The government’s move to absorb the UK Space Agency into the Department for Science, Innovation and Technology has been described as “deeply concerning” by a leading UK SpaceTech scaleup.
Currently an executive agency of the DSIT, it is being cut as an independent entity from April 2026 in a cost-cutting exercise.
The move is part of the Labour government’s Plan for Change to cut red tape and make Whitehall more agile and efficient.
“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,” it stated.
“Every ‘arms-length body’ across government is being reviewed with a view to rooting out unnecessary bureaucracy and duplication, and to put public accountability first.
“Ministers have already announced that NHS England, the largest quango in the world, will be abolished as part of this process.”
The new unit will keep the UK Space Agency (UKSA) name and brand and will be staffed by experts from both organisations.
In a statement, UK SpaceTech Magdrive responded: “The closure of the UK Space Agency as an independent body is deeply concerning for the UK space sector.
“While the government positions this as a cost-saving and efficiency measure, the reality is that dissolving the agency risks undoing more than a decade of hard-won progress.
“UKSA has provided focus, coordination, and credibility on the global stage. It helped deliver milestones such as Tim Peake’s mission, the growth of the UK’s small satellite industry, and the emergence of a domestic launch capability.
“Crucially, it gave innovative companies confidence that space was a government priority worth investing in. Folding this into a wider department may bring ministerial oversight, but it also risks space being lost among competing agendas.
“This is not simply about prestige. Space is a critical infrastructure pillar, it underpins communications, navigation, climate science, defence, and trade. If support for the sector dilutes, the UK will lose ground to international competitors who are doubling down with dedicated agencies.
“Companies like Magdrive will increasingly be forced to seek opportunities abroad, meaning the UK misses out on the jobs, innovation, and economic growth that should stay here.
“The message this sends is stark: at a time when other nations are elevating space, the UK is downgrading it. We urge the government to ensure this move does not sideline a sector worth £18.6bn a year, and to make clear that space will continue to receive the priority, funding, and strategic clarity it urgently requires.”
Today also sees the publication of over 60 recommendations from industry leaders on how to improve regulation for space missions, including Rendezvous and Proximity Operations (RPO) – where spacecraft work together in orbit.
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.
“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.”
UK Space Agency CEO Dr Paul Bate (pictured) added: “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.”
The UK Space Agency was founded in 2010 and claims to have catalysed investment and revenue of at least £2.2bn for the UK space sector in 2024-25.
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