FUNDING
240. There are two sources of funding for the space
element of GMES: subscriptions to ESA and the EU Framework Programme
7.[433] The ESA GMES
Space Component Programme aims to provide the satellite infrastructure
to support the GMES services. The original ESA estimate was that
this would cost 2.3
billion from 2006-2013. It is planned that this will be funded
50% by ESA member state subscription and 50% from the EU. Two
problems arise from the joint funding of the ESA Space Component
Programme. First, EU funding for GMES comes through the FP7 space
programme. Of the 1.2 billion allocated to GMES through
FP7, the EU is planning to invest just 780 million in the
ESA Space Component programme.[434]
This is 370 million short of the 1.15 billion ESA
expected the EU to contribute. Secondly, the rules for industrial
return (juste retour) differ for ESA and EU programmes.
The UK will be entitled to industrial return from its subscription
through the ESA but not for money invested through EU at a level
of 13.1%.
241. The UK contributes to the EU funding for ESA's
Space Component Programme through its net contribution to the
overall budget of the EU:
Table 15: European Commission Proposal
for FP7 funding of the ESA Space Component Programme
Year | Third Party Data/ million
| Space Infrastructure/ million
| Annual Total/ million
| UK Contribution/ million
|
2007 | 48 |
- | 48
| 6.3 |
2008 | - |
- | -
| - |
2009 | - |
85 | 85
| 11.1 |
2010 | 50 |
120 | 170
| 22.3 |
2011 | - |
125 | 125
| 16.4 |
2012 | - |
160 | 160
| 21.0 |
2013 | 32 |
160 | 192
| 25.1 |
Total | 130
| 650 | 780
| 102.2 |
Source: BNSC, Ev 363
242. The overall UK contribution to the programme
through ESA is as follows:Table
16: ESA Member State Funding of GMES Space Component Programme
Segment/Phase |
Timing | Member State Subscription/ million
| UK Subscription/ million
|
1/1 | 2006-2009
| 250 | 11.04
|
1/2 | 2008-2012
| Decision mid 2007 | Decision mid 2007
|
2/- | 2009-2013
| Decision 2008 | Decision 2008
|
Source: BNSC, Ev 363
243. The UK's subscription of 11.04
million (£7.23 million) to the optional ESA programme is
split between several BNSC partners (Table 17). Defra is the policy
lead on GMES because it is deemed to be likely to be the primary
user of information produced by the programme.
Table 17: Contributions to ESA optional
programme for GMES
BNSC Partner |
Contribution over 3 years (2006-2009)
|
Defra | £2.5 million
|
NERC | £2.2 million
|
DIUS (previously DTI) | £1.53 million
|
MoD | £1.5 million
|
Source: Defra,Ev 281
244. It has been asserted that the UK's subscription
to the ESA programme is unacceptably low. UK funding amounts to
a 5% share approximately of the ESA programme compared to a 30%
share for Italy and a 31% share for Germany.[435]
Mr Dordain, Director General of ESA told us that "I would
like much more UK support in the applications of earth observation,
for global monitoring and environmental security."[436]
UK Space argues that "GMES remains 75% under-funded by the
UK, seriously prejudicing the UK's role in EU exploitation of
Earth Observation."[437]
We note that both of these comments come from parties with vested
interests: ESA is running the programme and the UK space industry
receives contracts in proportion to the UK's subscription due
to the principle of juste retour. Defra explained that
"The UK contribution has been heavily criticised by industry
as the geographic return rules of ESA mean that UK companies are
unable to secure major contracts in this programme."[438]
245. There is concern within the BNSC that the GMES
programme does not meet user objectives and policy requirements
and therefore does not warrant additional funding. Dr David Williams,
Director General of BNSC, told us that "the reason why the
UK has not gone into the higher level is because at the moment
the programme is not deemed to meet the policy requirements of
government."[439]
He explained further that it "is not seen to be delivering
what policy departments want to do their work [
] it would
be wrong to put money into a programme that will not deliver at
day one what we perceive is necessary to meet the policy objectives."[440]
Defra is concerned that the proposals, especially those relating
to the ESA GMES Space Component Programme, will not provide an
operational system that guarantees continuity of data. [441]
As it is currently designed, GMES is not going to be an operational
service but rather a series of one-off satellites. [442]
Defra will not change its mind about GMES unless a guarantee of
continuity can be given. The Met Office "supports the user-driven
approach towards GMES adopted by DEFRA".[443]
246. The situation has been exacerbated because Defra
believes that GMES is driven by short-term industrial needs rather
than long-term user driven goals. Defra told us that
it was enlightening to see how European counterparts
competed to increase their commitment to the GMES programme. This
was driven largely by commitment to their respective national
space industry and demonstrated the difficulties of a user-driven
approach in an environment that is not driven by the common constraints
and objectives.[444]
Dr Williams, Director General of BNSC, agreed that
GMES was "driven too much by short-term industrial goals
and not enough by looking at what the actual application user
really needs to have the confidence to move over to using the
system. Until we solve that problem, I think it would be wrong
to move from the position we are in".[445]
247. The BNSC has been working with the Commission
and ESA in order to alter ideas about the structure of the programme.
