Memorandum by the Department for Communities
and Local Government (DCLG)
ORDNANCE SURVEY: PUBLIC SERVICE INFORMATION
INTRODUCTION
I.1 This paper sets out the Department for
Communities and Local Government's response to follow-up questions
from the Communities and Local Government Committee on the Ordnance
Survey.
I.2 Ordnance Survey is the national mapping
agency for Great Britain. It is a Government Department in its
own right with Executive Agency status. It gained Trading Fund
status in 1999. Its Ministers are the Department's Ministers.
The Secretary of State for Communities delegates responsibility
for Ordnance Survey to its `shareholder' Minister, Angela Smith.
Baroness Andrews is responsible for the Department's customer
relationship with Ordnance Survey. A protocol is in place to
ensure separation at both Ministerial and official level in the
Department to avoid any conflicts of interest or perceptions of
conflicts arising in respect of the Department's relationships
with Ordnance Survey.
I.3 The Department's `shareholder' interest
in Ordnance Survey is supported by the Shareholder Executive.
The Executive is an expert unit based at the Department of Trade
and Industry but reporting to the Cabinet Secretary, with a mission
to improve fundamentally the government's performance as a shareholder
and to provide a source of corporate finance expertise within
government.
Q1 In 2002, the Committee's predecessor, the
Transport, Local Government and the Regions Committee, concluded
its report on Ordnance Survey: "there is a clear need to
define the boundaries of Ordnance Survey public service and national
interest work". To what extent has the position changed in
the intervening five years?
(a) In evidence to the Select Committee's
recent enquiry into DCLG's Annual Report, the Department said
the ending of NIMSA meant there was "no distinction between
public service and commercial activity for Ordnance Survey"
(Third report of 2006-07, HC 106; Ev. 105). But OS remains the
largest public sector information holder in the UK, providing
publicly gathered data under licence to organisations both public
and private. How clear are the boundaries between its roles as
the holder of base geographical information required by its partners
and competitors to make their products commercially viable and
as a commercial operator within the same marketplace as those
partners and competitors?
1.1 Ordnance Survey's public task is set
out in Section 1 of the Framework Document published in 2004,
which makes it clear that Ordnance Survey is charged with collecting,
maintaining and disseminating geographical information. It is
important to note that all of Ordnance Survey's operations contribute
to commercial revenue generation in some way.
1.2 In the light of recent events such as
the publication of the Office of Fair Trading's (OFT) study on
the commercial use of public information (CUPI) and the ending
of NIMSA payments to Ordnance Survey, it was agreed that the definition
of the public task should be revised to further clarify its boundaries.
This work is ongoing, and we will send the Committee the public
task document once it has been finalised and approved by Ministers.
Q2 In 2002, the Select Committee also identified
"a clear need for some form of independent arbitration so
that conflicts could be resolved" between OS and its customers.
To what extent has that position changed in the intervening five
years?
2.1 Since 2002, Ordnance Survey was accredited
under the Information Fair Trader Scheme (IFTS) operated by the
Office of Public Sector Information (OPSI). This ensures that
Ordnance Survey operates in an open, transparent and fair way
in respect of its trading activities. Anyone dissatisfied with
the way Ordnance Survey responds to requests for access to information
and data may complain to OPSI. In recent years, OPSI has investigated
two complaints against Ordnance Survey and reported accordingly.
OPSI found in favour of Ordnance Survey in one case and against
on part of the complaint in a second. In the second case, a request
by both sides for a review to the Advisory Panel for Public Information
(APPSI) found that the case was not covered by the PSI regulations.
GEOGRAPHIC PANEL
Q3 What is your assessment of the UK Geographic
Panel's operation since its introduction in 2005?
3.1 The Panel has provided a useful focus
for the strategic development of Geographic Information in the
United Kingdom. It has a high calibre senior representation from
producers and users of geographic information across the public
and private sectors. The Panel communicates openly with interest
groups and regularly publishes information on its website.
3.2 The Panel's main task has been to drive
the development of a Location Strategy for the United Kingdom.
Good progress has been made and key stakeholders were involved
through a series of events. The Panel is now considering the way
forward to maximise synergies with the European INSPIRE directive,
which aims to improve access to geographical information. The
Panel intends to make recommendations to the Minister, Angela
Smith, during 2007.
Q4 The Select Committee's predecessor, in
recommending in 2002 that an advisory panel on geographic information
should be created, suggested that it should have at least three
members, including the Association for Geographical Information,
OS and a private sector representative. Is the current panel's
membership sufficiently balanced with three private sector representatives
among its 12 members?
4.1 The Department considers that the Panel's
membership is sufficiently balanced. The composition was considered
carefully in the light of the Select Committee's recommendations—the
larger membership reflects the need to adequately reflect the
diverse nature of the British geographic information industry.
The Panel reviews its representation to ensure that it has experience
of the current key issues.
4.2 Panel members represent a broad view
of the geographic information industry. The Department considers
that four of the thirteen members have a specific remit to represent
the private sector. These are Association for Geographic Information,
Association of British Insurers, Royal Institution of Chartered
Surveyors and the Demographic User Group. We estimate that between
them they represent over 700 private sector companies.
Q5 In the memorandum to the Committee during
its recent inquiry into DCLG's Annual Report 2006, The Government
said that the ending of NIMSA means "there is no distinction
for OS between public service and commercial activities".
If that is the case, should the head of a commercially active
organisation continue, ex officio, to be official advisor to Ministers
on "all aspects of survey, mapping and geographic information"?
5.1 Ordnance Survey is the national mapping
agency for Great Britain. As such, its Director-General and Chief
Executive has long been official advisor to Ministers, and the
Department considers this to be entirely appropriate. Advice requested
and provided is focused on survey, mapping and geographic information
(GI), and primarily advice on short-term issues. However, Government
may at any time request advice on particular issues from other
interested parties.
