaboration by National Mapping Agencies and the European Directive on the Infrastructure for Spatial Information in Europe (INSPIRE).


In discharging its Public Task, Ordnance Survey:


Seeks to maximise both the accessibility of, and the broader economic benefit arising from the use of the data. It therefore creates products directly from these datasets and makes them available, including through commercial licensing, to government and business customers and consumers.

Takes into account the views of customers (as well as, inter alia, technological changes and its trading fund requirements) to ensure that the range and content of these products meets their changing needs, and makes changes to content, accuracy and revision policies as may be necessary to ensure that the datasets and products remain fit for purpose. This may result in adding or withdrawing products from availability from time to time, as well as enhancing content and functionality.




Under The Ordnance Survey Trading Fund Order 1999, Ordnance Survey is required to fund all of its operations from its trading revenue so that the revenue is sufficient, taking one year with another, to meet outgoings and any further financial objectives required by HM Treasury. The HM Treasury requirement for the period 1 April 2007 to 31 March 2010 is, over the period taken as a whole, for a return on capital employed of at least [.......].


Government does not provide any direct funding by way of grant payments for the delivery of Ordnance Survey's Public Task, and Ordnance Survey is required to meet its financial obligations as a trading fund from the income generated by its activities, including its Public Task activities. Ordnance Survey may also, but is not required to, engage in non-public task activities. To the extent that it does so, these activities will also contribute to Ordnance Survey's trading fund obligations.




Ordnance Survey provides access to its data and products on a basis which first, enables it to deliver its Public Task and second, maximises the broader economic value of the information it holds. Data from the datasets forming the Public Task are made available to customers at the earliest stage of production consistent with the ability for Ordnance Survey to generate sufficient revenue to meet its Trading Fund requirements in delivering its Public Task. With ongoing investment in its technology infrastructure, Ordnance Survey may, in future, be able to increase the granularity for customers to obtain thematic subsets of the datasets within its public task.




Comment: This section is subject to the outcome of ongoing discussion with OFT. At this stage it seems clear that OFT's concept of "unrefined" and "refined" data cannot be directly matched to the Public Task outlined above. If there is inconsistency then the pricing model may be inconsistent with either the OFT view or the Public Task approach outlined below. Assuming agreement in due course there will need to be a period of transition to the new arrangements as in either case internal charging arrangements, new cost allocation processes and some form of accounting separation will need to be implemented.


Those products and datasets required to deliver the Public Task will, overall, be priced to cover the costs associated with the datasets and products, including investment costs, a share of corporate costs and the agreed rate of return. At the level of individual products and datasets, differential pricing is used.


Those products which fall outside the Public Task will be priced at market rates to at least cover the costs associated with the creation and distribution of the datasets and products, including investment costs, a share of corporate costs and the agreed rate of return taken as a whole across all such datasets and products. Where the product uses Public Task data, it will access that data at the same price and on the same terms as any third party.


In all cases, appropriate pricing and discount structures will be applied to reflect the level and extent of usage.




This section may also be impacted by the outcome of discussions with OFT


Ordnance Survey information is subject to Crown Copyright and Crown database rights. Ordnance Survey has delegated authority from the Controller of Her Majesty's Stationery Office to manage these Crown rights in its information on a day to day basis.


Ordnance Survey will operate a licensing system, consistent with the foregoing paragraphs, which enables it to deliver its Public Task and maximises the broader economic value of its data.


In operating its licensing system Ordnance Survey is committed to the principles of the OPSI Information Fair Trader Scheme.




The practicalities of implementation, amendment and review of the definition of the Ordnance Survey Public Task will be worked out separately.





The datasets listed here are those required to fulfil the Ordnance Survey's Public Task. The 'Public Task' rationale for each dataset is given, together with the products by which Ordnance Survey currently disseminates the datasets to customers of all types. Taken together the datasets and products form an integrated portfolio providing a framework of nationally consistent, authoritative and correlated geographic information from the detailed individual property level to the strategic regional and national overview.


Public Task Dataset

Statement of significance with respect to Public Task

Products currently produced from the Dataset

National Geographic Database (NGD)

1:1250 - high change areas

1:2500 - rural geography

1:10,000 - national cover

The data critically underpins essential core public sector functions concerned with:

Land and infrastructure development, management, exploitation and land registration;

Local and national governance and democratic process;

Sustainable communities, national security, border controls and law enforcement;

Environmental and built heritage conservation legislation, planning, and control.

