Scotland’s space industry is set to receive a funding boost under new plans from the UK Government aimed at backing breakthrough technologies and a faster route to commercialisation.

Universities across Scotland will team up with partners around the UK to receive a share of £3.8 million under the National Space Innovation Programme, aimed at developing new tools and systems for secure communications, environmental monitoring, and navigation. 

Among the projects awarded funding are a partnership between Edinburgh University and the UK Astronomy Technology Centre to develop an instrument for CubeSats to measure pollution from space, while Heriot-Watt will work with Toshiba Europe on a secure quantum transmitter for small satellites. 

The UK’s space minister, Liz Lloyd, said the funding, set to be unveiled today (3 December), will help Scottish scientists and engineers build technology that “makes a real difference to people’s everyday lives.”

“Whether it’s cleaner air in our communities, keeping personal information safe online, or making sure emergency services can always get where they need to go – this is what space innovation is all about,” said Lloyd. 

“By investing in Scottish talent and expertise, we’re building a stronger economy and a brighter future for Scotland’s communities.”

At the same time, the UK Space Agency announced £1.1 million to strengthen space clusters in Scotland, Northern Ireland, and Wales, working through the UK’s devolved administrations to harness each region’s unique strengths and catalyse investment for local growth.

Space Scotland will gain £350,000 to strengthen its capabilities in Earth Observation and In-Orbit Servicing and Manufacturing by forging fresh links between universities, industry, and government. That funding will also open the door for non‑space companies to pivot their tech into the fast‑growing space sector.

Scotland is also playing a key role in OXYGEN, a project awarded £410,000 funding through the UK Space Agency’s International Bilateral Fund to make lunar exploration more sustainable.

Led by AVS UK with partners including the University of Glasgow, the project is developing technology to extract oxygen from Moon soil, or ‘regolith’, a vital step towards producing rocket fuel and life-support materials on-site during lunar missions. 

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“These projects demonstrate the strength of our research base and the talent driving advancements in secure communications, environmental monitoring, and resilient navigation — technologies that will shape the future of global space infrastructure,” said Dr Natasha Nicholson, CEO of Space Scotland.

“We are especially pleased to see dedicated support for Scotland’s space cluster. Space Scotland looks forward to working with our partners to turn this momentum into long-term growth for the entire sector.” 

According to the government’s latest figures, Scotland’s space industry accounts for 13% of UK space sector employment, contributing £381 million in income and employing 7,120 people, but MPs recently warned that greater focus is needed to stop Scotland from falling behind European peers. 

In response, the government pledged more ‘clarity and direction’, as well as an 8% funding bump, for the Scottish orbital launch sector next year; however, while the news of more funding will be welcomed by Scottish spacetechs, these investments are modest when compared with the £1.7 billion UK package agreed with the European Space Agency last week.