5.2 The response that with the ending of
the National Interest Mapping Services Agreement (NIMSA) there
is no distinction between public service and commercial activity
for Ordnance Survey, was to make the point that Ordnance Survey's
activities are now directed towards providing data and services
to public and private sector organisations and individuals under
licence. The public sector makes extensive use of Ordnance Survey
data.
NATIONAL INTEREST
MAPPING SERVICES
AGREEMENT (NIMSA)
Q6 What impact will the ending of NIMSA have
on OS' own structures, financing, turnover and dividend?
6.1 NIMSA, established as a seven-year agreement
in 1999 when Ordnance Survey became a Trading Fund, has contributed
to the costs of an agreed list of mapping activities required
in the national interest, which would not otherwise have been
provided if the decision were made on a purely commercial basis.
6.2 A large proportion of NIMSA funded a
single major programme—Positional Accuracy Improvement (PAI)—that
resulted in an improved standard of absolute accuracy of mapping
data for rural areas. This programme was successfully completed
in 2006, coincident with the end of NIMSA. Much of the remainder
of NIMSA supported a cyclical programme of data maintenance and
capture for rural areas.
6.3 The annual value of NIMSA reduced over
the period of the agreement. In 2006-07 it amounted to £0.96
million, less than 1% of Ordnance Survey's annual turnover. The
impact of the ending of NIMSA has been factored into Ordnance
Survey's Corporate Plan. In accordance with Treasury guidelines,
and as specified in the Ordnance Survey Framework Document, the
Plan is not published.
6.4 With the ending of NIMSA, Ordnance Survey
has reviewed its planned activity, particularly on cyclical data
revision. This review has also considered opportunities presented
by advances in technology, changes in approach and methodologies,
and the relative priorities of different geographies.
6.5 Ordnance Survey now believes that it
will be able to continue to provide a comparable level of support
to mapping rural geography as achieved under NIMSA by adopting
a new approach as outlined below (see answer to Q7). It estimates
that this will lead to additional annual costs for Ordnance Survey
of up to £1million.
Q7 What impact will the ending of NIMSA have
on rural mapping?
7.1 Ordnance Survey has reviewed its rural
revision policy in the light of the altered funding arrangements,
evolving customer needs, and opportunities presented by new processes
and technology which have improved Ordnance Survey's capability
and efficiency in maintaining its databases. A new approach is
close to being finalised which it believes will maintain the currency
and content of the rural geography within Ordnance Survey's products,
at some additional cost but not one that is disproportionate to
the benefit that will be gained by the nation.
7.2 Under the new policy all primary features,
such as residential, industrial or transport infrastructure developments,
will continue to be surveyed within six months of completion.
A varying two to 10-year national programme of cyclic rural revision
will maintain all secondary features. All areas of Great Britain
will be revised in a more integrated programme. The most populated
or most rapidly changing areas will be revised more frequently
than previously, with the most remote areas still being revised
at least once every 10 years. Revision intervals may vary according
to patterns of known change and customer need.
7.3 As noted above (see answer to Q6) the
major Positional Accuracy Improvement Programme was complete when
NIMSA ended.
Q8 Will the procurement of necessary services
be more expensive for local authorities now that OS is not providing
them under NIMSA?
8.1 The cost of Ordnance Survey products
was not directly affected by the existence of the NIMSA. NIMSA
funding enabled investment in maintaining the consistency of currency,
content and specification of the mapping to agreed levels, which
would not otherwise have been provided if the decision was made
on a purely commercial basis. All users benefited from these
investments in the products.
8.2 Ordnance Survey assumes that, as in
the case of the current Mapping Services Agreement (MSA), local
government will invite bids for the provision of mapping information
and services under a competitive tender. It is reasonable to assume
that Ordnance Survey would be a bidder in such a tender process
in the normal course of events. The current MSA does not expire
until 31 March 2009. Until an Invitation to Tender is issued,
with specifications for data and services, it would be premature
(and potentially anti-competitive) to comment on likely pricing
implications for Ordnance Survey.
COMPETITION
Q9 Some OS competitors allege it is able to
use its position as public sector information holder to compete
unfairly, either by imposing over-stringent and costly licence
conditions or by developing products of its own in direct competition
with theirs but without the associated information licensing costs.
There are further complaints that OS is an effective monopoly,
preventing fair and transparent competition in the geographical
information market. What is your view of these suggestions?
9.1 Collecting, maintaining and disseminating
the data that goes into Ordnance Survey's databases is a costly
undertaking. Ordnance Survey was granted Trading Fund status in
order that the cost of doing so was placed upon users of the data
rather than on taxpayers. The OFT CUPI study highlighted ways
in which public sector information holders generally could provide
easier and earlier access to data to re-users of such data in
order to benefit the UK economy. Ordnance Survey and the Department
have taken the CUPI study recommendations very seriously, and
Ordnance Survey continues to engage with OFT to develop an acceptable
solution to the concerns raised, including working to resolve
some differences about the factual basis of some specific findings.
It was agreed that the definition of Ordnance Survey's public
task should be revised to further clarify its boundaries (see
answer to Q1). Ordnance Survey is of course also subject to competition
law in the same way as any other business trading within the UK.
9.2 Ordnance Survey actively encourages
the use of its data by third parties"—Licensed Partners"—to
produce products or services that it does not produce itself.
It has created a series of "Specific Use Contracts"
that set out the terms and conditions on which it would licence
the use of its data for different types of end use. Amongst other
benefits, this enables data to be priced according to the market
perception of value for each end use. The Department and Ordnance
Survey believe that these should be as straightforward as possible,
and Ordnance Survey is currently considering how best to reduce
their complexity.
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