The UK’s data regulator is working on developing its own transfer mechanism for businesses intent on sharing data internationally, which many businesses will eventually come to rely on now Britain has left the EU.

From this summer, the Information Commissioner’s Office (ICO) will be consulting with organisations and other data protection practitioners on replacing the EU's standard contractual clauses (SCCs) currently in place.

SCCs are a mechanism the EU devised to allow organisations to lawfully and securely transfer personal data from member states to those countries outside of the bloc, where data adequacy agreements have yet to be established.

UK businesses are still allowed to use these EU-created SCCs, despite the UK having moved beyond the Brexit transitionary period. However, the EU is currently drafting a new form of SCCs, set to launch later this year, which will replace the current mechanisms and will be invalid for international transfer from the UK.

To address this, the ICO is planning to issue its own form of transfer mechanism this year that will match the EU’s in terms of compliance and security, and ensure data can continue to flow without disruption.

“I think we recognise that standard contractual clauses are one of the most heavily used transfer tools in the UK GDPR, and we’ve always sought to help organisations use them effectively with guidance,” said Steve Wood, the ICO’s deputy commissioner and executive director for regulatory strategy.

“What I can confirm today is the ICO is working on bespoke UK standard clauses for international transfers, and we intend to go out for consultation on those in the summer. We’re also considering the value to the UK for us to recognise transfer tools from other countries, so standard data transfer agreements, so that would include the EU’s standard contractual clauses as well.”

Wood revealed the ICO’s plans at its Data Protection Practioner’s Conference during a panel discussion. He was joined by several others, including its COO and deputy CEO Paul Arnold, as well as director for regulatory strategy (international), Paula Hothersall.

With the UK’s data-sharing terms with the US under much debate too, and speculation rife about how this relationship may evolve, Hothersall revealed the current arrangements with the US are unchanged from those in place prior to Brexit.

There are, however, conversations between the ICO and its counterparts abroad as to whether data protection authorities can establish some common ground, or a set of core principles, to achieve a degree of interoperability in the future.

Hothersall added that the ICO is engaging with groups such as the Global Privacy Assembly and the OECD to find areas of agreement.

Although the UK has secured a provisional data adequacy decision, there are concerns within the EU as well as among privacy campaigners that the UK will seek to diverge from GDPR in a meaningful way.

Specifically, campaigners have expressed concern the UK will seek to align more closely with the US, where data protection laws are less stringent and allow for more invasive surveillance.

On 31 December 2020, the UK’s Brexit transition period came to a close, taking us firmly out of the EU. Many issues have been raised over the flow of goods between Britain and its former partners, but the flow of data is a different matter altogether. Data has become an intrinsic part of modern business and with previous rules on international data transfers now at risk of irrelevancy, many organisations are considering how they can adjust their data practices to avoid falling foul of regulators.

With many elements of international data law still up in the air pending various legal cases and policy decisions, we’re joined by Bart Willemsen, VP at Gartner specialising in privacy, to discuss the current regulatory environment and how businesses can prepare themselves for any changes that might be on the way.

Footnotes

• GDPR and Brexit: How will one affect the other?
• Brexit could cost UK firms £1.6bn if data-sharing agreement isn’t reached
• UK data laws after Brexit: Your questions answered
• Facebook will move UK users' data to the US post-Brexit
• The IT Pro Podcast: Cyber security post-Brexit
• EU fires warning shot to UK over post-Brexit US data-sharing
• UK's post-Brexit data deals 'will go further than EU ever could'
• Your guide to overcoming Brexit's data management challenges
• CMA seeks to fill post-Brexit regulatory void as it eyes big tech
• Border force reliant on 26-year-old tech due to digital upgrade delay
• What is EU-US Privacy Shield?

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The Home Office's failure to upgrade systems used by border control teams will cost the UK an additional £173 million, a new report has found.

The proposed Digitial Services at the Border (DSAB) programme has been delayed and won't be rolled out until March 2022.

Instead, border force staff will have to rely on a 26-year-old system to check whether suspects and persons of interest are trying to enter the country, according to the National Audit Office (NAO), with another 16-year-old system used for analysing passenger data also cited in its report.

