UK Space Conference ponders Brexit uncertainty

Delegates at the biennial UK Space Conference, taking place this week in Manchester, have been considering the impact of Brexit on the UK space sector which is aiming to capture a 10 per cent share of the global space market by 2030.

In an interview with the FT, Jan Wörner, the head of the European Space Agency (ESA), warned that British companies wanting to take part in EU-funded space programmes may have to set up subsidiaries in mainland Europe to retain access.

Commenting on the issues being discussed at the conference, Mark Nisbett, a space sector specialist in RSM’s technology team said:

‘Many companies at the UK Space conference this week are considering their response to Brexit. All agree there are a wide range of considerations in what remains – and probably will remain for a couple of years – a very uncertain time.

‘Clearly the UK space sector will be hoping for an early agreement during the Brexit negotiations on the UK’s continued participation in EU-funded programmes in the future.

‘However, British companies currently wishing to tender for ESA work relating to EU-funded programmes such as Galileo and Copernicus are in a bind. They can tender but face the prospect of losing their contracts when Britain leaves the EU. Not only that, they run the risk of having to pay for the costs of finding replacement providers. Understandably, many are thinking hard about tendering.

‘UK space companies are, where possible, prioritising commercially sensible contracts on specific EU-funded ESA projects. Some are considering if they need to set up a subsidiary and where that should be. Each EU country has its own advantages and disadvantages across tax, regulation, ease of doing business, flexibility, workforce and clients. Other considerations will include retaining talent within the organisation, how contracts are structured and, fundamentally, not losing the core focus on the wider customer base and its needs.

‘Despite the cloud of Brexit uncertainty, the mood at the conference has nevertheless been quite upbeat. The UK remains the third largest contributor to the European Space Agency and plays an increasingly important role in the ESA’s space programmes. There has also been a real buzz around the prospect of the UK’s first spaceport which could come into operation as early as the 2020s.’