Space Minister Chris Bryant said the decision would result in “much greater integration and focus” while “maintaining the scientific expertise and the immense ambition of the sector.”
Founded in 2010, the organization currently operates as an executive agency of DSIT.
The folding of the agency is part of a push by Prime Minister Keir Starmer and his Whitehall chief Pat McFadden to review arms-length bodies across government with a view to “rooting out unnecessary bureaucracy and duplication.”
The announcement was published alongside 60 recommendations from industry leaders on how to improve regulation for space missions, which the government said were “key” to unlocking a market estimated to be worth £2.7 billion by 2031.
It added that with the “right support,” the U.K. space industry could capture a quarter of the global market for in-orbit servicing, assembly, and manufacturing.
While the move was praised by several industry leaders, space scientist Dr Simeon Barber told the BBC that the move “seems like a backward step” and could result in Britain’s space sector “losing focus” at a time when other countries are establishing national space agencies.
Agency boss Paul Bate welcomed the decision, saying that a “single unit with a golden thread through strategy, policy and delivery” would make it “faster and easier to translate the nation’s space goals into reality.”