The upgrade was originally planned for March 2019 and the failure to deliver on time will come with an additional cost of £173 million, according to the NAO. Worse, the report also warned of technical problems with the new system, with just weeks to go until the end of the post-Brexit transition period.

Plans to digitise the boarders were launched way back in 2003, with a completion date of 2011. There have been repeated delays and a new plan (the DSAB) launched in 2014, but still no upgrade. The chair of the public accounts committee, Meg Hillier, accused the Home Office of failing to learn from past mistakes.

"The Home Office once again lost sight of the programme's core purpose, trying to add more and more features like baubles on a Christmas tree," Hillier said according to The Guardian. "The department plunged ahead without a delivery plan and didn't address risks. Failure was inevitable."

Auditors agree, stating that the Home Office "did not deliver improved digital border systems to its planned timetable of March 2019" which has "increased costs by £173m and means it continues to rely on legacy technology".

The report also revealed that the Home Office plans to remove all data from the Schengen Information System, the EU's police and security database, on 31 December.

Despite continued uncertainty and a rising chance of no deal, the channel needs to prepare for a slew of changes when the Brexit transition period ends on 31 December 2020.

Even with an agreement, supply chains, lead times, hiring strategies, regulatory compliance and more will need to evolve – with potential cost increases attached.

Andrew Buss, research director at IDC, notes that more due diligence on contracts and service levels will be required, with longer lead times for inventory, and customs processed on the UK border. This probably doesn't mean a resurgence in UK assembly, however.

"We used to have bigger assembly plants in Scotland that could actually be built up again. But it may be simpler to just buy from the EU and pay the tariff," he says.

"And it's likely we'll be shut out of any integrated European assembly process, because of tariff and non-tariff barriers and the timescales required for transport."

Although large manufacturers may have their own arrangements, smaller independent assemblers will likely need to work with sub-assembly in different locations or focus on local customisations.

The biggest bugbear is likely to be non-tariff barriers, rather than tariffs, making the UK a small, less attractive market.

Any deal at this late date, he notes, is likely to be bare bones rather than include comprehensive detail that will ease the path for trade.

Graham Jones, UK managing director of Exclusive Networks, says the VAD had already increased resilience and disaster recovery testing during Covid, including reconsideration of how best to motivate and manage teams.

Since then, they've worked to ensure all contracts cover both the UK and Ireland operations – but cost and red tape increases are expected, meaning the company will still have to work out exactly what and how much can be reasonably passed on to customers.

He says the uncertainty itself is adding to the impact – not least because customers continue to debate whether to move outside the UK to retain EU access, delaying some IT projects.

"As a business that exports 15% of our sales across the world, we need clear rules," Jones confirms, adding that it already buys from Taiwan and the US which should help reduce exposure to EU issues.

"Our government likes forms and red tape," he adds. "We have very active HR and logistics departments. We will look to automate what we can. Meanwhile, we see TV adverts telling us to prepare, but not what to prepare for. No-deal will likely just add to the hurt."

Alex Tatham, managing director at distributor Westcoast, highlights a 'new normal' of higher production costs and compliance procedures in the channel, which resellers too should prepare for by consulting resources such as the British Chamber of Commerce checklist, and registering for UK and EU Economic Operators Registration and Identification (EORI) numbers.

"We have assumed a 'no-deal/free trade agreement' all the way along," he adds. "As a critical part of the supply chain, we have focused on getting our processes right, storing commodity codes and checking potential tariffs, liaising with our suppliers on changes."

Westcoast has also bolstered freight forwarder relationships, bonded its warehouse, and increased stockholding and warehouse capacity over December and January and in Ireland and France, amid other actions such as recruiting additional international shipping staff.

"The main supply chain issues will be delays at port," Tatham confirms. "While these may be serious to start with, most customers have been relaxed about the extra time for imports. Westcoast is assisting customers with international shipping requirements."

