Does anybody know of anything apart from military use which requires scrambled signals?

The signals are scrambled, but the main point is they are high precision. If we ever get to self driving cars we will probably need to know where they are more accurately than a few tens of metres, and GPS is part of this.

I would not read too much into "Galileo is an outdated design." It is in the nature of all long life technology programs to have an outdated design. If you design something to come to fruition in say 8 year's time, it is no surprise if it is the best part of 8 years out of date when it eventually is completed.

"It could be a chance to leapfrog the system." Yes, there is always that chance. Just as there is always the chance to fall completely flat on your face. The UK does not have a very happy history of high tech projects.