It also provides a consistent national framework for a wide range of private sector business associated with the ownership and exploitation of Land and Property assets.

The database is populated directly from surveys at the three 'basic scales' and contains the core topographic content and unique identifiers forming the only nationally consistent, fully maintained and authoritative large scale topographic data available for the whole of Great Britain.


OS MasterMap(r) Topography Layer;




OS Sitemap(r)


Note: OS MasterMap Topography layer has a richer specification, data structure and content than Land-Line, including unique feature identifiers (TOIDs), allowing the product to support greater functionality within user applications than Land-Line which represents the previous generation of product specification and structure.

ROADS Database

The data underpins critical public and private sector functions associated with:

National/regional transport policy and planning and traffic management;

Routing and navigation including in-vehicle systems and street-level mapping;

Vehicle tracking, command and control and civil contingency/emergency services response co-ordination;

Highways infrastructure, gazetteers and street-works.

Populated directly from NGD and containing authoritative, geometrically precise and nationally consistent large scales communications (road, track and path) network data together with road access, height and weight restriction attributes for all of Great Britain.


OS MasterMap(r) Integrated Transport Network layer

ADDRESS-POINT Central Management System

The data underpins core public sector functions concerned with address location in:

Local and national governance and democratic process;

National security, border controls and law enforcement;

Land and property location and identification - gazetteers and indexes;

Environmental and built heritage conservation legislation, planning, and control.

In addition the data provides a consistent national framework for commercial applications for geo-referenced addresses.

Authoritative and fully maintained database of precisely grid referenced addresses providing consistently attributed detailed data for the whole of Great Britain, and forming the core addressing content of NGD.


OS MasterMap(r) Address Layer

OS MasterMap(r) Address Layer 2



National Height database:



5m interval - Urban & Rural

10m interval - some rural and mountain & moorland.


Digital Terrain Model (DTM):

2.5m @ 10 m grid - Urban & Rural (5m contours)

10.0m @ 10 m grid - some rural (10m contours) and mountain & moorland

The base level data, available in Contour or DTM formats underpins public sector activity concerned with:

Public Infrastructure, utility services and environmental planning, analysis, development and management;

Landscape and development planning including waterways management and floodplain modelling;

Risk assessment and mitigation (e.g.: flood and wind exposure modelling);

Ground surface and airspace obstruction modelling for national security, defence training, aviation and radio-telecommunications applications.

Authoritative, nationally consistent, indexed and maintained database of surveyed contours and point heights forming the core terrain and height content of NGD.


Land-Form PROFILE(r) contours

Land-Form PROFILE(r) DTM -
(10m grid)

Supplementary high accuracy, high resolution DTM:

0.5m @ 2 m grid - selected urban & flood plain;

1.0m @ 5 m grid - rural (5m Contours)

2.5m @ 10 m grid - rural (10m Contours) and mountain & moorland

Supplementary high accuracy, high resolution terrain data that supports high precision applications including:

Development and civil engineering land assessment and high resolution terrain modelling;

Utility asset planning and management - pipeline pressure and signal propagation analysis;

Environmental and Insurance risk modelling (flood, pollution and noise mapping);

Emergency services and civil contingency planning / resource deployment.

Landscape visualisations in combination with other datasets for development planning and control, and presentations.

Detailed terrain model data generated by precise observations providing consistent height information for precise landscape analysis and modelling applications.


Land-Form PROFILE(r) Plus DTM - (2m, 5m and 10m grids).

1:50,000 Scale Height data


Contours: 10m interval - national cover


DTM: 3.0m @ 50 m grid

Lower resolution height data efficient for:

Military aviation navigation systems;

Strategic planning;

Telecommunications network and cell modelling and analysis;

Regional and catchment-level hydrological modelling.

Database of contours derived from OS Landranger Mapping providing consistent national data at a resolution appropriate to regional terrain modelling and visualisation.


Land-Form PANORAMA(r) Contours


1:25,000 Raster Database

The data contains all of the information necessary to underpin:

Strategic, neighbourhood and environmental planning, development and control, and designation of specified (e.g.: conservation) areas;

Rural estate and forestry management and controlled zone administration (e.g. veterinary);

Civil contingency and emergency response (particularly Coastguard, Air-Sea and Mountain Rescue);

National security and defence, command and control: - designated NATO standard military training map;

National standard for education and the safe participation in outdoor activities.

