Is the UK Space Strategy flying, or has it crashed and burned?

(Image by LoganArt from Pixabay )

When Boris Johnson (remember him?) hailed the UK’s National Space Strategy back in 2021, the rhetoric was predictable (“The days of the UK space industry idling on the launch pad are over, this government has the Right Stuff...” and so on), but the core message was sound: space is an important sector for Britain.

Space contributes £17.5 billion (£22.5 billion) to the economy, according to the latest government figures, a four percent year-on-year increase from £16.8 billion. It also employs 48,800 people, up from 47,000 in the year before, across nearly 1,600 companies and organizations – 300 more than a year earlier. In total, the space sector now supports 126,800 jobs in the wider supply chain.

Much of this is about technology products, services, and jobs. All of that expansion is against prevailing trends in a national economy that is experiencing only fractional growth. Speaking in the Spring, CEO of the UK Space Agency, Dr Paul Bate, said:

The increase in sector income and £635 million investment generated by UK companies shows the confidence of investors and businesses in the UK space sector. The UK Space Agency will continue to catalyze investment to maintain this positive growth and bring further benefits across the UK economy, the science community and to the planet as a whole.

Even so, the usual public response to the sector is, “Why are we focused on space when there are so many serious problems on Earth?” The answer, of course, is that much of the industry is focused on exactly those problems, providing vital communications, sensor, monitoring, and location services to the planet.

In Britain, the industry is less about the things most people associate with space, such as rocket science, test pilots, and intrepid scientists, and more about satellite navigation, communications, and hardware (including sensors), and on satellite management, maintenance and retrieval, including via specialist robotics – another key sector for the economy. 

That said, one ambition of the National Space Strategy was to position the UK as an independent location for small rocket launches, via a new generation of space ports – a high-risk strategy for a group of islands with a land mass that is 40 times smaller than that of the US. 

So, as 2023 draws to a close, the big question must be: how big a blow to the UK’s ambitions was the failure of the first rocket launch from Spaceport Cornwall in January? 

To recap, the horizontal launch out over the Atlantic from a Virgin Orbit 747 saw the rocket make it off the ground, and off the plane, but the second-stage engine suffered an anomaly (space-speak for an unexpected event, such as an explosion or component failure) 110 miles above Earth, leading to the loss of the rocket and all nine satellites onboard.

The answer to that question, from an economic standpoint, is: we don’t know. The healthy figures above, quoted in 2023 government announcements, are from FY 2021. However, the failure certainly dampened spirits in the sector and may have damaged international confidence. So, there was a lot more riding on it for Brexit Britain than those satellites.

Craig Brown is Investment Director of the UK Space Agency (UKSA). He says:

It was hugely disappointing for everybody involved, not least the companies that we supported to fly on that mission. It reflects very well the challenges of launch, and space in general – the cliché that space is hard.

It also led to the demise of Virgin Orbit in May – at that point, Spaceport Cornwall’s key client. Brown explains:

The loss of Virgin Orbit as a company was very sad. The timing of that failure was catastrophic. They were in the process of raising a funding round and, had that launch been successful, I think that the funding round would have been very different for them, and the outcome very different. So, it was a bit of a ‘Sliding Doors’ moment for the company in many respects. It poured cold water on their investor community, and suddenly people weren't so interested.

Indeed, the failure led to questions in Parliament about whether the UK should leave its rocket ambitions on the launchpad and focus on the things it is good at – which, from a single incident, could be seen as a catastrophic failure of ambition. What does Brown think? He says:

Should we be putting our money elsewhere? We don't put a lot of money into launch at all! As a comparison between UK and international investment, the government’s support for launch has predominantly been around the regulatory environment. It's about making sure that the UK is a place where companies can launch from. 

We've supported our spaceports, but we haven't bankrolled them. They've been raising private investment largely to bankroll their own activities. But we have supported them politically. And, where we can, with some of our R&D programmes.

Brown explains that, while the likes of SpaceX can – backed by the world’s richest man Elon Musk and its biggest economy, the US – afford to lose rocket after rocket until a system succeeds (a good description of rocket science since the 1940s), things are challenging for competitors.

The reality is that launch is a bottleneck on the growth of the space sector. It's also a problem when we're all reliant on a single company, globally, to launch our satellites. And we are seeing perverse behaviours in the business community, where Elon Musk's competitors are having to use Elon Musk's rockets to get into space. And that's not a comfortable position for a lot of them who would prefer to use other launches where available. So, at the moment we have a real challenge.

So, does the business case still stack up for small launches from the UK? 

We believe it does, and we continue to support that. There are good reasons for the UK to have sovereign capability, and be able to launch its own satellites from its own soil. But fundamentally, the approach we're taking is largely still to rely on private investment.

Samuel Whelan is Senior Advisor, Space Strategy, at the Department for Science, Innovation and Technology (DSIT). He adds:

We're still very committed to the ambitions that we set out in the National Space Strategy to develop the small satellite launch market in the UK.

But I would add that a lot of the elements of that first launch were a success from a systems point of view. We got the first spaceports licensed, we got the first satellite licence, we negotiated the airspace rights, and got that first launch off. It was obviously unfortunate that it didn't make it to space, but there are several other launch providers who are still developing options for the UK.

