UK Space Agency

Memorandum submitted by

Surrey Satellite Technology Ltd (UKSA 21)

Executive Summary

1. Progress has been made but SSTL is concerned with the pace and the extent of the changes and the lack of communication of UKSA activities.

Introduction

2. Surrey Satellite Technology Ltd (SSTL) is a manufacturer and operator of small satellites. Growing out of academic research at the University of Surrey the company was formed in 1985 and became a pioneer in the provision of low-cost small-satellites. In late 2008 the University sold the majority of its stake in SSTL to the European aerospace company, EADS, providing probably the largest ever cash injections to a University in the UK from the sale of a spin-off company. Following this sale, SSTL operates autonomously within the EADS Astrium organisation. SSTL has a healthy and growing business and signed its largest ever contract (c.£200m) earlier this year for the provision of 14 navigation payloads for the Galileo

programme.

3. The following evidence below draws on the response submitted by SSTL to the government consultation on the establishment of a UK space agency in 2009, which we attach as Annex A.

Q1. What progress has been made in setting up the UK Space Agency?

4. SSTL’s 2009 submission was very supportive of the establishment of the agency and we were pleased that (a) the previous government initiated the process of the creation of the agency and (b) the new government also appears to support the agency.

5. Industry is not getting adequate feedback on the changes being made through the transition of BNSC to Agency status nor details of the plans for the future.

6. In terms of the operations of the agency we perceive that very little has changed since the

establishment of UKSA from BNSC in April. In terms of the resources available to the agency we are concerned that UKSA is as under-resourced as the BNSC was (see answer to Q5) and this will inevitably impact its ability to be effective during this transition period when it must combine its usual activities with additional activities related to the transition and to the actions arising out of the innovation & growth strategy (IGS 1 ). Note that SSTL has seconded one of its staff to STFC for activities at the International Space Innovation Centre (ISIC) at Harwell, which includes some time working for the agency. Without such secondments from SSTL and other companies the resourcing issues would be even worse.

7. We note the creation of the National Space Technology Steering Group but have concerns about the small and narrowly focused industrial participation in that group.

8. We feel that UKSA needs to significantly raise its profile and gain the respect of its peer

agencies around the world. There is a danger of UKSA being seen as an ineffectual, rebadged,

BNSC. To be an effectual space agency UKSA must have a clear remit, a proper reporting line to Cabinet and a meaningful budget with adequate staff.

9. The announcement by the previous minister that a new CEO is to be selected creates the

opportunity for a high profile figure to be recruited – in our opinion the agency needs such a

person in order to be effective in its relations with government, industry, the media and with

global partners.

Q2. How does the UK Space Agency work with other bodies (national and international) on space issues?

10. We are pleased that UKSA is more willing to enter into government-to-government MoUs than was the case with BNSC. We see little evidence of other changes in its relationship with other bodies.

11. We are unsighted as to what role the previous BNSC partners (both departments and research councils) will have in space activities once the transition to the full agency is complete.

Q3. Is the UK Space Agency more effective at coordinating space policy than its predecessor, the British National Space Centre?

12. The ability to better co-ordinate space policy was one of the key points we made in the 2009 submission. We highlighted two key issues: (a) the failing of the partnership model in providing adequate funds in the early phases of new programmes – especially when these were of interest to several government departments and (b) the need for a "space champion" in government to proactively promote the benefits of space-based applications to real-world problems.

13. Our understanding is that to date the funding situation remains largely unchanged until the next government financial year and following the CSR. We hope that the agency will be provided with funding to address the serious problems we raised in 2009 – funding of early phase projects and co-funding (with industry) of technology development (see IGS recommendation 3 concerning the National Space Technology Strategy [NSTS]).

14. We would like to note the support in this regard from the Technology Strategy Board who not only provide support to UKSA in its dealings with ESA on telecom and navigation but also are prepared to consider provision of grants for small satellite technology proving missions such as UKube-1 and TechDemoSat (see IGS Recommendation 5 Action 5.2 concerning the TechDemoSat).

