In a move set to reshape the future of Britain’s space ambitions, the UK government announced on August 20, 2025, that the UK Space Agency (UKSA) will cease to exist as an independent body and instead become part of the Department for Science, Innovation and Technology (DSIT) by April 2026. The decision, positioned as a cost-saving measure and a way to streamline bureaucracy, has sparked both optimism and concern across the nation’s thriving space sector.
The government’s official line is clear: this merger is part of a wider “Plan for Change,” an initiative designed to cut red tape, make Whitehall more agile, and reduce duplication across government. According to the BBC, the move follows a broader review of Arms Length Bodies—commonly known as quangos—with the aim of rooting out unnecessary bureaucracy. The most high-profile casualty so far has been NHS England, whose abolition was announced earlier this year.
For the UKSA, which has operated as an executive agency of DSIT since its founding in 2010, the change means a significant shift in its structure and autonomy. The agency, credited with catalyzing investment and revenue of at least £2.2 billion for the UK space sector in 2024/2025, will retain its name and brand. Its new incarnation will be a unit within DSIT, staffed by experts from both organizations. The government says this integration will bring “much greater integration and focus to everything we are doing while maintaining the scientific expertise and the immense ambition of the sector,” as Space Minister Sir Chris Bryant put it.
Sir Chris Bryant was emphatic about the importance of the space sector to the British economy, stating, “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.” He argued that the government’s aims for growth and security “can’t be met without a vibrant space sector.”
The UK’s space industry, by the numbers, is impressive. It generates an estimated £18.6 billion annually and employs 55,000 people across the country, according to BBC News. The sector’s growth has been fueled, in part, by UKSA’s efforts: from supporting the launch of UK astronaut Tim Peake to the International Space Station, to fostering Britain’s ability to launch small satellites and other payloads from Scotland.
But not everyone is convinced the merger is a step forward. Dr. Simeon Barber of the Open University voiced concerns that scrapping UKSA’s independence could lead to short-term disruption and, over the long run, cause the UK to lose ground to international competitors. “Around the world countries have been recognising the importance of space by setting up national space agencies, and for the government to be scrapping ours seems like a backward step,” he told BBC News. Dr. Barber also warned, “It feels like we’re going to get stuck in the mud again,” referencing the risk of returning to more bureaucratic, less dynamic ways of working that the agency’s original creation was intended to avoid.
Supporters of the merger, however, see it as an opportunity to link strategy, policy, and delivery more efficiently. Dr. Paul Bate, CEO of the UK Space Agency, welcomed the new approach, stating, “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.” He emphasized that the agency and DSIT 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.”
The timing of the announcement coincided with the publication of over 60 industry-led recommendations aimed at improving regulation for space missions, especially Rendezvous and Proximity Operations (RPO)—missions where spacecraft work together in orbit. According to the UKspace IOSM Priorities Paper, these missions could unlock a future market worth £2.7 billion by 2031, with the UK well positioned to capture a quarter of the global market for in-orbit servicing, assembly, and manufacturing. The Stage 1 Report of the Regulatory Sandbox for RPO, published on the same day, is a key step in this direction. Developed in collaboration with Astroscale, ClearSpace, D-Orbit, the Civil Aviation Authority, UK Space Agency, and DSIT, it aims to clarify regulatory bottlenecks and provide a model for future sandboxes supporting innovation in space technologies.
Nick Shave, Managing Director of Astroscale UK, highlighted the transformative potential of these missions: “Rendezvous and Proximity Operations are the foundation of all in-orbit servicing, from life-extension and refuelling to active debris removal—and with the right regulatory framework, the UK can be a global leader in this transformative sector.” Rory Holmes, ClearSpace COO and UK Managing Director, added, “This stage has been pivotal in fostering collaboration between government, regulators, insurers, and operators, enabling stakeholders to address knowledge gaps and reduce uncertainty around licensing in-orbit servicing missions in the UK.”
Lauren Payne, D-Orbit’s UK Legal Counsel, noted that the first stage of the regulatory sandbox “highlighted a range of challenges associated with the licensing of RPO missions under the current regulatory framework, allowing key stakeholders in licensing to work through these real-life challenges in a focussed, neutral forum.” The next stage, she said, will focus on implementation and translating these recommendations into a better regulatory environment for all involved.
Colin Macleod, Head of the Space Regulator at the UK Civil Aviation Authority, summed up the stakes: “RPO is vital for sustainable space but operating satellites at thousands of miles per hour in close proximity brings big challenges. Getting this right unlocks new ways of operating in space, helping the UK space sector grow while operating safely and responsibly.”
For now, the government has assured businesses and researchers that there will be no immediate changes to UKSA grants or contracts, and that DSIT and the agency will work closely over the coming months to ensure a smooth transition. The Stage 1 Report’s recommendations are already being implemented, with Stage 2 set to examine issues unique to RPO missions in greater detail. The findings are expected to support the UK’s first-ever active debris removal mission, planned for launch by 2028—a project that could cement Britain’s role in ensuring safe, sustainable access to space.
As the UK’s space sector stands at this crossroads, the debate continues. Will the new structure deliver on its promise of efficiency and focus, or will it risk stalling the momentum that has made the UK a rising star in the global space race? One thing is certain: the world will be watching as Britain attempts to chart a new course among the stars.
