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The space sector could present commercial opportunities for civil engineering firms due to the terrestrial infrastructure needed to support launch activities, such as utilities and transport connections, and foundations.

In May 2024, a floating road was installed at Sutherland Spaceport to protect the sensitive peat environment at the site. Construction at the spaceport has since been indefinitely suspended.

NCE previously reported that the UK Space Agency planned to spend just £38M on launch-related activities in 2025, down 66% from the £112M it initially committed to in its 2022 corporate plan.

Now, the government has decided to end the semi-independent status of the UK Space Agency, currently an executive agency, sponsored by the Department for Science, Innovation and Technology (DSIT), but now scheduled to become part of DSIT internally.

“People and businesses across the UK will benefit from new changes that will see the UK Space Agency become part of the Department for Science, Innovation and Technology (DSIT) – cutting duplication, reducing bureaucracy, and putting public accountability at the heart of decision-making,” DSIT said in a statement.

“In a major step to boost support for the UK’s space sector, the change will bring together the people who shape space policy and those who deliver it. This will cut any duplication that exists and ensure decisions are made with clear ministerial oversight.

“Taking place by April 2026, the new unit will keep the UK Space Agency (UKSA) name and brand and will be staffed by experts from both organisations. This will drive up efficiency in line with the government’s Plan for Change, cutting red tape and making Whitehall more agile.”

Government emphasises that UK Space Agency brand will still live on

A government source told NCE that the UK Space Agency is not being abolished. It will merge with DSIT’s Space Directorate, forming a new single unit within DSIT responsible for civil space policy and delivery.

The new unit will retain the UK Space Agency name and brand identity. The source said this would boost support for the UK’s space sector by bringing together the people who shape space policy and those who deliver it.

There are no immediate changes to UK Space Agency grants or contracts. Businesses and researchers currently working with the UK Space Agency do not need to take any action.

DSIT allocated £668M to the UK Space Agency in 2025/26. Space funding allocations to March 2030 will be announced in due course.

The source added that the government’s ambition for the UK to be a launching nation is unchanged, and the first launches from SaxaVord in Scotland are expected next year.

Agency chief ‘strongly welcomes’ move by government

UK Space Agency CEO Paul Bate said: “I strongly welcome this improved approach to achieving the government’s space ambitions. Having a single unit with a golden thread through strategy, policy and delivery will make it faster and easier to translate the nation’s space goals into reality.

“In coming together, the UK Space Agency and space policy colleagues are building on the firm foundations of economic growth and capability development laid in recent years, including cutting-edge missions, major national programmes, and the regulations that enable UK launch and leadership in space sustainability.

“We will continue to deliver, while reducing duplication and ensuring we work even more closely with Ministers to support the UK space sector, and the country.”

Ending independence will bring ‘greater focus’ to agency – minister

Space minister 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.

“Bringing things in-house means we can bring much greater integration and focus to everything we are doing while maintaining the scientific expertise and the immense ambition of the sector.”

Union airs concerns about what move could mean for government’s ambitions

The Prospect union has a recognition agreement in place at the UK Space Agency, meaning its members can expect to be consulted with about changes to pay, conditions and policies.

Prospect general secretary Mike Clancy said: “The Government rightly recognises in its industrial strategy that space is a frontier sector critical to future growth. The UK Space sector is an economic success story and the UK Space Agency has played a key role in that.

“There is a real risk that abolishing the Agency sends the wrong signals about the Government’s ambition for the sector, and leads to a loss of specialist knowledge and skills.

“It is important that the Government is clear about the rationale for this move, and how they plan to ensure that the space sector does not lose out as a result. We must not be left in a situation where Britain’s most productive sectors are being hamstrung in order to save tiny amounts of money.”

Industry figures welcome agency being brought in-house

ADS is a trade association for UK aerospace, defence, security and space and represents more than 1,500 businesses.

ADS CEO Kevin Craven said: “We welcome today’s announcement and thank the Department for Science, Innovation and Technology as well as the UK Space Agency for their ongoing candid and constructive dialogue with industry on delivering high-quality outcomes for the UK space sector.

“ADS has long advocated for the joining up of delivery across the whole of government – maximising the value and power of space for the UK by bringing together the policy and delivery landscape.

“This vital restructure will help to ensure our blossoming industry has the appropriate governance needed to support the growth of a sector that already delivers over £7.2 billion to the UK economy and supports more than 50,000 jobs nationwide.

“As this ambitious and vital process begins, our 1,500 members – at least 40% of whom operate in the space domain – are ready to support government in the formation and implementation of this new space unit, which will play a critical role in securing UK advantage globally.”

Orbex is hoping to launch rockets from SaxaVord Spaceport in Scotland.

Orbex CEO Phil Chambers said: “We welcome any effort made to consolidate the UK’s significant resources to drive economic growth in the space sector.

“We look forward to continuing to work with colleagues in DSIT and the UK Space Agency (UKSA) as we strive to build the UK’s sovereign launch capability.”

SaxaVord Spaceport chief executive Scott Hammond said: “This is a very welcome move by the Government.

“I have always argued that a streamlined approach to this new and rapidly growing sector by government, with a clear focus and joined-up delivery, is vital to ensure that everyone operating in it can make most of the opportunities opening up.

“Less red tape and more agility in Whitehall should make government more responsive to our needs and support the economic growth and security that the space industry brings.

“Perhaps the next step is to have a Minister with overall responsiblity for space who can liaise, co-ordinate and collaborate across government.

“Ministers must ensure that the UK is attractive to the numerous native and international businesses looking to launch from our soil.

“The rewards in terms of inward investment and jobs are huge, but to create and maintain a competitive advantage will take a concerted and cohesive effort from both government and the sector.”

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