Examination of Witnesses (Questions 20
TUESDAY 15 JANUARY 2002
20. What do you say to allegations, for example,
that Ordnance Survey has misused public money by using NIMSA to
fund the aerial photography layer of OS Master Map because, as
you know Getmapping have claimed that the idea was developed and
created by themselves in the commercial sector?
(Ms Lawrence) May I mention to the Committee before
I turn to David to answer that question that we are in the middle
of a procurement process which is under OJEC regulations, so we
are not at liberty, so I am led to believe, to reveal commercial
relationships and some of those detailed negotiations. There are
three tenders within one part of the OJEC system at the moment
Chairman: But that is not really the point;
it was about someone else doing the commercial work.
21. Does that tendering relate to the imagery
(Ms Lawrence) It does. I think we are able to answer
some of your question. I just want the Committee to be aware.
(Mr Willey) Certainly there has been no misuse of
public funds whatsoever. The black and white imagery is used because
it is part of our production process and has been for many years.
Indeed NIMSA does pay to help that production process but NIMSA
funds are not being used in any way to produce the coloured imagery
that will become our imagery layer in part of OS Master Map. This
is not what NIMSA is about. It is just to fund the production
process which ensures that our mapping is kept up to date. It
is not to fund the imagery layer.
22. So when Getmapping claims that NIMSA funds
have been used to finance the most intensive programme of aerial
survey work ever undertaken by OS, is that not correct?
(Mr Willey) It is correct that we have a very intensive
aerial survey programme but that is different from providing images
to produce an imagery layer in OS Master Map. It is part of our
23. Wait a minute. When the plane flies over
presumably it takes black and white and colour pictures. How do
you apportion out the costs of the flying between the colour and
the black and white?
(Mr Willey) The black and white imagery is indeed
something that NIMSA does contribute as part of the production
process. Where we are taking colour imagery there will be a difference
in cost between colour imagery and black and white. It is not
necessarily any more for colour imagery.
24. I can understand the difference in the cost
between the colour and the black and white, but with regard to
the plane that you take up, presumably loaded with more than one
camera, who pays for the plane? How do you apportion it between
the cost of the colour and the cost of the black and white?
(Mr Willey) NIMSA contributes to flying that plane,
but so does our commercial revenue. The majority of the funding
for most of those activities is funded by our commercial operations
and not by NIMSA.
(Ms Lawrence) May I add one point to that? On the
imagery layer, it has been openly discussed in the press that
the tender that we currently have out for imagery procurement
is to procure from our partners other imagery that is available
in this country. It is, I imagine, impossible for one organisation
to just contribute to an imagery layer within the same timescale
because we do not have enough cloud-free days in this country.
What we also believe is that there will be an imagery snapshot
where you will have what it looks like in 2002, and 2003 would
be a different set of imagery.
25. As I understand it, Getmapping are saying
that the imagery layer is essentially identical to the Millennium
Map that they produced and that OS is saying that this is not
the case; it is not essentially identical. Could you elaborate
on that and perhaps the specifications that Getmapping believe
have been put in to prevent them being able to tender for the
(Ms Lawrence) Perhaps I can answer the first part
and then for the second pass to my colleague Mr Erskine. When
collecting imagery you are collecting effectively a layer made
up of picture elements called pixels. That is called raster technology.
There are two ways of correcting this to take account of the fact
that the earth is not flat. The first is that you are able to
warp the picture elements to fit with the map. Another way is
where you actually completely rectify it to the actual landscape.
One is called ortho-rectification; one is called geo-rectification.
Geo-rectification is the one where you warp it to the map. Certainly
the Royal Institute of Chartered Surveyors specification for imagery,
is 25cm resolution, which is the one we are collecting at and
ortho-rectified imagery is what we have specified. We do not know
from our findings of any other national mapping agency who has
decided to go the geo-rectified way we also had intensive discussions
with customers, particularly in the government sector, and asked
them what they wanted. They wanted us to provide them with ortho-rectified
data, which is what our specification is, and they also wanted
it to be fully maintained, as I was explaining to you, regarding
the layers. They want it maintaining not just for the economic
areas but also the uneconomic areas so that there will be a full
national layer. We have evidence also that, for instance, one
summer a couple of years ago there were a number of government
agencies who, for their own reasons, flew the same area of geography
in this country, an area that would be classed as uneconomic,
and they very much stated that their reason for flying it was
that there was not a national available fully maintained image
that would definitely still be here in ten or 15 years time or
whatever, and so they were very encouraging of us to do this.
My colleague Mr Erskine who is leading on this may have other
things to say.
(Mr Erskine) I would just reiterate really what Ms
Lawrence has said.
26. I do not think there is a need to reiterate.
We are quite pressed for time. If you disagree by all means go
(Mr Erskine) The only extra point that I would add,
apart from the fact that other national mapping agencies use this
specification, is that we are being driven by customers telling
us what they want from the specification, and the fact that we
believe geo-rectified imagery is not as easy to maintain consistently
as ortho-rectified imagery because the way that you do the warping
on the geo-rectified may be different depending on where the plane
happens to be flying, the position of the camera and how you do
the warping, and therefore we believe that, as our customers want
it, it is easier to get a consistent update from ortho-rectified
27. So what you are saying categorically to
us is that you are not using public funds to compete with the
(Ms Lawrence) Yes, that is what we are saying.
28. Can I move back to pricing, particularly
for your maps, because there certainly has been some criticism,
not least from the Ramblers Association, that the cost of paper
maps has gone through the roof whereas charges for services that
you are mainly providing to the business sector have been reduced.
Could you comment on that?