However, the BNSC acknowledged that "Persuading our European
colleagues to agree that GMES should have better data continuity
guarantees is proving to be difficult."[446]
The main difficulty is that ESA measures "continuity in the
context of work flow in the establishments and industry and not
in the output data sets."[447]
ESA acknowledged that it is partly to blame for Defra's lack of
confidence in the project. David Southwood told us that "it
is also a failure on our part and also particularly on the Commission's
part to persuade Defra that really what we are talking about is
what they want [
] I see a confidence deficit on the part
of Defra, but you have to recognise that if somebody does not
have any confidence in you there is a deficit on the other side
[
] there has been a failure of communication or a failure
to understand what we believe is the long term commitment here."[448]
We sense that there may be a compromise in the near future since
the BNSC has recently drawn up an agreement with Defra on the
importance of operational observations for climate change.[449]
If the BNSC is able to convince Defra that GMES will provide such
operational observations, Defra may increase funding for the programme
in future.
248. The UK's relatively low investment in the GMES
programme will have an impact upon UK space industry. Whereas
the German industry can expect contracts in the region of £45
million due to juste retour, the UK industry only expects
contracts in the region of £7 million. These contracts would
not only benefit UK industry but would bring benefits to the UK
economy by providing jobs and potentially developing technologies
that could be exploited even further. The space industry has looked
to Defra to increase its investment because it is policy lead
for the programme. Defra, however, has resisted increasing its
investment because of its concerns about the programme and because
it believes that as a user it does not have a responsibility to
industry. Professor Dalton, Departmental Chief Scientific Adviser
at Defra, explained that "Defra's business is not essentially
trying to stimulate the industry to be able to produce their machines
in the first place."[450]
As for NERC, the other funding partner, when we questioned Professor
Alan Thorpe about the purpose of NERC's investment in GMES he
emphasised that their investment "is not focused purely on
industry. It is focused on making sure that we stimulate the basic
science and understanding that we need of the climate system."[451]
Professor Wingham from UCL, Director of the NERC Centre for Polar
Observation and Modelling, supported NERC's approach, stating
that "My view has been that NERC's approach to this question,
particularly to what extent should it fund GMES, just to be practical,
has been, in my view, sensible and appropriate for that agency."[452]
249. Defra and NERC have made it clear that they
do not intend to increase their investment in the programme. Professor
Dalton told us that "It was quite difficult for us to be
able to come up with the sort of money that we did in order to
be able to make our contributions to GMES".[453]
He explained further that "In our view, we have done as much
as we possibly can under the circumstances."[454]
Professor Thorpe told us that regarding financing GMES "I
do not think NERC would have or should have taken a larger role
in that."[455]
Both suggest that additional funding should come from another
source. Professor Thorpe, for example, told us that "Clearly
DTI have a role in technology development and industrial stimulation.
It would be natural to ask the question whether the issue should
lie there."[456]
Given the machinery of Government changes, it is still unclear
as to whether DIUS or the Department for Business, Enterprise
and Regulatory Reform is responsible for the DTI's ESA subscriptions.