Turning to the big picture, Whelan continues:

The National Space strategy was a significant first milestone for us, setting out an ambitious ten-year vision, showing that the UK has got strong ambitions for space. 

It brought together civil and defence policy for the first time, setting out our commitment to commercialize the space sector and grow the new space economy. 

Plus, looking more broadly at our capabilities and our international relationships, recommitting to the European Space Agency [ESA] and expanding relationships globally.

A joined up, integrated strategy 

Moving forward, the Strategy is built on four key principles that underpin how the government sees the UK space economy growing. Whelan says:

The first is about unlocking growth and levelling up. The resiliency of the space sector is important to the government. That means how we ensure that UK businesses can access the investment they need, building the networks of clusters across the UK so that businesses, scientists, and the whole sector can work together, forming important trade partnerships and removing barriers to the growth of the space economy. 

The second is international collaboration. ESA is one of our biggest, most significant routes to international partnership. We invested over £1.8 billion [$2.3 billion] in ESA last year, which is delivering huge programmes like the Rosalind Franklin Mars rover, the Boost programme for sustainable spaceflight, right through to business and science interventions. But it's really important that the UK isn't just focused on that one relationship. We're working right across the world, with countries like Canada, Japan, and the United States.

The third pillar is science. And we set out in July the first set of long-term exploration goals for science in the UK, and there's some really big programmes like the National Space Innovation programme. 

But the final pillar is where we've probably made the most progress in recent months, and that is the UK’s approach to its resilience capabilities. 

“In July, when we published the Space Strategy in Action [follow-up document], we set out the first comprehensive set of civil capability goals that articulates for the whole sector where the UK is going, the types of activity that we need to be able to access from space, the capabilities that we need to access them, and how we're going to bring together not just the civil capability goals, but also defence.

A joined-up, integrated strategy, no less. This begs the question of why the UK has coherent strategies for space, data, AI, and more, yet lacks an overarching Industrial Strategy to link them with other technologies, such as robotics. (The 2017 Industrial Strategy was torn up in 2021 to focus on the ‘Plan for Growth’.)

The UKSA’s Brown notes:

One of the purposes of unlocking space for government is to really understand the barriers from non-optimal collaboration across government departments. And UKRI [UK Research & Investment, which includes Innovate UK] is part of that equation for us. 

We recognize that things aren't optimal at the moment in the way that coordination happens. And of course, the independence of researchers that are funded through UKRI is fundamentally important. 

But when it comes to funding, collaboration, and pooling money – how much the UK spends domestically on space isn't as high as nations like France and Germany, for example – maybe we can pool funding pots and focus our joint efforts on common goals, in a better way.

The UKSA itself will be core to that process, he believes.

For us, one of the key aspects is this idea that we will catalyze investment. We will spend our money and really leverage private money to help our businesses grow and access non-government contracts and private capital. And we've done this well over the years, but without a specific enough plan to maximize that. 

So, our corporate plan in response to the National Space Strategy set out our vision to put more effort behind capital investment into the UK space sector. But frankly, if we want to keep up with the pace of growth in the space sector, we have to multiply the money that we've got to spend as a government by bringing in that private capital. 

Around 70% of the agency's budget is spent through the European Space Agency and 30% through the national programme. But I will say that the intention has always been to grow what we do nationally to complement what we do through ESA. 

That's not to say that ESA is not important; it's absolutely fundamental to everything that we do. But we feel that there are certain things that we can do through national money and national spend to maximize our policy ambitions.

This includes some new investment areas, he explains:

We've introduced the Space Clusters Infrastructure Fund, which is designed to invest in R&D infrastructure. This is a significant programme of work. In fact, we have overspent on the budget, because of the number of good ideas that we had come in. We're currently looking at a portfolio of up to £59 million [$75 million] on that, and we will see over £100 million [$127 million] of investment once we factor in contributions from the private sector. 

We’ve also introduced the LEO & GEO [Low Earth Orbit and Geostationary, referring to satellites] and other accelerator programmes. 

Venture capitalist firms are directly involved in the running of those accelerators. And the idea behind that is – with a relatively small investment from government to help with the running costs of an accelerator with a VC involved – sthe companies that are brought onboard will receive significantly larger amounts of private investment than they would have otherwise. This is a really good way of using a small amount of money to bring in a lot of private capital.

Brown continues:

We've also introduced a programme called Unlocking Space for Investment, which is currently piloting two different streams. One of them is around investor readiness. So, this is where we want to – if you like – educate companies to become investor ready. And we have a separate stream geared towards helping VCs, both inside and outside the space sector, to understand the opportunities within UK space, and the UK space value chain.

My take

Good news, and positive programmes. 

But all this begs another question. Given the significant contribution that space makes to the UK economy, in terms of income, jobs, and a growing supply chain of specialist companies, why does the government put in such trifling, piecemeal, under-powered sums itself? Funding that might suggest to prospective partners that the UK is both risk averse and not as serious as it claims about its ambitions.

Purely for comparison (and not to make a political point), it can find an estimated £300 million to send zero of 100 asylum-seekers to Rwanda. That is five times the money available for the Space Clusters Infrastructure Fund. What message does that send to the world?