Joint memorandum submitted by UKspace,
Intellect and A/D/S (UKSA 02)
1. RESPONSE BY
UKSPACE, INTELLECT
AND A½D½S
This response is made by UKspace the trade association
of the UK space industry. UKspace is jointly sponsored by and
works in close cooperation with both Intellect and A/D/S. This
submission represents the views of all three trade bodies.
The UK's space sector supports 70,000 jobs, employs
the most highly skilled workforce in UK manufacturing, and is
one of the highest value adding and fastest growing sectors in
the UK. The role and mission of UKspace is to grow the UK's share
of the global space market, by promoting the best commercial,
political and public environment for the UK space industry; promote
greater awareness of space as one of the UK's most innovative,
high skilled, value-adding sectors and to provide the primary
forum for industry to dialogue with Government and other stakeholders.
Intellect is the UK trade association for the technology
industry which comprises the information and communications technologies
(ICT), electronics manufacturing and design and consumer electronics
(CE) sectors, including defence and space-related IT. It comprises
some 780 SME and multinational member companies with interests
in these sectors. The industries that Intellect represents contribute
at least 10% of the UK's GDP, employ approximately 5 million people
and contribute £120 billion to the UK economy.
A½D½S is the trade organisation advancing
UK Aerospace, Defence, Space and Security industries. Farnborough
International Limited (FIL), which runs the Airshow, is a wholly-owned
subsidiary. A½D½S is the national organisation representing
the huge number of successful SMEs in these sectors. A½D½S
was formed from the merger of the Association of Police and Public
Security Suppliers (APPSS), the Defence Manufacturers Association
(DMA) and the Society of British Aerospace Companies (SBAC) in
October 2009. Together with its regional partners, A½D½S
represents over 2,600 companies.
2. INTRODUCTION
Space is a high growth, knowledge intensive,
high tech sector in which the UK has an enviable record. Our share
of the world market is roughly double our GDP share, and has the
potential for significant growth. Our space and environmental
scientists are second only to those of the USA in terms of influence.
Our space industry is competitive, export-oriented and innovative.
Space has grown more than three times faster than the economy
as a whole during the past decade.
Moreover space is an intrinsic part of everyday life
and one of the key enablers of the global economy, as well as
being an essential component of our security infrastructure. Our
weather forecasts rely on satellites. Millions of households rely
on satellites for their TV and even those that don't, watch TV
programs that rely on satellites for their production such as
sports events and news, and the distribution of programmes to
the terrestrial network. Mobile phones and cars contain satellite
navigation devices that many have come to depend on. Police, ambulance,
fire, coast guard, the security services and the military need
satellites to perform their jobs effectively and efficiently.
Recognising the importance of space to the UK,
and following a public consultation, the Space Agency started
life in April this year and is in the process of establishing
itself as an effective entity. As of today, the Agency still looks
to the outside like the old BNSC, but this is not too surprising
given the short time since the decision was taken and given the
disruption of the General Election and change in government, and
then being plunged straight into a comprehensive spending review.
This evidence therefore focuses more on the deficiencies with
the old BNSC and the aspirations industry has for the new Agency
once fully up and running.
The final section addresses the specific questions
raised by the Select Committee.
3. DEFICIENCIES
WITH THE
OLD BNSC
The remit, governance, management and resourcing
of BNSC failed to raise the profile of space (meaning the importance
of space to our daily lives, as a critical national infrastructure,
as a wealth creating industry, as an economic enabler, as a critical
provider of scientific understanding ...) within government or
the wider public. BNSC was not well known across wider government
and the public perception is still that other nations do space
and not UK.
The former structure was unable to provide coherent
national leadership in space, as UK representation on specific
international/European programmes was spread around "user
departments" who had a necessarily narrower perspective based
on their particular user angle (eg DEFRA for GMES, DfT for Galileo,
STFC for ExoMars ...). In the case of GMES and Galileo as European
programmes under joint management from the EU and ESA, this has
led to UK being entirely reactive with no clear and joined-up
policy towards both stakeholders from the start, thus allowing
other nations to always be in the driving seat. For both programmes
there have been periods when it was not clear if the UK was in
or out, with severe implications for the UK's industrial interests.
In the case of the Telecoms sector, there was no government "user"
within the old structure to effectively champion this successful
commercial sector.
