Public spending watchdog flags ‘challenges’ facing UK Space Agency

The UK Space Agency (UKSA) has faced challenges in securing value for money from its investment in the European Space Agency (Esa), the UK’s public spending watchdog has said.

The National Audit Office (NAO) found that the UK does not yet receive contracts from Esa proportionate to the value of the funding UKSA provides.

A report published on Tuesday suggests there has been little progress in implementing the UK’s national space strategy, which was unveiled in 2021 by the previous government.

The NAO report highlights the UK Space Agency’s proactive work to align its activities to government priorities, implement a comprehensive transformation programme and improve its culture, and it also identifies a series of challenges

According to the document, the previous Department for Science, Innovation and Technology (Dsit) recognised that the original strategy was broad and that it did not know how much it would cost to deliver.

It adds that three years later, Dsit and UKSA are still in the early stages of identifying and developing the plans and capabilities needed to deliver the space strategy’s ambitions.

The strategy outlined five goals – grow and level-up the economy, promote the values of global Britain, lead pioneering scientific discovery and inspire the nation, protect and defend the national interests in and through space, and use space to deliver for UK citizens and the world.

According to the NAO, Dsit – under the previous government – did not provide enough clarity or detail on its strategic ambitions to “allow delivery bodies and stakeholders to plan to achieve them”.

The Government will respond formally to the report in due course

Looking at the UK’s investment in Esa, the report found that of UKSA’s overall annual spend, 85% (£553 million) went to Esa in 2022/23, and UKSA has committed to spend around £1.84 billion from 2023 to 2027.

In February 2023, a UKSA executive committee meeting paper reported that UK companies received an estimated £0.93 for every £1 UKSA contributed to Esa, excluding Esa’s internal operating costs.

The NAO report notes that UKSA, is working with Esa to increase the value of contracts the UK receives.

By the end of 2023, UKSA reported the UK’s return increased to £0.96 for every £1 contributed.

But this means UK industry and researchers are still not benefiting in terms of contract value from the full funding given to Esa by UKSA, the NAO says.

In comparison to the UK, France, Germany and Italy achieved values of between 0.99 and 1.02.

This suggests that Italy, France and Germany are all getting better value from contributing to Esa than the UK.

The UK is the fourth largest contributor of all Esa member states after these three countries.

But the report also sets out that UKSA is working with Esa to ensure it receives contracts that are proportionate to the value of the funding UKSA provides by the end of December 2024.

According to the NAO’s conclusions: “UKSA has recognised many of these weaknesses and has been putting in place arrangements to remedy them, including a revised approach to allocating funding, and improved monitoring and evaluation processes.”

A spokesperson for the UK Space Agency said: “The NAO report highlights the UK Space Agency’s proactive work to align its activities to government priorities, implement a comprehensive transformation programme and improve its culture, and it also identifies a series of challenges.

Dsit and UKSA have identified that UKSA has more work under way than it can afford to continue, unchanged, beyond March 2025 without a budget uplift, and it may have to make difficult decisions on which of the strategy’s ambitions to prioritise

“The Government will respond formally to the report in due course.”

The report further states that UKSA and Dsit’s process for allocating UKSA’s £1.75 billion budget for 2022 to 2025 had some weaknesses but that they are improving the approach for the next spending review period.

It adds that “Dsit and UKSA have identified that UKSA has more work under way than it can afford to continue, unchanged, beyond March 2025 without a budget uplift, and it may have to make difficult decisions on which of the strategy’s ambitions to prioritise”.

The NAO recommends that “by June 2025, Dsit should, in preparation for and following the outcome of the spending review, assess whether there will be sufficient funding to achieve its ambitions and identified capabilities”.

Additionally, it sets out that should there be insufficient funding, the department should update its plans, setting out what would be deprioritised together with its longer-term funding ambitions.