One government department having to pay another for information is plain daft.
Would this work?
Have OSGB expand the OS OpenData project to create an open and documented 1:10 000 vector map of topography, with layers of roads, streets and landmarks on top. Add another layer on top of rules (for lanes, one way streets etc).
Create a secure and transparent API for councils and third parties to submit changes (either temporary like road closures or flooding, or permanent like making a street one way).
Require all UK Sat Navs to use this map as a base and to provide an easy update mechanism to download regular updates.
Release the map free for non-commercial, low license fee for commercial.
Sat Nav manufacturers can charge for the routing engine and value add (like the "TomTom Route IQ"-style realtime routing information or truck info or overlaying sat imaging etc) on a subscription basis but have to provide the updates to the base map with basic functionality for free.
Have a simple reg-based system and specify the number of years each device has to be update-able for (e.g. Sat Nav with a reg 60, which is second part of 2010, must be provided with updates for at least two years.) Have it printed on the box in a standardized way.
Require all HGVs etc to have an up-to-date Sat Nav system suitable for their vehicle.