UK Government releases new Space Industrial Plan

On 7 March 2024, the UK Government released a new Space Industrial Plan, building on its 2021 National Space Strategy.

This article provides context to the Government’s announcement, including the National Space Strategy which we have previously written about here, and what lies ahead under the new Space Industrial Plan. This is the first in a series of articles which we will publish on this topic.

Background to the UK’s space strategy

The UK has historically played an important role in space activities. The first British satellite, Ariel-1, was launched in 1962 as part of the Ariel satellite programme, making the UK the third country to operate a satellite in the world (after the United States and the Soviet Union). Since then, the UK has played various roles in the global space economy, being one of the key satellite manufacturing hubs the world . These roles include the development of UK-specific space programmes and contributions to space programmes of the European Union and European Space Agency, of which the UK is a co-founding member.

Despite this and the UK’s strengths in space, following an Integrated Review of Security, Defence, Development and Foreign Policy in 2021, the UK Government suggested the need for the UK to become a “meaningful actor” in space.

This review was made in the context of a significant increase in commercial activities being undertaken in space and growth of the global space economy, continued recognition of the importance of space to everyday life (including through satellite communications, broadcasting, maritime safety, GPS and navigation) as well as threats to the use of space and expanding possibilities for the use of space for military activities.

These matters required the UK to address these opportunities and threats in a more direct and strategic manner to:

1. support the UK space sector, so that the UK can capture a proportion of the value being created in the global space economy; and
2. ensure continued UK access to space and security.

The National Space Strategy, released in September 2021, therefore sets out an integrated strategy covering both civil commercial and military space policy.

National Space Strategy

The National Space Strategy sets out a broad vision as follows:

“build one of the most innovative and attractive space economies in the world, and the UK will grow as a space nation. We will protect and defend UK interests in space, shape the space environment and use space to help solve challenges at home and overseas. Through cutting-edge research, we will inspire the next generation and sustain the UK’s competitive edge in space science and technology.”

The National Space Strategy further sets out more specific goals of:

• Growing and levelling up the UK’s space economy.
• Promoting the values of Global Britain.
• Leading on pioneering scientific discovery and inspire the nation. 
• Protecting and defend UK national interests in and through space. 
• Using space to deliver for UK citizens and the world.

The National Space Strategy is broken down into four separate phases:

1. countdown phase (2021) – setting the UK’s strategy for space and establishing core foundations for implementing the National Space Strategy, including establishing funding programmes;
2. ignition phase (2022 to 2023) – implementation of the National Space Strategy commences by establishing programmes to deliver strategy goals, establishing new space relationships and building on UK leadership as a science superpower;
3. thrust phase (2023 to 2030) – integration of the strategy’s benefits into the UK economy, society, and daily life; and
4. orbit phase (2030 and beyond) – re-evaluation of the strategy and assessing progress against goals.

The initial “countdown” and “ignition” phases of the plan have now ended.

The UK has had a number of achievements during the countdown and ignition phase of the National Space Strategy, including:

• release of the UK Defence Space Strategy;
• announcing more than GBP10 billion of funding for space activities;
• creation of the Department of Science, Innovation and Technology; and
• licensing of spaceports in Cornwall and Shetland.¹

As we move into the “Thrust” phase of the National Space Strategy (from 2024 to 2033), the Space Industrial Plan has been prepared to set out clear timed goals and actions for this phase.

Space Industrial Plan

The Space Industrial Plan identifies commercial industry as key to the thrust phase, with the UK government aiming for the plan to be backed and run by the commercial space sector.

The Space Industrial Plan sets out key actionable goals across the following main areas:

1. improving delivery of UK national space capabilities;
2. transforming the UK’s relationship with industry; 
3. developing a strategic approach to the European Space Agency; 
4. enhancing the regulatory environment and sustainable practices for space; 
5. boosting UK investment and access to finance; 
6. increasing the adoption of UK space services;
7. improving government space procurement; 
8. building a skilled space workforce;
9. stimulating international trade;
10. developing the UK’s space ecosystem; and
11. monitoring and evaluation.

Below, we provide a short summary of some of the key goals in the Space Industrial Plan.

Improving Delivery of UK national space capabilities

The development of secure and resilient national space capabilities was a key goal in the National Space Strategy. Key capabilities include space domain awareness, in-orbit servicing, assembly and manufacturing, space data for earth applications, position, navigation and timing, and satellite communication technology.

The Space Industrial Plan therefore sets a vision where the “UK has a full range of space capabilities to successfully deliver the National Space Strategy, securing UK leadership and strategic advance globally, and where the UK has domestic suppliers of critical elements needed for projects and infrastructure”.

To achieve this vision, the plan sets out several “missions” and “actions”. Key to these include:

• Completing a national space capability development plan by Autumn 2024, including roadmaps for delivery of national space capability goals, review of existing capability delivery programmes and mechanisms.
  
  
• The UK government playing a more direct role and intervening to facilitate the development of key capability areas identified, through providing additional support, a more ambitious approach or an accelerated plan to deliver national space capabilities.