15. The "space champion" role will be vital for establishing the business case and contractual

framework for the UK sovereign EO capability (IGS recommendation 5 Actions). Requirements need to be gathered from across government and UKSA is best placed to do this.

16. The "space champion" role will also be vital for making sure that cross-government UK interests are aligned when dealing with opportunities overseas. Active co-ordination is needed to align the interests of BIS/UKTI, FCO, MoD and DfID.

Q4. What should the UK Space Agency’s priorities be for the next five years?

17. The first priority must be to implement the actions of the IGS. In addition there should be a priority to improve its support to UK industry – in particular in dealings with foreign governments that establish the framework in which industrial contracts can be executed e.g.

many contracts for provision of major elements of space missions require government-to government agreements such as MoU to be signed.

Q5. Is the UK Space Agency adequately funded?

18. BNSC was sorely lacking in funding both for its own activities and for funds for national space activities (this was identified in our 2009 submission as the key issue – see response to Q1 in that submission in Annex A).

19. It appears to SSTL that to date this situation has not improved. In particular during this very busy year for the new agency it seems to have alarmingly few staff able to work on the IGS actions. It is unclear whether ex-"partner departments" and research councils have offered any staff to UKSA for this transition period. Given the nature of the IGS actions their input would be valuable e.g. IGS recommendation 5 concerning the sovereign EO capability surely needs significant input from MoD, BIS, NERC, DEFRA and DfID.

Surrey Satellite Technology Ltd

August 2010

Annex A

Submission of 13/10/2009 by SSTL-UK

Department for Business Innovation & Skills (BIS) Consultation on

the funding and management of UK civil space activities 2

Q1. What are the major issues – if any – that in your view limit the ability of BNSC to deliver a successful UK Space programme? Conversely what aspects of the current BNSC structure work effectively? It would be helpful for responses to give evidence based on direct experience of working with BNSC.

The major issue is the fact the BNSC spends nearly all of its funding in ESA and cannot, therefore, control how the money is spent, what it is spent upon and where it is spent. By its very nature, ESA makes implementation decisions by consensus agreement e.g. pan-European science teams effectively choose the missions and this may lead to outcomes that are not in line with UK desires or UK space strategy. In contrast the other large European countries (France, Germany, Italy) all have space agencies and all have national programmes in addition to their membership of ESA. The national programmes bring a host of benefits:

· They enable nations to ‘fill the gaps’ with respect to what ESA does i.e. if ESA is not

addressing a national concern the nation can implement a mission – either unilaterally or multi-laterally (typically bi-laterally) – outside of ESA. Such national missions tend to be smaller and more efficiently implemented outside of ESA. A good example would be the French "Myriade" series of science missions addressing French science priorities.

· They enable nations to develop technologies and gain experience, which they can bring to bear within ESA thus helping to steer ESA towards the direction they wish to pursue. Not only does the UK have no national space programme but it also has no national space technology programme despite this being announced in the 2007 space strategy where it was stated that this programme, would "Bring better co-ordination to existing national efforts and establish a suitably funded National Space Technology Programme (NSTP) and establish two new technology capabilities per year" and "Deliver proof-of-concept outcomes leading to commercially financed exploitation projects by 2012" .

In summary we believe that, irrespective of the government level of funding of space, the balance is wrong between nationally funded activities and activities funded through ESA.

Conversely, the BNSC has had some major successes by running national programmes in the past – particularly through the MOSAIC programme, which ran from 2000 to 2005 – see Annex 1. In addition, previously the BNSC ran the Advanced Technology Systems (ATS) programme that enabled UK industry to develop technologies for both commercial and European institutional missions. This has lead to the underpinning of export sales in commercial market. Such programmes no longer exist.