Derived from NGD and providing complete, maintained and consistent national coverage at 1:25,000 scale - essential where a large area of interest and greater visual definition of communications networks is required.


1:25,000 Scale Colour Raster

OS Explorer Map

1:50,000 Scale Database

Forms the core of citizen consciousness of national geography, location and neighbourhood and is the essential base-map for:

National security, defence and military training functions;

Wide area environmental management, conservation and development;

Asset management and Marketing analysis;

General topographic reference including for tourism.

The database underlying the ubiquitous OS Landranger national map for general wide area topographic location and reference.


1:50,000 Scale Colour Raster

OS Landranger Map

1:250,000 Scale Database

Consistent national small scales database of communications, settlements, major hydrology and significant vegetation providing selected topographic information at the regional level appropriate to general planning, routing and navigation, statistical analysis and display and indexing at the regional, national and pan-European level.


1:250,000 Scale Colour Raster

Administrative Boundary Maps

Administrative Areas Database

The data underpins core public sector activities concerned with location, indexing and strategic analysis; identification of local and parochial government responsibilities, and with management of electoral and democratic processes.

The authoritative reference dataset of administrative area polygons and complementing other formal management area boundaries (e.g.: Health Service; Utility Services) and statistical analysis areas.




In addition to these datasets, as the National Mapping Agency Ordnance Survey provides other services for the wider public good including:

Scientific quality location and positioning reference information;

Printing and map content support to assist MoD in their work;

Survey activity to assist in the timely and accurate registration of land.







Ordnance Survey sets and monitors standards of accuracy for its datasets and products commensurate with the "nominal scale" of the data.


Accuracy of geographical data may be defined in terms of parameters relating to:

Precision: the resolution of the geo-reference co-ordinates of individual items contained within the data;

Geometric fidelity: the degree to which the geometry of individual features within the data represent the ground alignment and shape of the features being represented;

Relative accuracy: the degree to which distances between adjacent or near-adjacent features contained within the data represent the equivalent ground distances, orientations and physical relationships;

Absolute accuracy: the degree to which the geo-locations of feature(s) within the data represent their absolute position on the surface of the earth.


Accuracy standards for the datasets and products maintained as the Public Task will be subject to continuing dialogue with major customers in government and business, and consumers.


Ordnance Survey's databases and products are produced or derived from the information collected during survey and mapping activities for the most detailed large scales datasets. Current survey accuracy standards for these data are:


Topographic data:



Absolute accuracy

Compared with the National Grid. Absolute error -
Root Mean Square Error (RMSE)

Relative accuracy

Relative error.

(Over specified distance between points taken from the map)


0.5 metres

0.5 metres
(60 metres)

1:2500 resurvey or reformed
(urban and rural)

1.1 metres

1.0 metres

(100 metres)

1:2500 overhaul
(urban and rural)

2.7 metres

1.9 metres

(200 metres)

1:10 000
(mountain and moor-land)

4.1 metres

4.0 metres

(500 metres)


Terrain and height data:



Digital Terrain Model



High Resolution Data


DTM Grid Interval

Absolute accuracy

Absolute error - Root Mean Square Error (RMSE)


Contour Interval

Absolute accuracy

Absolute error - Root Mean Square Error (RMSE)

Urban & selected floodplain areas

2.0 metres

0.5 metres

Only supplied as DTM


Rural areas

5.0 metres

1.0 metres

Only supplied as DTM


Mountain and moor-land areas

10.0 metres

2.5 metres

Only supplied as DTM



Standard Resolution Data





Urban areas

10.0 metres

2.5 metres

5.0 metres

1.0 metres

Rural areas

10.0 metres

2.5 metres

5.0 metres

1.0 metres

Rural areas

10.0 metres

5.0 metres

10.0 metres

1.8 metres

Mountain and moor-land areas

10.0 metres

5.0 metres

10.0 metres

1.8 metres





Ordnance Survey uses a combination of Continuous and Cyclic Revision programmes to maintain the currency of the Public Task datasets, according to the nature of the change and its importance to users.


Continuous Revision:


High profile developments for which user demand will require all of the relevant information to be captured by the date of completion/opening;

Significant housing and industrial developments, new communications (roads, railways etc.) and other significant major changes to the landscape, including demolitions and changes to addressing and naming information, which merit inclusion within the database within 6 months of identification of the change.


