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Sir John Bourn, head of the National Audit Office, reported today that the Government’s investment in space, coordinated by the British National Space Centre (BNSC) Partnership, has a number of strengths, including lean, user-focused programmes built up from wide consultation, many of which have produced important scientific and commercial benefits. There is scope, however, to identify and analyse further opportunities for productive investment in space, continue to develop risk management of space programmes and generate more information on the progress and impact of space investment.

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Government policy is to engage in space activities where they are the most effective tools to deliver scientific and commercial objectives, rather than considering the development of space technology as an end in itself. Many nations have broader space objectives and manage their space activities through a single space agency housing policy, funding and implementation in one body. The United Kingdom’s partnership differs but fits well with the policy emphasis on the uses and users of space and is a cost-effective means of securing the benefits of international co-operation on space programmes.

The Partnership’s strategy for space communicates the over-arching rationale for investment in space soundly, and sets broad objectives for space investment. The strategy would benefit from further analysis of the risks to achieving objectives and how they could be managed, and of the opportunities available. It might show more fully how the Partnership intends to exploit the opportunities resulting from the greater European Union resources that are likely to be applied to programmes aimed at the commercial and public policy applications of space.

The Partnership is necessarily selective in the activities funded. Choices are made after wide consultation. Two-thirds of the budget is invested directly in European Space Agency (ESA) activities, enabling access to programmes of a scale that would be difficult to fund nationally. ESA, under its system of juste retour, aims that each member state receives a return in industrial contracts equal to the value of its contribution over time. Following concern raised by a British company, BNSC found that data used by ESA to manage the system has overstated the level of contracts awarded to the United Kingdom by approximately £6.9 million over the last three years. Although the return, which is cumulative, is being corrected, there is a modest risk that these errors might have restricted the ability of firms to win new business from ESA. The value of any business lost is likely to be recovered in future years.

The Partnership also run national programmes aimed at positioning the scientific and industrial communities to take maximum advantage from current and future ESA programmes, scientific exploitation, and covering gaps in ESA activities in areas of particular interest or benefit to the United Kingdom. Because of the impact of factors external to the programme, such as currency movements and other Departmental priorities, the DTI national programme has been reduced by 62 per cent since 2001-02 to £8.4 million. More generally, firms we surveyed valued the support and advice they received from BNSC Headquarters, although small firms were less likely to be aware of the services available.

DTI’s appraisal of space investment proposals under its national programme followed established guidance. Our examination highlighted weaknesses in option appraisal and the treatment of risks and assessment of benefits. Better performance in these areas is desirable if high risk but high benefit projects like Beagle 2 are to be fairly appraised and tightly managed in the future. In the case of Beagle 2, sensible approaches were adopted for identifying and mitigating technical risks, but the appraisal of applications for public funding did not identify the residual risks of the project. Beagle 2 was a high risk, high reward project. Although it did not achieve its principal goal it has produced a number of benefits for the United Kingdom space industry and scientific community.

Monitoring of progress reduces as the focus shifts from individual missions or projects through programme areas up to the Partnership. For example, a lack of data constrains the Partnership’s ability to monitor progress against important objectives such as the use of space to improve productivity. There have been a limited number of systematic evaluations of space activities and associated scientific and industrial impacts, as opposed to reviews of management arrangements. The Partnership is committed to securing better information on outcomes.

"There are many strengths to the United Kingdom’s space activities not least of which is a history of delivering lean, user focused programmes. The Partnership should better identify how it intends to benefit from the increased activity undertaken by the European Union in space, minimise project risk by early involvement in implementation, and better measure the benefits that space investment brings to the United Kingdom."

Sir John Bourn


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