250. We asked ESA whether it would be possible for
the UK to change its subscription level to GMES. The Director
General, Jean-Jacques Dordain told us that "When a participating
state wants to change its contribution and increase itit
is forbidden to decrease itit can do that any time providing
the other participating states agree."[457]
He identified two particular opportunities: summer 2007 when states
have to confirm or change their contribution to the first part
of GMES, and the Ministerial Council at the end of 2008 when states
will consider segment two of GMES.[458]
251. We understand the reasons for Defra's cautious
approach to funding GMES and recommend that it continue to work
with the BNSC and the ESA regarding its concerns about the programme.
If these concerns are addressed, given that extra funding to GMES
would benefit UK industry through the ESA's policy of juste
retour, we recommend that the Government consult industry
regarding the level of subscription it deems necessary to stimulate
activity and then consider providing additional funding to GMES.
THE LEAD BNSC PARTNER
252. The BNSC has nominated Defra as the lead department
on GMES. The lead was originally held by the DTI and it has been
transferred to Defra in recognition of the importance of GMES
in developing environmental policy. However, the information produced
by GMES could be used by a number of Government departments, including
DFID, DIUS, MoD, NERC and the Met Office. [459]
253. Defra has raised some concerns about its role
as lead on this programme. Professor Sir Howard Dalton, Chief
Scientific Adviser at the Department of Environment, Food and
Rural Affairs told us that "We are principally a user of
the information. We are not, in a sense, there to fund and organise
and set it all up in the first instance."[460]
Professor Dalton explained further that "we are doing it
because we are a user and we need this activity to take place.
Who should do it? That is a good question. I will leave that up
to other government departments to sit down and think about it."[461]
254. Several other submissions highlighted a problem
with the lead on GMES. ESA told us that Defra does not seem to
have the confidence to act with authority.[462]
Colin Paynter from Astrium said "We need a stronger co-ordination
at the centre of government [
] so that appropriate decisions
can be made early on".[463]
Professor Shaun Quegan told us that "Clearly there is not
one organisation which can necessarily take a lead on this. BNSC
clearly should have a role in this because it is an overarching
issue."[464]
255. Defra has set up mechanisms that will help it
to lead on this programme. For example, it has appointed a full
time GMES Co-ordinator to handle the workload and Defra participates
in the GMES Programme Board, which is the core group of departments
responsible for UK policy on GMES. Defra states that this group
has been "hampered by differences over objectives and funding
responsibility" but that things are improving.[465]
Defra also works with a number of government departments on GMES
through a GMES Whitehall Group chaired by Defra's Environment
Strategy Director. The group is underpinned by a team with membership
from Defra, the then DTI, NERC, MoD and Met Office.[466]
Defra told us that this group "has not met for a while as
GMES PB discuss the next stages of GMES programme and implications
for UK."[467]
256. As we have previously observed (paragraph 45),
it is difficult for one department without substantial experience
of space projects to provide the policy lead for a programme such
as GMES that has multiple future applications and possible policy
directions, even if they are likely to be the main user of the
material produced by the programme. Defra's lead on GMES is
proving problematic. We recommend that the BNSC Headquarters provide
the lead and work closely with Defra as primary user. GMES is
a programme where a strengthened BNSC Headquarters could provide
leadership, drive and ambition.
APPLICATIONS
257. Numerous applications will be supported by the
GMES programme. There are plans to create applications centres
focusing on environmental monitoring, vegetation monitoring, crisis
management and humanitarian aid, and the development of a European
spatial data infrastructure.[468]
Intellect explained that the location of Applications Centres
will be decided during the ESA phase of the programme and will
be influenced by the subscriptions that Member States have made
to ESA's GMES programme.[469]
BARSC has highlighted its concerns that the UK has not yet claimed
any area as a priority.[470]
It suggested that the UK could focus upon atmospheric monitoring
aspects of GMES.
258. We are concerned lest the BNSC allow the discussions
between its partners regarding subscriptions to the ESA programme
to distract it from considering how the UK will make best use
of GMES services and how it can best exploit the programme downstream.