Due to the "federal approach" to managing
space in the UK there has been a lack of overall strategic direction
and joining-up across programmes and domains (eg civil space,
security and defence interests); BNSC was neither empowered, nor
did it have the delegated budgets, or resources, to be able to
deliver a UK space strategy. Almost by definition, the former
approach ensured that UK never initiated a European programme
but simply found itself in the position of follower having to
take a view on the merits and then, if positively disposed, trying
to fight for an appropriate role for its industry and to ensure
the system requirements meet UK needs. This included the inability
to establish a coherent technology strategy and associated funding
process, which has led to the erosion and narrowing of UK offerings—which
contributes strongly to this "follower" position, and
the consequent under-return.
Since the UK's "space budget" traditionally
comprised the pooling of budgets from across "user departments",
this exacerbated the lack of strategic focus by creating uncertainty
over long-term budgets and forcing BNSC into constant round-robin
negotiations with user departments in an attempt to stitch funding
together for cross-cutting programmes ahead of ESA and EU level
decision points.
By design, a "user led" approach to
space put user needs to the fore in defining UK space policy.
Whilst user needs rightly occupy first place, this should not
be to the exclusion of all else. There are often wider national
interests to be considered, that should include other public interest
needs, wider economic benefits and industrial priorities. There
are many examples of "user departments" stating clearly
that industrial consequences are not their responsibility, but
"someone else's". Examples include the Met Office on
programmes such as MSG and MTG where their user needs are/will
be fully met, even if the satellites have no UK industrial work-share,
as well as DEFRA and DfT with regard to the GMES and Galileo programmes
already referred to above. In addition, there is no real focus
in these departments on the technologies and operational aspects
that are required to be developed to deliver the user needs. Without
a stronger and more empowered Space leadership, there was no means
to properly align strategies with user needs. For some ESA programmes
(eg ARTES), industry is the "user", investing substantial
sums representing up to one third of the total UK funding of ESA.
Despite this, industry was not represented within the former governance
structure.
Industry believes that BNSC was too narrowly
"science focused" around the priorities of the Research
Councils and had insufficient focus on the major other areas of
UK space interest, namely security, defence and commercial space.
Additionally, BNSC had limited mandate towards economic growth
and industrial support, including exports.
The 2008 reorganisation of space co-ordination,
including the move of BNSC to Swindon, the further fragmentation
of responsibilities between TSB and BNSC and the loss of key competencies
and the general reduction in staff numbers, led to an all-time
low point in influence and standing. The advisory board structure
all but stopped, the Space Advisory Council has not met for about
two years and the working of the UK Space Board has lacked transparency
and visibility.
Given the broad reach of space across many user
domains and given its inherently international context, it was
clear that the former management structure was not able to bring
to bear the necessary broad range of skills and competencies to
manage all aspects, for example, positioning the UK in European
programmes, frequency spectrum management, orbital slot allocation,
The Outer Space Act, international MOUs and export promotion,
etc.
On the positive side, the user-led focus of
the BNSC partnership model has ensured UK space endeavours are
pragmatic and "feet on the ground", avoiding space for
the sake of space or involvement in prestige programmes.
Where a European space programme falls neatly
into the remit of a single UK "user department"—for
example STFC is wholly responsible for Planetary Exploration—then
the UK system works reasonably well. For example on the ESA ExoMars
programme, the UK has chosen where to focus, has taken a view
on academia and industry needs and has negotiated forcefully in
Europe.
4. THE CHALLENGES
The UK Space Agency has been created to pull
together all of the UK civil (as opposed to commercial and military)
space activities. Pulling together the activities of different
Departments is both the raison d'etre of the Agency and
its greatest challenge. The objective is to deliver the maximum
possible societal and economic benefits to the country. The Agency
is intended to accomplish this by making the whole exceed the
sum of the parts, but governments have found this consistently
difficult to achieve. Let's look first at the challenges within
government, then outside government but still within the UK, and
then internationally.
The UK's "space budget" comprises a pooling
of budgets from across "user departments" including
Departments such as DEFRA, DfT and MoD (Met Office), and bodies
such as STFC, NERC and TSB. This ensures that user needs of each
body rightly occupy first place, but this has tended to (but should
not) be to the exclusion of all else, and it fails to accommodate
user groups that span more than one government Department or body.
Priorities are set within each Department and take little account
of those in other Departments. Thus a programme that is second
priority in three Departments would always fail to win approval
even though in aggregate it might be the highest priority—many
space applications projects fall into this category. "Silos"
inside a Department are also a stumbling block, for example on
the subject of radio spectrum policy between the telecommunications
and space[3]
sectoral units of BIS.
