Select Committee on Transport, Local Government and the Regions Appendices to the Minutes of Evidence

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 of success.

  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 partner.


  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 to attain.

  What should the overall pricing philosophy be for OS products and services?

  To whom should matters relating to fair pricing be addressed?

  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 inappropriate.

  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 GI sector.

  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 NIMSA funding).

  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 partnerships—indeed 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 work;

  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.

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