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Boosting the bottom line

Recent landmark research by the Met Office and Department for Business, Innovation and Skills (BIS) has calculated the value of the Met Office's work for UK companies. The report concluded that the Met Office will add £30 billion of value to businesses between now and 2025 - at a benefit to cost ratio of 14:1.

The idea for the Met Office General Review was first explored by the Met Office Board in 2014. It forms part of the Government's on-going programme to better understand organisations that provide public value - and how they can improve their services.

The aim was not just to demonstrate the breadth of what the Met Office delivers and how it operates, but also analyse its economic value to the UK. So the review's remit was conceived to draw a complete picture of the organisation's role and impact in a way never before attempted.

"There has been previous economic analysis of the public weather service," explains Sophie Purdey, Executive Head - Strategy at the Met Office. "However, this project - which differs from the Government's formal triennial review process - went much further. By taking a unified approach, it pulled together the value of both weather and climate services, and projected their effect a full decade into the future."

Robust evidence

With the majority of the review taking place over winter 2014/15, the project was managed by a highly experienced Project Board comprised of senior staff from BIS and ShEx (The Shareholder Executive). A Met Office/ShEx working team then coordinated activities day-to-day. However, it was critical that the General Review process was transparent and objective.

"This came through the appointment of independent Board member Tera Allas, previously the Director for Strategic Advice at BIS," adds Sophie Purdey, "and a tender process that secured well-known external consultancy London Economics to conduct the in-depth analysis. Starting with a base case, their methodology applied various scenarios and sensitivity analyses - separating out sector value streams and applying market-based estimates of value."

The renowned US economist Jess Lazo from the National Oceanic and Atmospheric Administration (NOAA) then ensured further impartial scrutiny and verification. This was supported by additional robust cross-government and external peer review.

Unique reach, unique capabilities

The Met Office's distinctive role comes through clearly in a London Economics General Review Final Report that was completed in April 2015 and published in March 2016. This highlights that the Met Office's unique characteristics make it 'difficult to compare with other National Meteorological Services (NMS)'.

These include the Met Office's:

• Unified weather and climate model that provides a critical national capability and a key component of the UK's defence, security and civil contingencies infrastructure.

• Dual function enabling both civil and military aviation.

• Role as one of only two World Area Forecast centres delivering forecasts globally - and one of few NMS collaborating with and selling services to government institutions overseas including Australia, South Africa, South Korea and the US Air Force.

• Bespoke forecast services to commercial and private users.

• Role supplying processed open data - enabling the UK-based commercial market.

The Met Office cost base also sets it apart, with core research and scientific capability accounting for two-thirds of requirements. Investment decisions are necessarily long-term, with the costs of contributing to global satellites, running the supercomputer and research typically spread over 5 to 30 years.

£30 billion in value to the UK to 2025 - plus important wider benefits

The General Review's primary goal was 'to identify the overall net economic value over the next ten years (2015 -2025) to the UK of having the planned weather and climate services delivered by the Met Office.'

"The General Review's remit was conceived to draw a complete picture of the Met Office's role and impact in a way never before attempted."

The conclusion it delivered was that, taking into account investment already committed, the Met Office would bring some £30 billion of value to the UK over that period - at a benefit-cost ratio of 14:1.

And around a quarter of this figure can be attributed to the UK having invested in 'world class' quality forecasts - an approach that has resulted in greater accuracy than any other national meteorological service. (See below for key benefit streams).

Although the General Review's remit was restricted to the UK only, it did point out significant non-quantifiable wider benefits. International respect for the Met Office's unified weather and climate model, forecasting accuracy and active support to build capacity in developing countries all add to Met Office global influence.

Informing the future

Two key developments show how the General Review is already positively shaping debate around the Met Office's plans for the years ahead.

"A new Interdepartmental Met Office Strategy Group was established to discuss future funding requirements across government," explains Sophie Purdey. "Coming ahead of the Comprehensive Spending Review, this was a significant step that acknowledges the breadth of our activities - from supporting the Ministry of Defence through to cold weather payments for the Department for Work and Pensions."

The review process has also resulted in the first ever detailed statement of government requirements for the Met Office. Encapsulating its priorities for the UK, the document is in the final stages of agreement and will be an important reference point for future Met Office strategy.