Memorandum from Property Intelligence
plc (OS 07)
The Ordnance Survey origins are those of a highly
competent technically-based organisation carrying out a relatively
well-defined task of national importance with public financing
under the umbrella of the Civil Service.
Its remit has now evolved. It is now required
to offer the same technical excellence for certain tasks of national
importance but must also be committed to being more commercially
focussed and making a profit. It has been given a greater measure
of operational freedom to achieve these results.
Transformation of an organisation which is technically
and task orientated with its roots in the Civil Service into a
commercially-driven, market-facing one is a challenge with which
the last three Director Generals have wrestled with varying degrees
However, I would argue that the organisation
remains a hybrid, part private and part public sector both in
terms of business process and culture. The core purpose and the
proper boundaries of its operations are ill-defined and this creates
management anomalies and situations where it is accused of bad
practice in pricing policy and business direction, perhaps unreasonably.
There are potential confusions and conflicts
between the remit of a publicly owned custodian of the national
mapping base and a commercially motivated information supplier
without clear limitations on its operations. This can make it
a difficult organisation with which to engage as a customer/business
On most subjective or objective criteria the
price of maps (eg for planning appeals and guide books) appears
very attractive given the quality and scope of what is on offer
and the crucial importance and value of the associated activity
(eg development or route finding).
Indeed, as a monopoly provider, the OS is in
a strong position to charge more for maps and certain services
up to the point of diminishing returns.
This gives the OS an advantage in developing
new products and services for, whilst the OS can argue that it
is only allowed a relatively limited and fixed overall return
from the sale of its maps and services, it actually has considerable
flexibility to fund new developments through increasing prices
in a manner that is not typically open to the private sector.
Nevertheless, it would be true to say that for
as long as users can argue that OS is a public sector body, so
OS will be subjected to intermittent sniping about the "right
price" and a market-driven pricing strategy will be difficult
What should the overall pricing philosophy be
for OS products and services?
To whom should matters relating to fair pricing
OS product pricing can take "unfair"
advantage from its huge volume of "legacy" data, much
of which requires very little updating and where the cost has
already been amortised through the public purse.
A public sector approach might argue for a consistent
updating strategy with marginal product pricing on an annual cost
basis. A private sector approach would be far more focussed on
the most valuable parts of the data and meeting customer requirements
at an economic price.
What should OS's position be on the sale price
of products which are either no longer being updated or which
no longer have direct costs associated with them?
To what extent is it reasonable for OS to collect
a royalty on any dataset where its mapping has been used as a
backdrop (eg HMLR title deed boundary extents)?
What is the mechanism for OS reducing its prices
in future, for example as data currently collected "second
hand" by OS (eg from developers or local authority planning
departments) becomes increasingly the responsibility of the originators?
If OS is achieving its cost recovery targets
now, then future revenue streams will increase "profit".
In this case how will charges be reduced for existing customers,
for example through Service Level Agreements with the Utilities,
government departments and Local Authorities?
The OS is occasionally accused of using differential
pricing and its commercial arrangements are sometimes shrouded
in secrecy. In some private sector environments this would be
considered normal but, if OS is a public sector organisation,
uncertainty over others' commercial arrangements is felt to be
How can OS ensure the pricing policy and philosophy
for all its products and new developments are entirely transparent?
For as long as there is uncertainty about OS's
positioning in the private or public sector, so customers will
have uncertainty about how OS will decide its pricing strategy
and thus potential costs of updating and maintaining customer
databases. A lack of concentrated customer focus will also risk
new technical developments being driven by the production needs
of OS rather than the needs of the market.
Should OS be driven by the needs of its customers,
the aims of its self-set commercial objectives, or a set of national
tasks given by Government?
The proper boundaries of OS business operations
are unclear. The OS stated objective is to become the GB's provider
of preference for geographic information. This carries the immediate
risk to all those fledgling data-providers already working in
this area that their enterprise may be swamped by a public organisation
with an overwhelming degree of monopolistic legacy data and relatively
flexible financial muscle.
Thus, far from being a benign public sector
influence encouraging and supporting the developing geographic
industry in GB, the OS, for as long as it is a hybrid, is an important
risk factor to be considered by any new enterprise within the
What are the proper boundaries for OS activities
and how can these be clearly and publicly defined to allay concerns
about unfair competition or misuse of a monopoly?
It is unclear who decides what products OS may
supply as a monopoly producer and where it should properly compete
with the private sector and how cross-subsidy can be avoided (eg
Companies may be over-sensitive about complaining
to the OS about issues of pricing or business practice in circumstances
where the OS is a monopoly provider of a large part of the raw
material supporting their business.
Where partners, customers or competitors feel
aggrieved and do not obtain satisfaction from the OS should there
be a regulator/Ombudsman to whom they can refer their concerns?
The OS has a crucial role to play within the
national information infrastructure as a benign partner or leader
to many projects relating to cartography. Whilst this may require
private-sector know-how and commercial judgement it also requires
sensitive handling which the setting of ambitious commercial targets
by Ministers may undermine.
Should there be an automatic annual independent
review of OS's consultation mechanisms, new product developments,
new and existing partnerships and licensing arrangements?
A hybrid also suffers from organisational anomalies.
For example, if OS is a commercially-driven organisation then,
within the private sector, it would be considered bad practice
for the Director General to be the Geographic Advisor to its largest
customer, the Government.
If the Ordnance Survey is to thrive in the commercial
sector then it must be able to offer the best private sector reward
packages and not be limited to Civil Service Scales. Its people
need to ensure the organisation is commercially self-confident
and market-facing. There are too few senior staff in OS with private
sector experience to ensure this will happen swiftly.
I am unaware of the background to the Inquiry
but technically the production of maps for electioneering should
be straightforward. OS is able to produce at one level, for example,
a map of a Ward. At a second level this could be enhanced with
symbols to indicate the properties with electors (once the Electoral
Registers are linked to the National Land & Property Gazetteer).
At a third level, those with the requisite authority, could have
access to the names of the occupants for each of the properties
as recorded on the Electoral Register.
One of the objectives of the LASER (Local Authority
Secure Electoral Roll) project is to bring rigour and security
to the whole electoral process. Part of this will result in much
clearer decisions through Parliamentary action (rather than the
Data Protection Act) as to who has access to what information.
The funding of the mapping element may be obscure;
however, if the DTLR is the responsible body for the election
process, surely it is covered to produce the maps it needs under
the terms of the Central Government/Ordnance Survey SLA?
If Electoral Maps are required for the political
parties then surely they are either covered by the Electoral Process
under the DTLR (the Electoral Commission) or would need to be
covered by a licence with OS for this purpose?
1. The proper boundaries of OS activity
should be clearly circumscribed, and probably restricted to the
collection and sale of topographic data and cartographic products
alone. This would enable an organisational core purpose to be
defined which could be properly understood by third parties. It
would also make the organisation easier to manage without restricting
the OS's opportunity to enter into partnershipsindeed it
should make those partnerships less potentially contentious and
easier to frame;
2. The commercial terms of reference should
follow-on, establishing the basis on which OS pricing policy should
be constructed and how its relationship with their clients should
3. There be an automatic review, run externally,
to test the effectiveness and desirability of OS's consultation
mechanisms, new product developments, new and existing partnerships
and licensing arrangements; and
4. An independent authority should be appointed
to whom companies may refer where they feel these operational
boundaries or the pricing policy are being breached. This authority
might also act as the Government's independent GI adviser.