Is Britain’s 5-year-old space investment locomotive running out of steam?

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LONDON—The British government’s spectacular increase in space investment since 2012 is showing signs of losing steam as a new set of government leaders rethinks the sector’s potential in driving economic growth, British industry officials said.

While it may be a case of hitting a temporary plateau, they said recent trends show the necessity of continually renewing the case for space investment to each new crop of government managers.

“We have a [Ministry of Defence] and a Chancellor [of the Exchequer] who are equally convinced, and I think that has helped us convince [Universities and Research Minister] Jo Johnson and Sajid David [secretary of state for business, innovation and skills] that space is worth it,” said Andy Green, the former chief executive of Britain’s Logica, since renamed CGI. “It is not a slam dunk that this will always be the case.”

Green has been the industry head of Britain’s government-industry Space Leadership Council since its creation in 2010. He has witnessed the results of the British government’s decision in 2012 to increase its contributions to the 22-nation European Space Agency (ESA) by 25 percent.

But the change in government of May 2015 brought a fresh crop of administrators who were not steeped in the past six years’ efforts. The result: “We kept our Space Leadership Council by the skin of our teeth,” Green said. “It’s a much smaller group of people, and a much shorter amount of time available, only meeting once every six months. But it continues to give us an opportunity to get ministers focused on delivering the things industry needs.”

Britain has focused its ESA investment on commercially promising fields including telecommunications and Earth observation, increasing its ESA contribution by 34 percent between 2012 and 2015, to 322.3 million euros, or about $392 million at then-prevailing exchange rates.

As part of the government-industry-academia partnership that underpinned the increased spending, the British government in 2010 established the Space Leadership Council to advise on space spending priorities.

The U.K. Space Agency, created in 2011, has doubled in size since then to a still-modest 80 full-time staff. As part of its recognition for Britain’s new investment, ESA has established its telecommunications directorate at Harwell, near Oxford.

The Harwell facility, called the European Centre for Satellite Applications and Telecommunications (ECSAT), has a staff of 100 and has acted as a magnet for three dozen small space companies or new divisions of larger companies from Canada, the United States and elsewhere.

This being Britain, the targeted investments were all designed to produce quantifiable economic benefit. Even the current international space station mission of Tim Peake, a British national flying on behalf of ESA, has been subjected to cost-benefit calculus.

David Parker, who in April became ESA’s director for Human Spaceflight and Robotic Exploration, said in a farewell blog that Peake’s six-month mission has sparked nearly 500,000 student education projects.

“Only a few thousand extra young people need to take up STEM careers for the mission to pay its way, putting aside the science and commercial returns,” Parker said.

The Satellite Finance Network was created to facilitate investment in Britain’s space sector and to create a network matching investors to start-up companies. Its other goal is to reduce regulatory barriers to investment.

Joanne Wheeler, a partner at the law firm Bird & Bird and the network’s co-chair, said the government’s agreement in 2015 to limit satellite operator liability at 60 million euros, putting the U.K. in line with other spacefaring nations, is one example of successful lobbying b the industry. Another, she said, is the removal of the 6 percent premium tax on space insurance policies.

Addressing a Satellite Finance Network meeting here April 4 organized by Bird & Bird, Green said that, after five years of dealing with a government fully won over to the idea that space spurs the wider economy, Britain’s space sector now needs to focus on “the first tentative steps with a skeptical government.”

One industry official said it has become clear in recent months that space’s value to the economy is obvious to very few people outside the space industry. “With every new face in government, you need to start from scratch,” this official said.

Tracking annual ESA budgets is an imperfect measure of a nation’s space posture, in part because the budget is based on annual assessments of how much cash already approved programs will need.

The increased ESA focus on launch-vehicle development, with the new Ariane 6 and Vega-C rockets, also distorts the picture, as this is a rising tide that does not lift the British boat given Britain’s long-standing aversion to investing in Europe’s rocket program.

Nonetheless, Britain’s ESA contribution in 2016 is increasing by just 1.4 percent, whereas the agency’s overall budget from its member governments is up 15 percent before accounting for contributions from the 28-nation European Union.