Cyclic Revision:


Systematic sweeps, including the use of remote sensing techniques, through the mapping of rural and mountain & moorland areas at intervals of between 2 and 10 years according to the nature of the landscape and the frequency of change, for:


Other changes, particularly in rural and moor-land areas to buildings, land enclosures, vegetation and other less significant geography.


Revision policies for the datasets and products maintained as the Public Task will be subject to continuing dialogue with major users in the government, business and consumer arena.



Annexe 2: Ordnance Survey's Financial Performance




Financial performance of the Trading Fund:



Several submissions have discussed Ordnance Survey's financial performance as a Trading Fund[12]. The Ordnance Survey Framework Document 2004 makes it clear that Ordnance Survey is required only to generate sufficient revenue to cover operating costs, investments and repayments and a return on capital employed, year on year in a sustainable manner. The Framework Document makes it clear that, rather than focus on generating profit:


"Financial management of Ordnance Survey is underpinned by three principles:

The Trading Fund model is one of breaking even taking one year with another after allowing for operating costs, investment needs, loan repayments and agreed levels of dividend.

In the event that Ordnance Survey is more profitable than forecast after investing in national interest and customer driven improvements, surpluses in excess of those needed to sustain future development can be avoided by lowering prices.

Revenue shortfalls will be compensated, where possible, by an appropriate combination of increased productivity, efficiency savings, reduced costs, lower dividends and curtailing loss-making non-core activities."



Any consideration of Ordnance Survey's financial performance with regard to NIMSA[13] should take into account that NIMSA was a cost-recovery contract not a grant. NIMSA funding covered only those agreed activities actually undertaken.


Any analysis which disregards revenue from NIMSA[14] must also disregard equivalent costs, since the costs incurred on NIMSA-related activities would not have been incurred in the same period without the NIMSA funding. As the outputs of NIMSA-funded activities have benefited all users, it is more correct for financial analyses of Ordnance Survey's performance to include both costs and revenue related to NIMSA.



Government support for workforce restructuring[15] (a total of 18m over the financial years 1999/2000 to 2001/2002) assisted Ordnance Survey to transfer organisationally into the Trading Fund environment. Ordnance Survey would otherwise not have invested in this restructuring with the consequential implications for long term operating costs and business efficiency.



The AA settlement[16] related to unpaid royalties (including royalty liabilities incurred after the start of the Trading Fund) and to costs of investigation and pursuance of the infringements that Ordnance Survey would not have incurred had AA been properly licensed for those uses of the Crown copyright material.


Disregarding the value of the AA settlement as an exceptional item is only appropriate if other exceptional items are also disregarded, such as a significant sum to cover the ongoing costs of Voluntary Early Retirement resulting from a staff restructuring that reduced the size of the workforce by 20% during 2002-03.



Discussions on Ordnance Survey's financial performance as a Trading Fund since its inception on 1 April 1999, and particularly in relation to suggestions that Ordnance Survey's prices have remained broadly unchanged[17] during the life of the Trading Fund, must be set in the context of:

Introduction, with effect from 1 November 1999, of the Business Geographics product group covering a portfolio of 13 medium and small scales digital products, many with significantly reduced prices;

Significant reductions in the standard list price of Land-Line (5%), 1:10,000 Scale Raster data (10%), OSCAR Asset-Manager (12.5%), and Digital Use Licence charges (5%) with effect from 1 September 2000;

and significant other cost expenditure during the life of the Trading Fund related to:

Technical restructuring of the large scales database from the OS 93 specification to the OS 96 specification and to the introduction of the OS MasterMap topographic layer;

Data management, customer ordering and data delivery technology to support OS MasterMap products;

A significant proportion of the Positional Accuracy improvement and rural revision programme (i.e.: the 60% of the programme not funded by NIMSA);

Major new business systems to support long term efficiencies in business operations;

Provision of over 3 million free maps for 11-year-olds up to 31 March 2006 as part of Ordnance Survey's continuing support for education.


In addition through efficiency savings Ordnance Survey has absorbed over 20% cumulative cost inflation during the life of the Trading Fund.



In assessing Ordnance Survey's financial performance, comparisons made in some submissions of costs of activities and Ordnance Survey staff numbers[18], it is necessary to recognise that Ordnance Survey has contracted commercial companies to undertake activities such as rural revision.



Ordnance Survey believes that meaningful analysis of its performance as a Trading Fund should be based upon those trading items on which Ordnance Survey is targeted as a Trading Fund to make a return on capital employed, and which therefore form the basis of the Ordnance Survey's business model.