There are often wider national interests to
be considered, that include other public interest needs, wider
economic benefits, industrial priorities and the economies of
scale central to the "whole greater than the sum of the parts"
philosophy. Examples where societal benefits have suffered include
the UK's stop/start policy towards the GMES[4]
programme, with Prime Ministerial priorities on climate and global
change lost in the narrow target culture of the lead Department.
Examples where industrial interests have suffered include weather
satellite programmes such as MSG and MTG[5]
where short-term user Department objectives are met, but UK industry
is effectively excluded from most of the work with long term loss
of wealth creation. Examples where economies of scale are missed
include the potential technology synergy (for example in software)
between the Galileo positioning system led by DfT, the ExoMars
exploration mission led by STFC and the GMES environmental programme
led by DEFRA. Britain's official priorities in each of these three
programmes not only made no reference to that potential synergy
but effectively worked against it.
The relationship with industry is particularly
complex. UK industry supplies a significant part of the funding
of European Space Agency (ESA) programmes—close to a third
of the cost of the programmes in which Britain participated in
2009, for example. Yet industry has no formal means of influencing
Britain's policy towards ESA, whereas the other funding contributors
(DEFRA, DfT, research councils, TSB, MoD, etc.) have formal roles
in the definition and implementation of Britain's investments
in ESA. More generally, industry's role as the mechanism for wealth
creation is not recognised in the governance of the sector.
Internationally, UK has only punched close to
its weight where a programme falls within the responsibility of
a single UK Departmental unit or agency. Almost by design, the
siloed approach ensured that the UK never initiated a European
programme but was always reactive, retrospectively trying to ensure
that the system requirements met UK needs and that UK industry
was not blocked from appropriate roles.
Europe has become a particular problem now that
the European Union has become active in space. Until the late
1990s, the European Space Agency was the European-level space
organisation, and the political implications took second place
to the science, technology and commerce. The European Commission
now has authority to commit the Union to major space programmes
and the challenge is to ensure that Britain extracts maximum value
for its investment. The involvement of Brussels brings the addition
of the FCO to the list of government Departments that have to
take space decisions. Furthermore, some EU countries such as France
and Italy treat space as a topic for Prime Ministerial debate,
requiring all EU Prime Ministers to take a view. The over-escalation
of space to that level can lead to arbitrary decisions as for
example when Germany and Italy delayed the Galileo satellite navigation
programme for 15 months while their Heads of Government postured
as to whose industry would take the lead—an issue that could
have been resolved rapidly if the political temperature had not
been raised so high.
5. THE SOLUTIONS
Changes were urgently required to the previous
arrangements to ensure a UK strategic approach to space is adopted
that joins together civil, security, defence and industrial policy
needs and takes decisions in support of the overall national interest,
and to ensure a maximum return on overall space investment. "National
interest" considerations should include public user needs
(but not exclusively those needs of the designated "user
department"), sovereignty issues, innovation and wealth creation
opportunities, industrial impacts, macro economic considerations
and security/defence needs.
Recognising that space technologies as well as UK
industrial capabilities are intrinsically "dual use"
and rarely differentiate between civil, defence and security,
it is essential that the Agency takes account of national needs
and interests across all three strands so that mutual benefits
are realised across domains and that, therefore, close relations
are established between the Agency and MoD/Home Office and security
agencies.
In order to elaborate a sustainable space strategy,
it is essential that the Agency is able to bring together the
needs of the civil space, security and defence communities, as
well as considering overall economic impact and ROI. An empowered
organisation has the potential to deliver improved value for money
and return on investment by shaping coherent policies across government
and delivering against a long-term strategic plan. A "dotted
line" into Cabinet Office may be necessary to give the Agency
the necessary authority to develop a top-level national space
policy.
In order to deliver on the long-term policy
objectives it is essential that the Agency is given the necessary
empowerment, delegated budgets and resources. Its remit should
be "end to end", from defining a vision and strategy
for the UK by shaping Government policy, to assisting industry
innovation, to stimulating underpinning academic research, and
to inspiring the next generation of scientists and engineers.
The strategy for the UK must be prepared with and delivered in
conjunction with the wealth creating private sector.
By having a pan-government strategic plan for
space, UK has the opportunity to become proactive in space, to
propose programmes of public good and to take a lead in Europe
rather than to remain reactive to programmes originating around
Europe. In particular, where UK has a strong policy commitment
or objective, such as Climate Change or on financial delivery
models (eg PPP/PFI), then there is the opportunity to lead Europe
in these areas.
