UK Hydrographic Office decision: executive summary (here)
We’ve got hold of the Ministry of Defence’s executive summary on why the UK HYdrographic Office is not being privatised, and essentially being left as a trading fund.
You can read or download the document from the Free Our Data site (http://www.freeourdata.org.uk/docs/UKHOexecsummary.pdf) – it’s 42KB, so not long.
The principal threat to UKHO’s current model, which is selling paper charts, is set out at the start..
The International Maritime Organisation (IMO) are seeking to mandate digital navigation (an announcement is anticipated around 2010). The UKHO already produces a digital chart series for UK waters fulfilling immediate UK obligations. However, IMO mandation will ultimately cause significant reductions in revenue from its international paper chart series. Additionally the Royal Navy has started conversion to digital navigation, and seeks full coverage by 2011. To support the MOD requirement for international digital charts and ensure financial viability, UKHO must rapidly develop a capability to produce new digital products and services for the global market.
Interesting question: how rapidly can it do that with the limited capital available to a trading fund? Privatisation would give it a chunk of money – but lose the control that the MOD clearly thinks is important. Making it a free data provider (we’d suggest) would mean a bigger capital cost – but then you’d not have to prop it up.
As the final paragraph says…
If the margins and volumes available to the Trading Fund from the evolving digital market proved unsustainable, MOD would have to consider the options for central funding to discharge treaty obligations or in the extreme, transfer critical functions to Government departments. This could lead to UKHO becoming a drain on, rather than a contributor to, the UK Defence budget. Delivery of UKHO’s new digital products is critical to its future success.
The full report isn’t being released – which hasn’t pleased some. More in the Guardian’s Technology section this Thursday.
- The following posts may be related...(the database guesses):
- Yes, why minister? (9 January 2008; score: 52.51%)
- UKHO decision: no selloff; and a year on from CUPI, are we any further ahead? (6 December 2007; score: 37.37%)
- Trading Funds report says: marginal cost is a good thing (12 March 2008; score: 36.31%)
- International expert fun rumbles on (10 November 2009; score: 33.23%)
- Which organisations should we be chasing? Let's make a list.. (16 March 2006; score: 26.36%)
January 8th, 2008 at 12:52 pm
The report also makes clear – before it gets to the paragraph you highlight – that the UKHO subsidises the British Govt (MOD & SOLAS), with a large proportion of that subsidy coming from sales of overseas charts.
If the UKHO were a ‘free data provider’ (presumably of it’s UK data, not this profitable foreign stuff), surely that would reduce the subsidy available to MOD, so MOD i.e. UK costs would go up?
January 8th, 2008 at 1:16 pm
@Peter – it says that “MOD is the single largest customer of UKHO”. (Though sales to UKgov are only 14% of total UKHO revenue.)
UKHO doesn’t subsidise UKgov, surely; it’s a trading fund, so it generates revenue and hands a certain amount back to the Treasury. It’s not *allowed* to “subsidise” anyone, under fair trading rules.
But yes, under a free data regime, one might need to distinguish between UK maritime data and data relating to foreign maritime areas; but as the report summary notes, this is all coming under a lot of pressure with the move to digital navigation rather than paper. UKHO seems to be caught at the inflexion point, and if it can’t move quickly (as OS did when Vanessa Lawrence took over) then as the summary notes, it could get badly left behind.
January 9th, 2008 at 3:52 pm
[...] Interesting question, since you could look at the executive summary on this site and not see much consideration of CUPI – only of the threat to UKHO by digitisation. (Personally I’m reminded of the music industry seeing MP3 being introduced and thinking it might be useful for sound in games…) [...]