Richard Lockey, country manager at cloud services provider Crayon UK, doesn't ship physical product and doesn't feel cloud consumption and related transactions should be impacted, although staff visas and qualifications, especially if they work across countries, may require attention.

"Relevant visas must be in place to allow our EU staff to continue working in the UK. We do remain concerned about the effect of trading conditions in general, so will watch for potential impacts on our clients and partners," Lockey says.

"I don’t envisage costs going up [for us] unless there is an impact on foreign exchange (FX). A lot of the cloud consumption and software that we transact is pegged to the US dollar and other currencies. I would hope that labour costs will remain steady."

Robin Ody, senior analyst at Canalys, reports that hardware imports will be subject to a new UK global tariff and other possible duties. If it's no-deal, the UK falls subject to WTO rules and will need to negotiate separate deals with all countries – inside or outside the EU.

"Delayed product delivery, higher prices due to weaker currency and higher real prices are probable at least in the short-term," Ody confirms. "The trouble with no-deal is there will be no possibility to minimise price differentials by buying through the EU. The unpredictability of separate bilateral trade deals, which will take years to negotiate, is in the pricing and planning."

Cloud may become more appealing as companies work to get round issues of infrastructure hardware supply. Current data regulations, which resemble quite closely those of the EU, will continue to be policy, but no one knows how the UK might respond to US pressures around data sovereignty, Ody says.

UK immigration rules are "strict and labyrinthine", he adds, with the Australian-style points system set to make the UK less attractive to students and younger people.

"It is not the 'high-skilled' people the UK says it wants to attract who are the issue but those with less obvious skills on paper that can grow into tomorrow's leaders and engineers," says Ody.

"Overall, there is little that partners can do to prepare in a predictable sense for no-deal because even no-deal is not a defined problem. They have to hope the UK government does not act foolishly, and provides some basis for planning."

Data changes that have arisen as a result of the coronavirus pandemic have rendered many artificial intelligence (AI) models useless, with UK data leaders forced being forced to rethink their modelling approach.

Approximately three-quarters (76%) of UK data leaders believe the AI models they use have been rendered redundant due to the changes in datasets that have naturally arisen during the coronavirus pandemic, according to research by Big Data LDN.

Changes to how accurate data may be has also forced more chief data officers into stating that data quality was a key focus, rising from 41% last year to 55% in the latest survey of 250 influential data leaders.

The disruption is also likely to continue with the UK’s withdrawal from the European Union, with two-thirds of UK data leaders demanding more clarity on how the changes in data-sharing practices will affect them from January. The majority (72%) of retail organisations fall into this bracket, following 66% of public sector and insurance and financial services organisations.

Without a form of adequacy agreement, or the appropriate terms in a trade deal, data transfers between the EU and the UK are likely to be severely disrupted. The nature of the withdrawal will see the UK relegated to third-country status as far as GDPR is concerned, too, unless an agreement is reached.

“As the UK’s data leaders map out the future in a data-driven world, skills play a vital role. COVID-19 has presented challenges to the way the UK data economy works,” said Big Data LDN founder, Bill Hammond. “With smaller teams having to do more with less, the question of the UK’s leadership in the Fourth Industrial Revolution is, for the first time, unclear.

“Data professionals are watching intently as data becomes the battleground for competing global nation states. UK businesses are losing trust in Governments, favouring major cloud players in their stead.”

The research also found that trust in data regulators, including the Information Commissioner’s Office (ICO), has fallen over the last year, although the main reasons haven’t been specified. General distrust in data is likely to be caused by the hurried introduction of processes such as contact tracing, with concerns over the way in which businesses are required to collect and process data.

The size of data teams, and the amount of work they can do, has changed significantly as a result of COVID-19, meanwhile. Three-quarters (76%) of respondents working in the public sector suggested they had to downsize their in-house data teams, against the average of 65% of data leaders across the board reducing their teams.

The Federation of Small Businesses (FSB) has called for the UK Government to provide transition vouchers for firms ahead of the country's latest round of talks with the European Union.

The organisation, which provides small businesses with services, support and a voice to government, says the current financial landscape is in a notably different state to where it was at the beginning of the Brexit negotiations.