Given the challenge of driving forward a multi-Department
programme, of managing the complex relationship across government
and with industry, and of delivering both nationally and internationally,
the UK Space Agency's success requires it to:
1. have authority to ensure that "space"
is included in the appropriate policies of all government departments,
agencies and bodies;
2. have adequate cross-Department influence on
decisions such as procurement policies, regulation, and committing
to and managing international programmes, with the necessary empowerment,
delegated budgets and resources, and reinforced by for example
a "dotted-line" into the Cabinet Office, and a Chief
Executive reporting into government at both Ministerial and Permanent
Secretary levels;
3. report into a Space Board of representative
stakeholders, including from business and industry, with the CEO
and Board chairman selected through an open and transparent process;
4. be empowered to implement a comprehensive
national space strategy approved by the Board and covering the
commercial, civil, defence and security strands of space;
5. have access to adequate discretionary funds,
including to take advantage of opportunities or urgent operational,
humanitarian or public interest actions to protect the UK way
of life and/or which don't fall under the responsibility of a
single stakeholder;
6. have the authority to prioritise return on
investment in terms of the greatest societal impact and wealth
creation potential, with Government and the wealth creating industries
working in partnership to create the best overall impact, including
working with academia to accelerate the exploitation of scientific
research and innovation coming from our universities;
7. have the necessary authority and competence,
as well as the financial and man-power resources, to deliver the
Board's strategy (note that industry has offered to supply
staff to the Agency to assist it reaching a "critical mass"
in terms of technical, procurement and other competencies)
including appropriate skills and authority to manage government
procurement of space assets on behalf of user departments;
8. have a budget for a national space programme,
jointly with industry, to address national policy objectives,
ensure we maximise our return from EU programmes, secure lead
roles in international collaborative programmes, strengthen global
competiveness (exports) and retain intellectual property ownership
for the UK;
9. be able to support exports and where appropriate
act as the "home customer" where there is not an obvious
single stakeholder/user identified;
10. have the ability to act as aggregator for
government requirements for example to issue CPA's (Common Purchasing
Agreements) on government's behalf, and to take risks such as
negotiating the purchase of capacity (bandwidth, images, etc.)
on a partially speculative basis assisted by private sector bodies
as required;
11. underpin innovative wealth creation by targeted
infrastructure procurement or other targeted government action
that allows industry to invest in infrastructure with government
for example as anchor tenant, bank guarantor and/or licensing/regulating
authority; and
12. continue a stable level of investment in
underpinning R&D not only through co-funded R&D programmes
such as the ESA ARTES programme, but also through a national space
programme, where national interests can be more tightly targeted.
6. THE BENEFITS
The recent Innovation and Growth Strategy (IGS)
task force[6]
concluded that if the UK Space Agency were given proper authority
and resources it could be a major factor in enabling the space
sector to grow six fold and create at least 100,000 new jobs in
the UK by 2030. And these jobs would be at the cutting edge of
technology, helping to ensure that Britain remains a leading player
in the high tech world of the 21st century. Space is a key part
of our everyday lives. It will ensure universal access to broadband
in the UK. It will make transport quicker and greener, will be
a major tool in reducing our carbon needs and will monitor and
verify climate change for the health of our planet.
A successful UK Space Agency will ensure that satellites
make the UK resilient to communication breakdown, and that Britain
plays a full part in space-based security initiatives. Schools
and universities will use space as an example to inspire new engineers.
The Agency will be a critical partner in ensuring that UK is the
leading nation in the development and exploitation of space-enabled
services.
7. SPECIFIC QUESTIONS
RAISED BY
THE SELECT
COMMITTEE
1. What progress has been made in setting
up the UK Space Agency?
From the outside, the Agency still looks to
all intents and purposes like BNSC, with the same small team,
the same budgets and the same operational constraints. Industry
is aware of a lot of activity beneath the surface, in establishing
budgets, negotiating service-level agreements with user departments
and "bidding" into the CSR process. However, this process
is opaque and it is not clear to industry what will be the final
remit of the Agency with respect to the former BNSC "partners"
and whether indeed it will lead on, and fund, all aspects of civil
space. The CSR outcome will be THE principle success factor in
determining if the Agency is able to deliver the vision as set
out above. Alongside budget, the mission and remit or the Agency
together with the quality, skills and quantity of its people will
determine whether or not it succeeds in delivering economic growth
and value for UK tax payers, and these factors must be addressed
during the remainder of this year, before the Agency becomes fully
operational.
There was an expectation from the industry side that
by now there would have been an organisation chart published and
a recruitment process started for the chief executive and senior
directors. A continuing issue of concern from the industry perspective
is the apparent lack of engagement between the formative Agency
and government departments leading on defence and security (MoD,
Home Office ...). Additionally, in accepting recommendations from
the Space IGS report, industry has offered up to ten secondees
to the Agency to complement the existing team and to fill any
specific gaps in expertise. Three staff are already seconded into
the Agency from industry and we are keen to expand and continue
this process speedily.
