The UK is making a grave mistake merging its UK Space Agency (UKSA) into the Department for Science, Innovation And Technology (DSIT), according to leading space economist Dr Armen V. Papazian.
Britain’s government announced the cost-cutting plans today, claiming the merger of UKSA into the DSIT by April 2026 would “cut red tape” and would help streamline support for the UK’s growing space industry. The government also published 60 recommendations from industry on how to improve regulations for space missions and unlock, it says, a market worth GBP2.7 billion by 2031.
But Dr Papazian, author of Financing the Race to Space and Co-founder and Director of the Space Value Foundation, says raising UK’s space ambitions cannot rely on old thinking.
“Instead of reinventing the defunct policy framework that has led to 14 years of austerity, higher taxes, and even higher debts… some more of the same unimaginative and growth-hindering policies are being put in place in the name of a theoretical and policy framework that is fundamentally inadequate,” Dr Papazian wrote on a space forum.
Dr Papazian has proposed a New Outer Space Deal “that could inject the many billions needed to raise the UK’s space ambitions, through the UKSA. To achieve such a change, however, we must, once again, reinvent the financial and monetary economics that has ‘justified’ the current policy matrix,” he says. Specific proposals from Dr Papazian include “new non-debt high space value instruments”, dubbed as Public Capitalisation Notes (PCNs).
This way, the UKSA “can be a vehicle to fund economy-wide investments into the sector, and the wider economy,” he says.
The UK government insists the shuttering of an independent UKSA will be good for the space business.
“With the right support, UK space firms could capture a quarter of the global market for in-orbit servicing, assembly and manufacturing,” says a government statement.
Space Minister Sir Chris Bryant said “You don’t need to be a rocket scientist to see the importance of space to the British economy. This is a sector that pulls investment into the UK, and supports tens of thousands of skilled jobs right across the country, while nearly a fifth of our GDP is dependent on satellites. The aims for growth and security at the heart of our Plan for Change can’t be met without a vibrant space sector.”
But Dr Papazian says the change is “by no means an assurance that inefficiencies will actually be eliminated.”
“Although, it is certain that the opportunity to fund and build a powerful and effective space agency that can lead the UK space sector into the future will be missed,” he told Space Tech Finance by email.
Just last year UKSA expanded with four new bases across the UK and built a new headquarters, aiming at enhancing links with the private sector. It is not clear whether these new bases and headquarters will remain under the new regime.
The ”sandbox” report released today was written by three private firms, Astroscale, ClearSpace and D-Orbit, working in collaboration with the Civil Aviation Authority, the UK Space Agency and DSIT. The focus is upon in-orbit servicing, clean up and satellite life-extension.