In terms of the total level of government funding of space we would suggest this is too low at present – UK is well behind the other large European countries and UK seems to find it difficult to fund programmes even where there is a strong UK interest e.g. GMES – where future missions such as Sentinel 5 Precursor are addressing global monitoring related to climate change and pollution etc.. This difficulty in funding missions can partly be traced to the fact that BNSC is a partnership without any budget of its own to use in the early phases of new programmes when the major tradeoffs are being performed. Funding difficulties also arise due to the classical problem of an interest being spread across several departments. Unfortunately, BNSC controls neither the direction nor spending in the other departments and thus no overarching strategy across government departments has been developed. This has led to situations for instance in the EUMETSAT programmes, where the UK funds, through EUMETSAT via the Met Office, the delivery of meteorological space missions but where UK industry is not able to participate in these programmes since the UK does not support the initial development performed through the ESA. A similar situation exists in the GMES programme where significant EU funding is provided by the UK but not matched by funding into the ESA development programmes.

Q2. Compared to the current partnership, is there a case for considering different institutional arrangements for funding and managing UK civil space activities? What possible alternative models might the Government consider, and what are the potential benefits and disadvantages of these models?

As mentioned in the response to Q1 the UK approaches funding for space very differently to the other ESA member states, with comparable economies, and also to many of the other leading G20 nations, many of which have space agencies that are largely centrally funded. If the UK is serious about using space it should consider as a minimum a two-tier funding mechanism for the UK Space Agency:

· The basic infrastructure (ESA mandatory programme, Explorer Missions, Operational

Programme Development, National Space Technology Programme, National Application Demonstration Activities and the UK Agency’s internal activities) should be funded directly through the UK Agency with a stable budget so that activities spanning several years can be managed.

· Other activities additional to the basic activities could be funded either by the UK Agency itself or from user departments once the technology is proven and the user department is prepared to fund an operational system. This is analogous to the European situation with weather satellites – the R&D phase of a new mission is funded through ESA with the first satellite of the new type being the output of that process. Additional (operational) satellites are then procured directly by EUMETSAT which is funded by the user departments (in the case of the UK this is the Met Office).

The failing of the current partnership model is mainly due to the fact that user departments are asked to take a lead too soon – in the R&D phase before they are sure of the benefit of the space system. Where the interest is spread across several departments, the present system discourages individual departments to express an interest in a new mission for fear that they might be expected to fund it. This situation arose in the GMES programme – the benefits accrue across many departments (Defra, NERC, DfID, MoD, BIS) and can only truly be assessed at a level above these departments - an agency with a clear strategy and funding could have resolved the problems. An agency could federate the requirements from civil, security and military users, consider the economic benefits and make the overall case for long term involvement whilst maintaining UK influence in the early phases of the programme when the system is being "shaped".

Another issue is the fact that the current arrangements leave us without a "space champion" in the government – one of the roles of BNSC should be to promote the benefits of a space approach to the other user departments – as far as we have visibility the current BNSC does not do this – it is a rather re-active organisation and does not appear to pro-actively generate interest in new space initiatives.

Introduction to Q3-Q13 To strengthen the analysis, your views on the pros and cons of the potential alternative structures versus the current partnership would be welcomed on any or all of the following issues:

Q3. Maintaining and developing a UK space capability in industry and academia to meet UK needs, including our international commitments

The present arrangements are workable for the science users in academia – representatives of NERC and STFC sit on the ESA programme boards where the programme decisions are made. As a direct consequence the arrangements don’t work so well for the engineering groups in academia and for industry in general – the UK position is generally driven by science goals almost completely ignoring industrial and engineering benefits of programmes. This manifests itself in the situation where UK wants to build ‘ science instruments’ and expects a free ride into space for these ‘instruments’ on satellites built by other nations. This is not sustainable in the long term – the UK should be prepared to pay a fair share of the engineering necessary to place the ‘instrument’ in space.

Q4. Playing an effective role in defining future European and global projects

As mentioned above the present arrangements allow the UK to play an effective role vis-à-vis science instruments but completely fail in allowing UK to play an ‘all round’ role at the mission level. The effect of this is that (a) UK does not play a major or leading role in most non-science programmes, such as GMES and Meteosat and (b) even within science programmes UK will lose long term influence if it is seen as only an instrument provider.