There may be confusion among some who have contributed evidence to the Committee, regarding the payment of dividends to Government by Ordnance Survey[19].


During the first five years of the Trading Fund (from 1 April 1999 - 31 March 2004), Ordnance Survey was required to demonstrate an ROCE of at least 9.5% averaged over the 5-year period. In the period 1 April 2004 - 31 March 2007 the target was 5.5% ROCE, again averaged over the three years.


In the five-year period up to 31 March 2004, Ordnance Survey was permitted to re-invest the ROCE back into the business during a period of major investment. Since 1 April 2004, Ordnance Survey has been required to pay over annual dividends to Government in line with the ROCE target, albeit with payments phased across the three years to accommodate anticipated working capital availability.


[1] Department for Environment Food and Rural Affairs, Uncorrected Evidence 08; Defence Intelligence, Intelligence Collection Strategy and Plans, Ministry of Defence, Uncorrected Evidence 10; Local Government Association / Improvement and Development Agency, Uncorrected Evidence 13; Local Government Data Unit - Wales, Uncorrected Evidence 14; The Association of Regional Observatories, Uncorrected Evidence 16

[2] Uncorrected Evidence 03, paragraph 4.1

[3] Uncorrected Evidence 03, paragraph 4.18

[4] For example, Local Government Association / Improvement and Development Agency, Uncorrected Evidence 13; The Association of Regional Observatories, Uncorrected Evidence 16; Defence Intelligence, Intelligence Collection Strategy and Plans, Ministry of Defence, Uncorrected Evidence 10

[5] Local Government Association / Improvement and Development Agency, Uncorrected Evidence 13, paragraph 10 "issues over licensing of [NLPG] data remain intractable despite effort on several fronts over recent months"; Getmapping, uncorrected evidence 07, section b); OFT, Uncorrected Evidence 03, paragraph 4.32; OPSI, Uncorrected Evidence 02, paragraph 14; Pollard, Uncorrected Evidence 11; Corbin, Uncorrected Evidence 12, paragraph 5; Association of Geographic Information, Uncorrected Evidence 06, paragraphs 2.2, 2.3, 8.2 and 8.3; The Locus Association, Uncorrected Evidence 05, "a member's recent complaint"; Government Data Unit - Wales, Uncorrected Evidence 14, Q2

[6] Intelligent Addressing is a limited company in a "public/private partnership" with Improvement and Development Agency and is a member of The Locus Association and Association of Geographic Information.

[7] Department for Environment food and Rural Affairs, Uncorrected Evidence 08; Local Government Data Unit - Wales, Uncorrected Evidence 14; The Association of Regional Observatories, Uncorrected Evidence 16


[8] Topography: Including defining the surface shape and composition of the landscape, comprising both natural and artificial features.

[9] Geodetic: Relating to the scientific discipline that deals with the precise measurement and representation of the earth, its gravitational field, and other related phenomena. Within Ordnance Survey geodetic-quality information forms the high precision framework that ensures the correct positioning of all mapping and other data against the National Grid.

[10] Predominantly urban areas and areas of significant development.

[11] Predominantly rural settlements and developed agricultural land.

[12] Intelligent Addressing Limited, Uncorrected Evidence - 04, paragraph Summary - Q6, paragraph Q1.3, paragraph Q6.5; Locus Association, Uncorrected Evidence - 05; Background - 6th paragraph, Locus Response to Q1 - 2nd paragraph; Chris Corbin, Uncorrected Evidence - 12; Paragraphs 4 and 5.

[13] Uncorrected Evidence 04, paragraph Q1.3; Uncorrected Evidence - 05; Background - 6th paragraph.

[14] Uncorrected Evidence 04, paragraph Q1.3; Uncorrected Evidence - 05; Locus Response to Q1 - 6th paragraph.

[15] Uncorrected Evidence 04, paragraph Q1.3

[16] Uncorrected Evidence 04, paragraph Q1.3

[17] Uncorrected Evidence 04, paragraph Q1.3, paragraph Q6.1

[18] Uncorrected Evidence - 04, paragraph Q6.5.

[19] Uncorrected Evidence - 04, paragraph Q6.2; Uncorrected Evidence - 05, Background 6th paragraph; Defence Intelligence, Intelligence Collection Strategy and Plans, Ministry of Defence - Uncorrected Evidence - 10, paragraph 10 Q6 .