Professor Duncan Wingham from UCL told us that "our experience
has been that if you pay for satellites you must invest 40% of
your budget in the downstream application of the data if you wish
to be successful. It is not altogether clear to me that we are
doing that with GMES."[471]
Intellect emphasised to us that "Long term wealth creation
under GMES will be facilitated by having the most appropriate
Applications Centre(s) in the UK."[472]
Furthermore, Matthew Stuttard warned us that if it does not take
action "the UK will get in a situation where it has no option
but to buy services by proxy through the EC from non-UK companies."[473]
The BARSC is concerned that the UK has not yet claimed any service
area as a priority.[474]
It has said that the UK could focus upon the atmospheric monitoring
aspects of GMES.[475]
259. The Government needs to work out how it will
support applications arising from GMES. We recommend that the
BNSC commission a study similar to the ABOTTS report looking at
the opportunities and challenges created for the UK Earth observation
sector by the GMES programme. The UK's approach to the GMES programme
including applications should be outlined in the space strategy.
396 Ev 293 Back
397
Q 366 Back
398
Q 363 Back
399
BNSC, Space Activities 2006, p 29 Back
400
HM Treasury, Stern Review: The Economics of Climate Change, October
2006; IPCC, Climate Change 2007: The Physical Science Basis, February
2007 Back
401
Science and Technology Committee, Fourth Report of Session 2006-07,
Research Council Institutes, HC 68-I, p 26 Back
402
NERC, Earth Observation Strategy 2004-2009, December 2004 Back
403
Centre for Air-Sea Interactions and Fluxes (CASIX), Climate and
Land-Surface Interaction Centre (CLASSIC), Centre for Polar Observation
and Modelling (CPOM), Centre for Terrestrial Carbon Dynamics (CTCD),
Centre for the Observation and Modelling of Earthquakes and Tectonics
(COMET), Data Assimilation Research Centre (DARC), Environmental
Systems Science Centre (ESSC). Back
404
"Providing a health check on Planet Earth-the UK's first
national centre for Earth observation", NERC Press Release,
1 August 2006 Back
405
"Industry and science join forces to strengthen the UK's
capability in monitoring the environment from space", BNSC
Pres Release, 1 May 2007 Back
406
Ev 231 Back
407
Q 533 Back
408
Ev 298 Back
409
Ev 199 Back
410
Ev 397 Back
411
Ev 282 Back
412
Ev 297 Back
413
Q 367 Back
414
Q 377 Back
415
Q 345 Back
416
Ev 396 Back
417
Q 345 Back
418
Ev 397 Back
419
Ev 283 Back
420
Representatives from Assimila Ltd, EADS Astrium, QinetiQ, Plymouth
Marine Laboratory, Infoterra-Global, Infoterra Limited, SciSys,
Defra, RAL, DTI, MoD, NERC, Met Office and an independent consultant.
Back
421
BNSC, EOPB Strategy 2003 to 2006, January 2004, p 3 Back
422
As above, p 4 Back
423
Ev 283 Back
424
Ev 231 Back
425
Q 340 Back
426
Q 361 Back
427
Ev 298 Back
428
Ev 284 Back
429
Q 340 Back
430
Q 347 Back
431
Ev 281 Back
432
Q 544 Back
433
Ev 362 Back
434
The remaining money will be used to help establish pre-operational
GMES environmental and civil security monitoring and information
services. Back
435
Ev 281 Back
436
Q 531 Back
437
Ev 131 Back
438
Ev 281 Back
439
Q 668 Back
440
As above. Back
441
Ev 357 Back
442
Q 624 Back
443
Ev 296 Back
444
Ev 284 Back
445
Q 164 Back
446
Ev 357 Back
447
As above. Back
448
Q 548 Back
449
Q 623 Back
450
Q 326 Back
451
Q 329 Back
452
Q 372 Back
453
Q 326 Back
454
Q 327 Back
455
Q 329 Back
456
Q 330 Back
457
Q 546 Back
458
As above. Back
459
Ev 280 Back
460
Q 310 Back
461
Q 324 Back
462
Ev 338 Back
463
Q 39 Back
464
Q 372 Back
465
Ev 284 Back
466
Ev 281 Back
467
Ev 285 Back
468
"Space Applications for Environment and Security", http://ec.europa.eu/research Back
469
Ev 213 Back
470
Q 382 Back
471
Q 384 Back
472
Ev 213 Back
473
Ev 251 Back
474
Q 382 Back
475
Ev 396 Back