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Revealed: MoD and UK’s chief scientific adviser weren’t consulted on £400m OneWeb deal

The government did not consult its most senior scientific adviser, Sir Patrick Vallance, or the Ministry of Defence (MoD), before embarking on a controversial £400m acquisition of the bankrupt satellite company OneWeb, NS Tech can reveal.

The deal represents one of the largest scientific investments in recent British history and has been justified for its potential military applications.

Ministers forced through the deal last month despite objections from the business department’s most senior civil servant and warnings that the government may never see a return on the investment.

In a letter to the business secretary, Alok Sharma, the department’s then acting permanent secretary, Sam Beckett, said that she was not satisfied that “this investment meets the requirements for Value for Money as set out in Managing Public Money”. Sharma issued a ministerial direction pushing through the deal in light of Beckett’s objection.

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Some experts have warned that the government is likely to lose all of the money it puts into the deal and then more building out OneWeb’s constellation. Beckett said the UK Space Agency (UKSA) said there was a “high likelihood of further investment being required to complete the constellation and encourage user uptake of the services”.

“As a result, UKSA’s judgement is that the independent technical assessment further illustrates the considerable uncertainties in the modelling done for HM Treasury,” Beckett told Sharma before the deal was approved. OneWeb’s founder and executive chairman Greg Wyler told Aviation Today in April that the company was burning through $50m to $100m a month before it went bankrupt in March.

The government’s decision to exclude the MoD and its most senior scientific adviser from the decision-making process, while ignoring the advice of a senior civil servant and the UKSA, is likely to cast further doubt over a project that has already attracted significant scrutiny.

Experts have also raised questions about the motives for the deal, which was made as part of a consortium including the Indian telecoms company Bharti Global and was reportedly driven by Dominic Cummings, the prime minister’s most senior aide. The government hopes the deal will provide a substitute for the EU’s Galileo satellite navigation system, which is used for military purposes, boost the UK’s commercial space sector and even accelerate the roll-out of gigabit broadband networks.

The government had pledged to spend £5bn building a sovereign satellite navigation system for defence applications to rival the EU’s Galileo programme, which the UK will be ejected from following Brexit. By comparison, the £400m OneWeb deal may seem like good value, but experts say that there is no proof that the kind of low-earth-orbit satellites developed by OneWeb or Elon Musk’s SpaceX are capable of providing the level of accuracy required for satellite navigation.

One source close to the discussions said the Ministry of Defence was furious that the deal was approved because it hadn’t been consulted, there was no proof OneWeb’s low-earth-orbit constellation could replace Galileo and, even if it could, the satellites’ proximity to earth meant they could potentially be shot down.

The Sunday Telegraph reported last month that the National Security Strategic Investment Fund, a little-known agency launched by Philip Hammond in 2017, was one of the biggest proponents of the deal. But the government’s decision to involve NSSIF, but not the MoD, may raise eyebrows in Westminster.

There is also some uncertainty about the government’s motivations for the deal. While OneWeb was initially framed as a replacement for Galileo, a source said Downing Street has since pivoted to marketing the deal as a way of delivering satellite broadband to parts of the country that are otherwise difficult to connect. However, the cost of the necessary receivers – at up to £20,000 each – is expected to be prohibitively expensive. The about-turn also raises questions about why the deal was led by the business department rather than the department for digital and culture, which leads on broadband policy.

Darren Jones, the Labour MP and chair of the business select committee, which has opened an inquiry into the OneWeb deal, said the chief scientific adviser “should be consulted in advance of ministers making decisions, especially when it involves nearly half a billion pounds of taxpayers’ money. Meanwhile the space agency was consulted but they didn’t have confidence in the technical capacity of OneWeb to meet the UK’s objectives, which is why the ministerial direction had to be issued.”

According to the government’s website, Vallance’s role, which has gained prominence during the coronavirus crisis, is to provide “scientific advice to the Prime Minister and members of cabinet” and advise “the government on aspects of policy on science and technology”.

A spokesperson for the department for business told NS Tech: “The government commissioned expert advice to provide detailed scrutiny of the scientific and commercial rationale for the investment in OneWeb.

“The business secretary considered this advice and made the decision to invest in this unique opportunity to put the UK at the cutting edge of the latest advances in space technology.”