2. How does the UK Space Agency work with
other bodies (national and international) on space issues?
The Agency is THE responsible body for all national
and international CIVIL space matters. As expressed above, the
remit of the Agency in defence and security matters and its relationship
with other government departments in these domains is not yet
clear to industry. To achieve the economies of scale and to maximise
overall return on space investment, it is essential that all government
space spending, including in security and defence, is harmonised.
3. Is the UK Space Agency more effective
at coordinating space policy than its predecessor, the British
National Space Centre?
Not yet, but it has the potential to radically improve
the UK's engagement in space and to deliver the 20 year vision
as set out in the Space IGS report. The CSR outcome and the next
six months are critical in establishing an empowered Space Agency
able to "hit the ground running" from April 2011, with
adequate authority, budget and resources and a clear mission and
remit to deliver the Space IGS 2030 vision. Therefore the critical
activities to be carried out over the next six months are to get
the mission and remit clear, getting the budgets in place, getting
the new team established and getting the right links established
across government and other key stakeholders, including industry.
Its key focus must be on wealth creation and maximum societal
benefit.
4. What should the UK Space Agency's priorities
be for the next five years?
Promotion of short and medium term economic growth
should be at the top of the Agency's agenda. The Agency priorities
should all derive from its core aims around societal impact and
economic growth and be in accordance with the IGS Recommendations.
Societal impact includes global challenges such as climate change
and security, as well as more down-to-earth issues such as assuring
universal access to the internet for rural communities. Specific
priorities include:
— Developing a National Space Policy supportive
of the IGT growth agenda.
— Jointly with industry and academia, establishing
and funding a national space technology and applications strategy,
including system studies and concept demonstrators.
— Improving access to capital for privately
financed space projects.
— Procurement of an indigenous, sovereign
earth observation service, aggregating all government user needs.
— Establishing world leadership in technologies
and commercial services related to climate change validation,
adaption and mitigation.
— Capitalising on the characteristics of
satellites to complement other fixed line and wireless technologies
to deliver internet and media, and reduce carbon emissions, including
by continuing to invest in co-funded R&D in the successful
Telecoms sector.
— Support the Strategic Defence & Security
Review (SDSR) on space matters.
— Utilise space to inspire our next generation
of scientists and engineers and encourage the take-up of STEM
subjects.
— Gradually increasing our space spending
and engagement in ESA/EU programmes as the economy recovers—in
particular, very strong engagement with EU is required as they
increase their own space activities, to influence to UK advantage
and to ensure good return to UK based industry.
— Support the Harwell "hub and spoke"
International Space Innovation Centre (ISIC).
— Vigorously pursue reform of regulations
that are or will inhibit private sector investment in space infrastructure.
This includes, for example:
— changes to the Outer Space Act (eg streamlining
licence processes, third party liability reduction);
— ensuring UK satellite ITU filing management
policy as well as UK and international spectrum allocation policy
and pricing do not prejudice the development of satellite systems
and services and promote the needs of the UK satellite industry
as proposed in the IGT recommendations; and
— the removal of any planning restrictions
that discriminate specifically against the siting of satellite
antennas.
5. Is the UK Space Agency adequately funded?
Until the CSR outcome is known, we do not know
the answer to this. Although the focus of the IGS Recommendations
are on regulatory reform, more proactive support to the industry
and on smarter ways of procuring space systems, you cannot escape
the fact that UK spends far less on space than our European competitors
and the fast expanding BRIC economies. To improve our competitiveness
against these other countries and grow our industries, we must
both be smarter and also raise our game by investing more in space
as the economy recovers. The UK currently lies in 22nd place in
terms of space investment as a proportion of GDP, behind nations
such as Finland, Austria, Denmark, Luxembourg and Korea. In absolute
terms the UK lies in 9th place, spending only one third that of
Italy, one sixth that of Germany and one eighth that of France.
UKspace, Intellect and A/D/S
August 2010
3 The British National Space Centre was the space sectoral
unit of BIS. Back
4
GMES: Global Monitoring for Environment and Security; a joint
programme of the European Union and the European Space Agency. Back
5
MSG: Meteosat Second Generation; MTG: Meteosat Third Generation;
both are joint programmes of Eumetsat and the European Space Agency. Back
6
The report of the Space IGS is accessible at http://www.spaceigs.co.uk/ Back
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