The United Kingdom’s space sector, a vibrant industry generating billions and employing tens of thousands, is facing a fundamental shift. The government has announced that the UK Space Agency (UKSA), established in 2010 to spearhead the nation’s ambitions in space, will lose its independent status and be absorbed into the Department for Science, Innovation and Technology (DSIT) by April 2026. This move, part of the Labour government’s sweeping Plan for Change, is intended to cut costs, reduce bureaucracy, and make government operations more agile and efficient. But while ministers tout benefits like streamlined decision-making and greater ministerial oversight, leading voices in the industry are sounding alarms about the risks this poses to the UK’s global standing in space.
Currently, the UK Space Agency operates as an executive agency of DSIT, but retains its own identity and independence. Under the new arrangement, the agency will become a unit within DSIT, staffed by experts from both organizations and retaining the UKSA name and brand. The government claims this will “bring together the people who shape space policy and those who deliver it,” stating that such integration will “cut any duplication that exists and ensure decisions are made with clear ministerial oversight.” According to DSIT, “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.” The abolition of NHS England, described as the world’s largest quango, was announced earlier this year as part of the same process.
Space Minister Sir Chris Bryant has been a vocal advocate for the change, arguing that bringing the agency in-house will foster “much greater integration and focus to everything we are doing while maintaining the scientific expertise and the immense ambition of the sector.” He highlighted the sector’s importance, 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.”
Indeed, the UK space industry is one of the country’s fastest-growing, generating around £18.6 billion annually and employing more than 55,000 people, as reported by BBC News and other outlets. Since its founding, the UK Space Agency has overseen major milestones: from advances in satellite technology and the development of Scottish launch sites, to the historic 2015 mission of Tim Peake, the first British astronaut to serve on the International Space Station. The agency’s work has helped deliver cutting-edge missions, grow the small satellite industry, and catalyze investment and revenue of at least £2.2 billion for the sector in 2024-25 alone.
Yet, for all the government’s assurances, the decision has drawn sharp criticism from many within the sector. UK SpaceTech scaleup Magdrive described the closure of UKSA as an independent body as “deeply concerning for the UK space sector.” In a statement, the company warned, “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.”
Magdrive’s concerns are echoed by Dr Simeon Barber of the Open University, who warned that scrapping UKSA would lead to Britain’s space sector “losing focus.” Barber told BBC News, “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 backwards step.” He added, “It feels like we’re going to get stuck in the mud again.” Supporters of the space agency fear that moving its operations into Whitehall will result in a more bureaucratic, less dynamic approach—precisely the circumstances that led to the creation of the agency in the first place.
Prospect general secretary Mike Clancy also weighed in, warning that the move might lead to a loss of specialist skills. “The government rightly recognises in its industrial strategy that space is a frontier sector critical to future growth,” Clancy said. “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.”
Despite these worries, some inside the agency see opportunity in the change. UK Space Agency CEO Dr Paul Bate welcomed the move as “an improved approach to achieving the government’s space ambitions.” He said, “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 timing of the announcement coincided with the publication of over 60 recommendations from industry leaders on how to improve regulation for space missions, including Rendezvous and Proximity Operations—where spacecraft work together in orbit. This underscores the sector’s ongoing innovation and the need for nimble, forward-thinking oversight.
Ultimately, the government’s cost-cutting agenda, which has already targeted NHS England and other public bodies, is reshaping how the UK approaches strategic sectors like space. Ministers insist that the new arrangement will provide clearer direction and better coordination, but critics warn that the loss of independence could dilute the focus and dynamism that have driven the UK’s recent successes in space. As the sector continues to grow and international competition intensifies, the coming years will reveal whether this bold restructuring helps or hinders Britain’s place in the final frontier.