The present arrangements make it very difficult for the UK to play an effective role in global projects – the majority of the current funding is given to ESA and very little is retained for national, bilateral or multilateral activities. This represents a missed opportunity for the UK – we must, regularly, turn down opportunities to work with other major space faring nations such as the US and the new emerging nations such as India & China.

Q5. Enabling the views of the research communities in Environmental and Space Science, and the wider user communities, to be taken into account in decision making on new projects/programmes, thus maintaining a user-driven approach

The present arrangements are purely "user driven" so are good in that respect. The benefits of the user driven approach could be maintained in an agency arrangement through the governance structures – the user departments could provide inputs to policy and strategy and also play a role in the management of the agency.

Q6. Maintaining the Haldane principle in determining decisions on Space and Environmental science

o pportunities

We see no reason why the Haldane principle, as currently applied, needs to be modified. In those areas where the science community currently advises, they could still do so. As currently implemented, the Haldane principle only works so far – the scientific decisions in ESA must be applied at European level – the UK science community must try and find consensus agreement with European scientists – they can not decide, unilaterally, on the science that will be performed using their funding. It could be argued that a stronger, more proactive, UK with an underpinning national programme could better influence the science decisions taken at European level as achieved by France, Germany, Italy and the Netherlands.

Q7. Achieving an overall balance across the science, innovation, exploration and operational opportunities for space, and ensure the exploitation of space assets across academia, industry and government

The current arrangements, being mainly science focused, only address a limited set of opportunities. Little scope exists to exploit the commercial markets. In terms of innovation, a major problem facing the UK space industry is how to qualify new, innovative, technologies before they can be used operationally. The UK science and engineering community is very good at the early phases of R&D – Technology Readiness Level (TRL) 1-3 – however there is a technology "death valley" from TRL 4-7 – where the technologies are developed and flight qualified in space before they can be relied upon as part of an operational mission. This problem can be solved through a combination of the national technology programme working in tandem with a series of technology demonstration satellite missions. Such technology demonstration missions could achieve a dual purpose of qualifying new bus and payload equipment and prototyping new space services based on the chosen payload.

Q8. Developing the proposed ESA facility and a coherent and complementary national space centre capability

It’s good that ESA has finally placed a facility in the UK – as the 4 th largest contributor to ESA’s programme it’s long overdue. The ESA facility will mainly develop through the member state contributions to the programmes the centre will be running. The national space capability is more within the UK’s direct control. What the UK should try and do is look for synergies between things that UK does outside of ESA and those inside of ESA – the UK has a lot of capability that could be applied to improve ESA’s performance. An example is the idea of the "cost effective operations centre" – this could be provided by the UK at Harwell - it would allow the UK to lead ESA towards a much more cost-effective way of operating their spacecraft. This could be developed in the context of the Sentinel 5 Precursor programme – ESA has flexibility as to how it performs operations in that particular mission.

Q9. Advising government on space funding in the context of future spending reviews, and tensioning this against other spending priorities

See Q12 .

Q10. Negotiating with government departments and industry to deliver their engagement in space activities

The present arrangements are not very effective in this area vis-à-vis other government

departments. The BNSC does not act as an effective "space champion" (see Q2) - the debacle over GMES in 2005 is a good example – despite this programme attempting to address issues of concern to the UK government such as environmental monitoring and climate change the UK participated at such a low level in the programme that it was effectively ignored by the other member states when the programme was being shaped. Regarding industry, the BNSC does engage but any decisions taken by BNSC generally pay little attention to industrial benefit.

Q11. Promoting UK wealth creation through the effective exploration by UK business of upstream and downstream market opportunities

BNSC does support export initiatives even though it has little dedicated resource to do so. This helps in the initial phases of contact with foreign entities. BNSC doesn’t really have the resource to initiate these activities in a timely manner nor follow through effectively e.g. when other countries want to sign government to government MoU’s – the main issue, again, being resources to support the MoUs.

