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Fun facts from the DCLG / OS consultation

A few things that strike us as we read through the consultation and impact assessment (links in previous posts).

Impact assessment:

Ordnance Survey generates most of its revenue from business and the public sector; in 2008/9 they each accounted for 46 per cent of the organisation’s total revenue. Consumers, through the sale of paper maps in retailing channels, accounted for the remaining 8 per cent of sales.

Impact assessment:

Ordnance Survey generates revenues from its products through licensing arrangements either directly with customers, or indirectly through licensed partners and through retail distributors. The direct customer channel accounts for two-thirds of Ordnance Survey’s trading revenue and includes various collective purchase agreements and major private sector users such as the utility companies. Approximately 25 per cent of Ordnance Survey’s trading revenue is generated though the indirect partner channel.

Impact assessment:

Separately, there are imbalances in Ordnance Survey’s current pricing model which may be causing inefficient allocation of resources. Firstly, Ordnance Survey currently charges private sector customers of its large-scale products significantly more than comparable government customers. The higher prices being paid by the private sector may potentially have restricted consumption to the less price sensitive users, impacting the economic benefit to the economy. Secondly, the payment allocation mechanism employed by government generates a weak price signal to Ordnance Survey from individual government users within the collective agreements.

Now that’s a really interesting one. Private sector pays more than government? I hadn’t heard that before. Payment mechanism generates a weak price signal?

Impact assessment:

[OS] already has a cost reduction programme underway as part of its existing business strategy, but any long-term strategic option would seek to introduce a framework that enhances cost transparency and provides incentives to pursue further efficiency gains.

More as we come across them…

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