UK Government response to the Review of the budgetary and organisational arrangements for BNSC

BNSC’s structure and powers:

1. BNSC should continue to be a unitary body, as this is the most
effective way of coordinating UK Government space interests and
representing the UK at ESA.

Agreed. The BNSC partnership structure facilitates working across
boundaries between Government Departments and Research Councils
and provides a single interface with European institutions. It provides a
focus for introducing space technologies and services to new
Government and private users. Any changes to integrate DTI’s
interests more closely into the main stream of innovation policy must not
weaken this great strength, which the Select Committee and the
evaluation both noted.

2. BNSC should retain at least some control over the budget for space
activities in order to generate new activities and associated
programmes.

Agreed. Developing underpinning space, and particularly satellite,
technologies remains a key part of the Government’s space strategy
and is expected to do so for the foreseeable future. This needs to be
closely guided by future UK needs for space infrastructure and services.
The DTI will continue to exercise responsibility for this.

3. However, BNSC should work with other parts of DTI, in particular CII,
so that in the future CII has control over part of BNSC’s satcoms
funding budget. This will ensure a more coherent DTI policy on satcoms
R&D funding than exists at present.

In principle, the relationship between DTI staff in BNSC and DTI
directorates dealing with the development of communications
technologies, new and emerging technologies, and the impact of
environmental policies on industry should be at least as strong as those
between the NERC and PPARC staff in BNSC and their respective
parent Councils. This will take time to develop and will involve changes
in attitudes in both BNSC and the other DTI directorates concerned.
The Director General of BNSC has established this as a priority for
2002/3. This is consistent with the establishment of closer cross-team
working in the newly established Innovation Group in DTI.

Subscriptions to ESA programmes:

4. PPARC should be made financially responsible for the whole of UK’s
contribution to the mandatory ESA science budget, and the necessary
money should be transferred to PPARC from DTI to pay for this.

Agreed. The uninformed observer can easily assume that this science
expenditure is geared towards industrial support, simply due to the way
in which it has been brigaded with such expenditure within DTI. Making
this transfer will allow future decisions on the relative merits on spacebased
and non-space systems to be made by those with appropriate
expertise and policy responsibility. It is intended that the transfer will be
finalised following the settlement on the Government’s Spending
Review 2002 (SR2002). New arrangements should be in place by 1st
April 2003.

Government response to the Review of the budgetary and organisational arrangements for BNSC 4

5. NERC should be made financially responsible for the whole of the
ESA EO science budget, and the necessary money should be
transferred to NERC from DTI to pay for this.

Agreed. The same arguments apply as under the previous
recommendation. It is intended that the transfer will be finalised
following the settlement on the Government’s Spending Review 2002
(SR2002). New arrangements should be in place by 1st April 2003.
The transfer will apply to those ESA optional programmes which have
primarily scientific objectives: ie the Earth Observation Envelope
Programme, First and Second Phase, and Envisat which in the future
will be incorporated into the Envelope Programme. The financial
arrangements will ensure that neither DTI nor NERC is disadvantaged
by the effects of slippage in the relevant programmes.

6. BNSC should determine with PPARC exactly what proportion of the
UK contribution to the mandatory ESA subscription goes towards initial
development of missions and what proportion goes towards general
ESA costs. It is recommended that PPARC pays for the former, and
BNSC through its DTI funding pays for the latter.

Not accepted. The contribution to the General Budget of the ESA
covers a range of outcomes, including general technology development,
studies for future missions, particularly astronomy and planetary
research missions, and the costs of running an international
organisation, such as publicity and the salaries of the Director General
and his direct staff.

The General Budget contribution is essentially a membership fee which
results from joining the Agency. An option being actively explored is
that the cost should therefore be borne broadly in proportion to the use
which the BNSC partners make of the Agency’s programmes. It would
therefore be shared in future proportionately by the DTI, the PPARC
and the NERC, on the basis of agreed, fixed percentages. The
programme transfers accepted under recommendations 4 and 5 above
would take this into account. These arrangements would then be
reviewed after 5 years.

Relations with other parts of DTI:

7. BNSC should work to create better links with proxy users of space in
DTI and allow these users to shape policy on space expenditure. In
particular:

• CII (Communications and Information Industries Directorate) should work more closely with BNSC on satcoms policy
• ENV/JEMU (Environment Directorate Joint Environment Markets Unit) should work with BNSC on operational EO policy

Agreed. CII is currently represented on the Telecommunications and
Navigation Board, an advisory board of BNSC. However, as the
Review makes clear, this does not of itself lead to a close co-ordination
of policy and technology programmes on, for example, satellite
broadband. A jointly agreed strategy on strengthening the relationship
between BNSC and CII will be prepared and implemented during
2002/3.

Discussions have also taken place with JEMU, the Energy Group the
Patent Office and with the National Measurements System with whom
there is scope for improved cooperation. It will also be important to
strengthen further BNSC HQ’s relationships with DEFRA and other
Government Departments which have responsibilities in operational
environmental monitoring.

8. BNSC should allocate some resource (half a person) to CII in order
to enact the above recommendation on CII’s and BNSC’s relationship.

The DTI satellite communications team within BNSC is currently being
reinforced. It will have the specific responsibility to build and foster the
relationship with CII in line with the jointly agreed strategy referred to
above.

9. With respect to BNSC’s national technology programmes (funded by
£19m for 2001-2002, from DTI’s input into BNSC), BNSC should identify
much more clearly and openly than is currently the case exactly what
information it needs itself for policy development and regulation, and
what technologies it is aiming to generate within businesses for their
benefit.

For the latter activities it should aim to ensure that all funding is
provided through open and competitive application, and not via direct
negotiation as currently seems to be the case. It should ensure that the
results of the programme are evaluated on a regular basis, and
disseminated widely to the space community in the UK where issues of
commercial confidentiality permit.