A more significant concern is the lack of coordination between the UK government departments responsible for industrial, economic and foreign policy areas. Many space export opportunities require political support at the highest levels of government and close cooperation between FCO, DfID and BIS. BNSC is currently unable to provide this level of coordination or commitment and any new structure must be supported by such higher level coordination.

Q12. Ensuring proper tensioning between expenditure on civil space activities and other priorities across Government

The present arrangements are good for this topic in the sense that space must justify any budgets as part of the spending review process. If we move towards an agency this could continue albeit with the proviso in the response to Q2 where we argued that the agency should have some additional funds for infrastructure and early phase work. The tensioning would still be fully present for operational systems and services.

Q13. Ensuring proper accountability for expenditure, including – if new budgetary arrangements are proposed – which department is best placed to oversee this expenditure

It’s really for government to decide but the BNSC or agency should be monitored for performance – not only against science goals but also against economic goals - the space industry is a net exporter and could perform better with stronger government support – this would surely be good for the UK overall.

Q14. In addition are there any other issues that need to be taken into account that would help the UK

maintain its excellence in any aspect of space activity?

As indicated in the answer to Q1 the current emphasis with respect to BNSC focus is towards the institutional market and for this some support is provided via limited 50% funded programmes such as the Centre for Earth Observations (CEOI). This programme, jointly funded by NERC, is exceedingly small and financially favours engagement by the academic community who are able to secure 85% of their full economic costs. This should be compared to programmes in other ESA states where delivery of national missions or technology activities leading to ESA missions is fully supported at the 100% level, both in the technology development phases and the delivery of the missions. Furthermore, it seems illogical that the ESA missions, both space science and Earth observations, which are typically one off, should be developed on the back of 50% UK industry funding. Industry would be much more willing to invest in activities that would lead to commercial programmes but little opportunities exist. In the telecoms market the ARTES programme provides some support and in principle the Technology Strategy Board (TSB) could provide funding for other opportunities, for instance in the commercial EO market, but TSB has so far not fully recognised the commercial potential of the space industry and is not wrapped into an overarching UK space strategy.

In the current economic climate with high levels of government debt, it is felt that Space must be allowed to contribute to the UK economy primarily through exports leading to an improved balance of trade and positioning of the UK as a high value engineering partner for the strongly developing global economies. A coordination of policy between DfID, FCO and BIS to allow the industrial strengths of the UK Space industry to be utilised in overseas aid and trade partnerships is necessary. More importantly the current status of space programmes as national endeavours needs to be supported by interaction between the UK and international customers at the highest levels of government.

Annex 1 to Annex A – MOSAIC Programme

Between 2000 and 2005 the BNSC ran a £15M programme called MOSAIC (Micro Satellite

Applications in Collaboration). MOSAIC co-funded three demonstration missions that tested small satellite technology. The three missions were:

  DMC (Disaster Monitoring Constellation), led by SSTL

  TopSat, led by Qinetiq supported by RAL, Infoterra and SSTL

  Geostationary Minisatellite Platform, led by SSTL

For the DMC, the BNSC funded one satellite in the constellation. This then allowed SSTL to win contracts from other countries to complete the constellation. SSTL is currently replenishing the system with new, second generation satellites. To date over £100M of business can be traced to the initial UK government investment. The system has also allowed the UK to become an active member of the International Charter for Space & Major Disasters in which space assets are used to support relief work following disasters such as tsunami, floods & earthquakes.

TopSat was cofunded by the UK MoD and successfully demonstrated the ability of small satellites to generate high resolution surveillance imagery. The technologies developed within the TopSat programme are now available to MoD for future operational systems. In addition the technologies have been commercialised and underpin the businesses of SSTL and the RAL spin-off company Orbital Optics (now part of MDA).

The Geostationary minisatellite platform project developed equipment and designs that enabled SSTL to successfully bid into the Galileo programme and build the first Galileo satellite, GIOVE-A. Through this work SSTL is now bidding for a major part of the operational Galileo system currently being procured by the EC and ESA. Post –MOSAIC, SSTL has continued to develop the platform and we expect Geostationary telecommunications to be a major factor in the future growth of the company.