@ Anonymous Coward - who IS running this?
Fair question - because of the early history of internet development in the UK, Nominet's position is unique (in UK terms, I dunno about elsewhere) and somewhat anomalous. AFAIK there's no real politically-accountable oversight of Nominet, yet they effectively have a government franchise to run our TLD. That's not a comfortable situation, IMHO.
The reason (as explained to me years ago by a Nominet person) is historical - Nominet (or rather its founder, Willie Black) set up .uk before the government had any idea of what the internet was, or how important it would become. When the government did recognise the need for a UK internet identity, it was much easier and cheaper for them to run with the existing Nominet one than to set up a new, official namespace of their own.
Because of this (and unlike eg the .fr namespace, which I think is directly regulated by the French government) the UK government has no constitutional control over any part of the .uk namespace. AFAIK even its exclusive rights to use .gov.uk, .police.uk etc are the result of a gentlemen's agreement with Nominet, rather than by any fundamental ownership mechanism (though I'm sure an ownership mechanism would be rapidly legislated if Nominet went rogue and tried to withdraw their use!).
I think Nominet have done a good job so far, but the lack of any political oversight and accountability bothers me, and I think the critical strategic importance of namespace control makes a constitutional review of Nominet's nature and role long overdue. Of course I don't want the government running the UK namespace as a public-sector IT disaster area, but I don't want a bunch of commercial ISPs or anonymous suits in Oxford running it as a private fiefdom either. Whether for profit or not.
What about other countries - can we do a survey of other national registry models to inform the debate on our own?
As for the war-chest - anyone know how much fibre you can buy for £20m? It sounds like pocket-money in infrastructure terms - would it make a significant dent in our national bandwidth deficit? And if it was spent on fibre, who would own it?