Agreed. BNSC will reappraise the components of its National
Programme in the light of the changes in industrial support funding in
the DTI. Where unique national capability is being updated, there may
remain cases where direct negotiation remains appropriate.

10. BNSC should make formal the process of deciding funding of
different programmes. Currently this process is carried out in an
informal and ad-hoc manner by BNSC staff with general reference to
the agreed 3 year strategy. It should be carried out on a regular
timetable, subject to scrutiny by the Resources Board, and the
reasoning behind spending decisions made public (BNSC is already
attempting to do the latter). There should be a formal “chain of
command” between the people shaping the spending allocations and
the Resources Board.

Ministers set priorities in the Space Strategy, which guides the
allocation of DTI’s space budget. The majority of new programme
commitments exceed £1m and hence require approval by ministers,
who are provided with an overall forecast at the time of each major
decision. In this way, they are able to assess the impact on priorities.
There may be scope for formalising reviews at official level on a regular
basis and increasing co-ordination of expenditure across the
Partnership, as the Review suggests, though the long-term nature of
most programmes means that the interval between significant decisions
can be two years or more. As part of a re-assessment of the role of the
Resources Board (see recommendations 12 and 13), BNSC will
consider what additional procedures can be put in place, without
introducing undue rigidity into the management of the Space Budget.
These will take account of any new arrangements for assessing
expenditure priorities within the Business Support and Innovation
Groups in DTI.

Arrangements and powers of Resources Board

11. The current Chair of the Board (who is the manager of the DG of
BNSC and head of the relevant DTI group in which BNSC sits) should
become an ordinary Member, and correspondingly have the power to
represent DTI’s views more fully and visibly than is currently the case.

12. The Minister for Space should become Chair of the Resources
Board, in order to resolve the fact that BNSC must answer to both the
Resources Board and the Minister on spending priorities and
allocations.

13. The Resources Board should have the power to scrutinise the
spending plans of BNSC’s DTI budget and recommend changes.

These recommendations are taken together and have led to a
fundamental reconsideration of the purpose and operations of the
Resources Board and its related bodies. Changes in the structure of
the DTI impact on this: the new reporting line for the Director General of
the BNSC is to the Director General of the Innovation Group in DTI.

The Partners in BNSC work together on a day-to-day basis in a flexible
way, adapting working methods to meet the needs of their tasks. This
is the core of space co-ordination in the UK. Nevertheless, the
arrangements for co-ordinating at a senior level and for consulting the
space community and potential future users of space services are
important. The Resources Board will be replaced by a UK Space
Strategy Council, chaired by the Director General of the DTI Innovation
Group. The Strategy Council will provide strategic guidance to the
government bodies which make up the BNSC. It will be composed of
the Chief Executives of all Partners, space industry and services
representatives and one or two independent members. The Strategy
Council will normally meet annually and may discuss current issues with
the Minister for Space. The Director General of the Business Support
and Business Relationship Group will represent the DTI.

BNSC will continue to be advised by three sectoral and two crosssectoral
groups. The terms of reference will make clear that they
advise all the Partners in the relevant field, as well as BNSC
headquarters. The Chairmen of the boards will report to the Strategy
Council.

Staffing of BNSC

14. DTI staff within BNSC should be distinguished between those
representing DTI’s views and those working on behalf of the whole
partnership. This will help to make DTI’s policy more visible in BNSC.
Agreed. In future, those whose role in BNSC is primarily to service the
Partnership will be distinguished from those who primarily represent DTI
interests.

15. All policy-making posts in BNSC should be advertised across the
whole partnership and not just in DTI.
Posts serving the Partnership will in future be opened to all funding
Partners. It will be for the DTI to determine on a case-by-case basis
how to fill policy and programme posts which are primarily involved in
managing the DTI programme and strategy.

16. The DG post should be advertised in the outside world and not
automatically filled by a senior civil servant from the DTI.

The Government is committed to filling senior posts by a variety of
means including open competition. The circumstances at the time
when a post becomes vacant determine the means by which it is filled.
All options including open competition will be considered when the
position of Director General of the BNSC next falls vacant.

17. A public database should be created showing the specialist skills
and knowledge of staff in BNSC.

Information on the experience of senior staff in BNSC HQ was supplied
in aggregated form to the Trade and Industry Committee during its
inquiry into space policy. As resources permit, this will be updated and
made available on the BNSC website, while respecting the rights of
individuals over the extent to which details of their careers should be
published.

18. The BNSC website should specify how BNSC works and how it
awards money. Currently there is nothing on the website to indicate the
means by which BNSC funds industry, apart from specific material on
individual programmes.

BNSC will consider how best to make information of this nature
available, while recognising that much of the investment by government
bodies in space R and D involves development contracts, not support
for industry through grants. Links to the European Space Agency and
funding Partners other than DTI will be provided.

19. The existing Information Unit should act as a general point of
contact specifically designed to help businesses with little or no
experience in the space sector.

The knowledge and experience required to provide a point of contact for
industry are more likely to be available among the sections of BNSC
which deal with programme management. BNSC ensure that such a
contact is identified as part of its response to recommendation 18.

Other

20. PPARC and NERC should extend their existing relationship and
work even closer together to identify common areas of interest, in
particular development of instrumentation and data processing
activities, but also common space missions.

Agreed. There are already a number of academic departments where
space and earth scientists work in closer partnership to deliver the
maximum scientific benefit from space technology. NERC and PPARC
are now also working together to identify space missions of common
scientific interest; for example, the Councils are considering a proposed
mission in the area of Solar-Terrestrial physics (EarthShine). As part of
the implementation of the review recommendations, NERC and PPARC
will co-ordinate closely on scientific space policy.