Strategic Approach to the European Space Agency

The European Space Agency (ESA) is a non-EU institution, and the UK remains a member of the ESA despite leaving the EU. The Space Industrial Plan recognises that the UK’s ESA contributions account for approximately 70% of the UK’s national civil budget and there is a need to ensure that any funding provided is allocated to areas which directly support national strategic goals.

This will be achieved through a strategic realignment of investment decisions and programme priorities, fostering stronger collaboration with global partners and leveraging the UK’s sector expertise to influence ESA’s future directions.

By focusing on areas where the UK holds competitive advantages and aligning these with ESA’s evolving initiatives, the Space Industrial Plan aims to enhance the UK’s capabilities in the space sector. Additionally, it involves a concerted effort to utilise the European Centre for Space Applications and Telecommunications (ECSAT) effectively, ensuring that investments not only reflect national interests but also bolster the UK’s leadership and innovation in space science and technology.

Enhancing the regulatory environment and sustainable practices for space

The UK government’s vision under this goal is for the UK’s regulatory regime to be world leading and an exemplar framework for safe, secure and sustainable space. Its regulatory environment should be competitive and responsive, enabling innovation, providing transparency to promote growth and attract investment, and positioning the UK to drive global standards for sustainable use of space with international partners.

The UK has already taken steps to achieve this vision through action including: 

• The Sustainable Markets Initiative, which will involve the development of a space sustainability “kitemark”. This will signify to investors and insurers that the holder of the kitemark meets relevant standards, theoretically providing confidence to increasingly risk-averse investors and lowering insurance premiums. Part of the work of the Sustainable Markets Initiative also includes development of a consolidated space sustainability standard. 
  
  
• Proposed enhancements to the licensing regime applicable to UK satellite operators under the Space Industry Act 2018 (SIA) and Outer Space Act 1986 (OSA) consulted on earlier this year under UK Space Agency’s Consultation on orbital liabilities, insurance, charging and space sustainability. Satellite operators holding licences under the SIA or OSA must have their operations insured, and the existing approach to setting the liability limit for such insurance has been to impose a generic limit regardless of the risk of the relevant operations.
  
  This has had the potential to make the UK uncompetitive as a hub for space activity and make UK activities uneconomical for small satellite operators where the risk of operation is not as great as traditional satellite operators. Through its consultation, the UK Space Agency has proposed to introduce a variable liability limit, where the limit actually imposed on an operator will be determined by an operator’s implementation of measures against several specific criterion areas. These include mission specific details (reflecting the actual risk of a mission) and space sustainability policy (incentivising adoption of more sustainable practices by operators).

Boosting UK investment and access to finance

The UK’s goal of boosting UK investment and access to finance in the space sector acknowledges the vital role of private capital in driving growth and innovation.

Due to the limitations of government funding, there is a strategic push to increase private investment in UK space companies. The vision is to establish the UK, and particularly the City of London, as a leading global hub for space financial products and services. This is supported by the UK’s historical strength in attracting seed and early-stage funding, aiming to expand into a market characterized by sufficient, effective growth and scale-up funding. The UK’s goal is to lead space investment in Europe and narrow the gap with the US, enhancing the UK’s position as a pre-eminent centre for space finance.

Central to these efforts are the following “missions” and “actions”:

1. Enhancing the UK’s appeal to secure and maintain scale-up funding for space enterprises, ensuring access to the appropriate types of finance, at the right times, and in volumes sufficient to encourage businesses to establish, remain, and grow in the UK.
2. Directing funding from both national and international private investors into specific UK space capability sub-sectors and firms, to streamline investment processes and optimise the blend of public and private funding in achieving the nation’s space capability objectives.

Improving Government Space Procurement

To enhance the efficiency and coherence of the UK government space procurement, the plan outlines a strategic vision where the government becomes a more knowledgeable and dynamic customer for space technologies.

This aims to facilitate a smoother interaction between civil and defence space procurement and suppliers. The goal is for this streamlined approach to provide companies with better opportunities to secure government contracts, thereby increasing the utilisation of space services.

To fulfil this vision, “missions” up to 2030 include improving the overall coherence and efficiency of government space procurement to facilitate access and simplify the process for both suppliers and public bodies, and designing civil space programmes with flexible delivery mechanisms to maximize strategic project value.

Stimulating International Trade

The Space Industrial Plan introduces a visionary “invest to export” strategy to elevate the UK space sector’s global competitiveness and capitalise on its strong export market. Recognising the sector’s global nature and the high demand for UK space services overseas, where exports constitute 34% of the sector’s total income, the vision is to enhance the UK’s position on the global stage. By fostering prompt and tailored government support, UK-based companies will be empowered to access and seize new commercial opportunities in rapidly growing overseas markets. This strategic approach aims not only to secure a new global market share for the UK but also to solidify the nation’s status as a leader in the global space industry.

Conclusion and next steps

There is much to unpack in relation to each of the Space Industrial Plan’s actionable goals. In the coming months, we will follow up with a series of articles which deep dive into several of these actionable goals.

DLA Piper continues to monitor updates and developments to Ofcom’s work in the satellite and telecoms sector. For further information or if you have any questions, please contact the author.