UK space sector benefits from uptick in ESA contracts
March 11, 2025
The UK’s space sector secured an additional £112m in contracts from the European Space Agency (ESA) between June 2022 and December 2024, the UK Space Agency has announced.
The boost in funding is anticipated to generate £1bn in broader economic benefits for the country.
As a founding member and major contributor to ESA, the UK operates under the agency’s geographical return policy, ensuring that member states receive industrial contracts proportionate to their investments.
However, in 2022, UK space organisations were receiving 93p back in contracts for every £1 invested, after overheads.
To address this shortfall, the UK Space Agency, with ESA’s support, initiated measures to improve returns. These efforts culminated in the fourth quarter of 2024, when the UK secured £80 million (€96 million) in additional contracts—the highest single-quarter return recorded by an ESA member state.
Overall, from June 2022 to the end of 2024, the UK obtained £844 million (€1.01 billion) in ESA contracts, surpassing the expected £732 million.
The extra £112 million is expected to enhance the competitiveness of the UK’s space sector, aiding businesses in attracting private investment, developing advanced technologies, and expanding internationally. This progress means the UK now receives 99p back in contracts for every £1 invested, after overheads.
In 2022, the UK Space Agency identified several factors contributing to the deficit, including high resource requirements for applying for ESA funding, limited awareness of UK contributions, and challenges faced by smaller companies in engaging effectively with ESA. To tackle these issues, a joint UK Space Agency-ESA Industrial Policy Task Force was established, leading to additional contracts and improved access to expertise for UK space companies.
The agency conducted 21 training courses across the UK, promoted existing ESA resources, and implemented a new internal data tool for a comprehensive overview of the UK’s ESA portfolio. Increased industry engagement resulted in the UK having the most registered entities on ESA’s procurement platform and the highest number of small and medium-sized enterprises in the ESA ecosystem.
Science Secretary Peter Kyle said: “These figures show not only the incredible results of a government working hand-in-glove with industry to get even more bang for our buck, but also send a clear message to the private sector across the globe: when it comes to space, science and tech, the UK is a powerhouse for innovation and investment.
“We are on a mission to deliver sustained economic growth, and it is fantastic to see such a vital industry helping us turbocharge our Plan for Change, ultimately raising living standards for everyone.”
Dr Paul Bate, CEO of the UK Space Agency, added: “While the value to the UK economy of our membership of ESA is many times greater than the sums invested, it is important for us to demonstrate the UK’s competitiveness in securing industrial contracts.
“First and foremost, the record figures announced today are down to the efforts of the UK space sector, so I would like to congratulate all those working on the new contracts. I would also like to thank the teams in ESA and the UK Space Agency for their hard work in delivering this exceptional result.”