(Ms Lawrence) First of all we are in a highly competitive
market place as I have mentioned for both our paper mapping and
our digital mapping. Our status very much requires us to make
a return on our investment. We have two different pricing mechanisms
and I would like to pass to my colleague to discuss the paper
mapping one, but the two main models are very much that there
is an annual licence for the digital data and for certain other
things including paper maps it is very much just transaction pricing.
(Mr Erskine) Specifically on paper maps, perhaps I
could start by putting into context that there have been some
quite significant increases in some of the paper mapping. Our
most popular paper maps, which are the Outdoor Leisure maps, only
went up by 3.5 per cent rather than all of the maps going up the
same amount. The Road and Touring maps that we sell only went
up by 1 per cent. There has been a range of increases rather than
them all going up the same. The major paper mapping series that
we produce actually make a loss and have done for some time.
29. How much?
(Mr Erskine) The Explorer mapping series is about
40 per cent; Landranger now is about 2 per cent.
30. 40 per cent?
(Mr Erskine) Yes.
(Ms Lawrence) Can I also mention that I believe you,
Steve, told me that before we put the price up of Explorer maps
over 60 per cent of them were going to make a loss.
(Mr Erskine) Yes. The point I am making is that because
we are the national mapping agency in Great Britain we believe
absolutely that what we should be providing is mapping for the
whole country and we should do that to a specific specification
and to a consistent pricing model as well. We do not charge different
prices because a map happens to be more popular in one area than
another. It makes a loss. We believe that national coverage is
part of our remit and is done for the national good, and we believe
it is right to have a consistent pricing and specification. Of
course we also have to work with our retail partners to make sure
that the mapping is available in as wide a range of outlets as
possible and we have to take into account how the retailers are
driven to sell their shelf space. We do not want to have one or
two maps available in a retail outlet. We want as wide a range
of the stock available as is possible which of course puts pressure
on the shelf space. We also have to give reasonable margins to
those retail outlets. We are dealing with a whole range of retail
outlets from the larger ones such as Waterstones and WH Smiths
to much smaller bookshops in some of the areas where mapping is
not quite so available. To be absolutely frank, for what we have
now and where we have much more clearly differentiated between
products and different paper maps, I think what we are asking
for is a fair price for what I would regard as some of the best
maps in the world.
31. Do you not feel though that there is an
argument that paper maps, because they enable you to fulfil your
national interest role, should therefore be eligible if you like
for subsidy under NIMSA?
(Ms Lawrence) Perhaps I could answer first. Certainly
at the moment NIMSA does not cover any product. It only covers
maintenance or some services such as mapping and surveying of
32. Could you comment on whether you think it
should perhaps in order to keep the paper maps affordable and
accessible wherever you are in the country?
(Ms Lawrence) We have thought about this, whether
NIMSA could be extended to cover some of those maps, some of which
sell less than ten copies per annum I believe, but we still maintain
them when necessary under our regular maintenance programme. It
is important that they are available if they are needed for emergency
use or if people wish to have leisure in those spaces. Sometimes
it would be helpful if they would just buy a new map rather than
use their old one. Yes, I do think it would be most helpful in
the uneconomic areas.
We work very closely with retailers to ensure that there is as
much stock available in your high street as possible. Some of
our retailers carry some of these maps that are not bought so
often but there is a complete range if you go into most high streets.
Reducing the price drastically would not be of help to the retailer
because they are valuing their shelf space per half metre today.
I have made a commitment that while I am Director General we will
do our best to continue to have two national series: the Explorer
map and the Landranger map because I believe, as does the whole
Board, that we are here to have two national series but yes, it
is a problem that so many of them make no contribution or make
a loss to this business.
33. I come to the issue of more investment which
you referred to at the beginning. Who is going to pay for the
(Ms Lawrence) Certainly we see that the need for location
data is an expanding market and we believe that more people will
be using that data and so we expect to have more customers. The
answer must be that we are providing data to our customers and
they will be giving us a return for the products that we produce
together with our partners. Our Partner Programme has been launched
in order to expand and attract more partners than ever before
to work with our data. We have traditionally had people from the
geographic information industry. Now we are seeing all the new
location based providers most interested in working with us or
through other partners and so on, and we see this as more of an
34. So in shorthand it is more product and more
customers rather than increases in prices that are going to pay
(Ms Lawrence) That is how we see it.
35. In terms of the investment you are going
to be looking for freedom to borrow. Have you any idea over how
long a time you are looking to recover the costs of borrowing
as a business plan?
(Mr Willey) Typically within two or three years, or
even faster than that. For example, in some of our products we
would certainly be looking at faster turn times than that. Something
like a building, for example, may be rather slow, but those are
the sorts of timescales that we are talking about.
36. Presumably some of the investment you are
embarking on might not produce the new products for some years
down the line.
(Mr Willey) That may have been the case ten years
ago. Now we would be looking at much faster timescales than that.
37. You are actually looking at persuading pensioners
to pay a bit more for the common maps, are you not, in order to
provide the investment so that at some time in the future someone
with one of these mobile gadgets will be able to get their map
from a satellite?
(Ms Lawrence) I would like to refute that if I may,
most certainly. We also are very careful to make sure we do not
cross-subsidise across our products anyway, Mr Bennett, so the
answer is definitely no.
38. So you are not raising the money for your
new ventures out of present products?
(Ms Lawrence) We have talked about our paper mapping
and we have talked about the fact that overall many of them make
a loss. Our income from there goes into supporting the national
39. Some of them make a loss but some of them
make a very nice profit, do they not? Outdoor Leisure maps all
make a profit, do they not?
(Mr Erskine) In fact Outdoor Leisure maps, the series
as a whole, just about break even, or make a very small loss.
1 We hire two aeroplanes, one of which is equipped
with two cameras. However since June 2001 each plane has only
captured coloured imagery. Back
Although it would be helpful it could not subsidise the product
price as this may be contrary to competition law. Back