"The transition period will soon be at an end but the small firms that make up 99% of our business community still have no clear sense of what they'll be transitioning to," said FSB National Chairman Mike Cherry in a release.

"The economy is in a very different place today compared to the last time we were told to prepare for a no-deal outcome. Small firms don't have the time or money to get across new bureaucracy or stockpile."

As a result of this uncertainty, FSB is urging the UK to construct and agree on a deal that will benefit small businesses and outline just what those positives are.

"Negotiators need to agree a small business-friendly deal, and swiftly," Cherry continued. "Concerningly -- unlike all other major UK Free Trade Agreements – the draft terms of the EU deal don't contain a dedicated small business chapter outlining how it will benefit firms of all sizes. We urgently need progress on this front."

The ongoing impact of the COVID-19 outbreak has also complicated the situation, leaving small businesses little option but to plough all their efforts into navigating the pandemic as a priority.

The flexibility of transition vouchers would, however, allow businesses a softer transition into their new relationship with the EU, FSB said.

"Given that small firms have been flat out managing coronavirus-linked disruption for the past six months, the Government needs to step in with the substantial financial support to assist with transition preparations," Cherry urged.

"Transition vouchers mark a sensible way forward: set sums that can be spent on expertise, tech and training that will ease the small business community's move to a new relationship with the EU."

He added: "If the Government wants firms to take preparatory action over the next few months, it needs to help them to do so. Business minds are understandably, still very much focussed on coronavirus."

Unsurprisingly, the issue of Brexit has been somewhat pushed out of the public consciousness by the ongoing coronavirus crisis - but that doesn’t mean it’s gone away. In less than four months, the transition period will end, and on 31 December, Britain will officially leave the EU. This will have wide-reaching implications in a number of areas, but there are still significant questions to be answered around how it will affect the IT security of UK companies.

Issues like the availability of security talent, the integrity of supply chains, intelligence-sharing and more are all going to be impacted when the transition period ends. But what changes can businesses expect to see, and what can they do to prepare themselves for them? In this episode, Adam is joined once again by special guest co-host Keumars Afifi-Sabet to discuss.

Footnotes

• GDPR and Brexit: How will one affect the other?
• UK data laws after Brexit: Your questions answered
• EU fires warning shot to UK over post-Brexit US data-sharing
• The IT Pro Podcast: Beyond Brexit
• UK government sets aside £235m for Brexit IT spending
• Non voyage: Coronavirus, Brexit and the future of business travel
• The EU calls for cyber security pact with post-Brexit UK
• Brexit Britain will miss out on EU's €1.8 billion cybersecurity funding
• Small businesses ‘unprepared’ for no-deal Brexit

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This article originally appeared in May's edition of IT Pro 20/20, available here. To sign up to receive each new issue in your inbox, click here.

Right now, the thought of going on a business trip might sound like an out-of-reach luxury. Due to the global coronavirus pandemic, international travel for the majority has been halted, and the closest many of us will have got to a business trip over the past few months will have been lugging our laptop from our desk to the sofa.

According to recent figures from the Global Business Travel Association (GBTA), 97% of business trips in Europe have been cancelled or delayed as a result of the pandemic. Instead, organisations are embracing a new way of working, enabled largely by remote collaboration and video conferencing software; three-quarters of GBTA members said they were now using virtual meetings and teleconferencing in place of corporate travel.

This unprecedented situation will undoubtedly change the future of business travel. The majority of GBTA members, some 62%, said the current crisis will change the way their company conducts business once the threat is over, although 80% of European members said they either expect international business travel to resume in two-to-three months (33%) or six-to-eight months (47%).

Once business travel does eventually resume, the aftermath of the coronavirus pandemic won’t be all businesses will have to contend with. The looming uncertainty of Brexit, which has persisted for almost four years, also looks set to shake up corporate travel, and many who are used to the flexibility that has come with free movement are fearful about what the future could hold.

Roam you don’t

Since 2017, British travellers have been able to use the minutes, texts and data allowances included on their mobile phone tariffs when travelling in the EU. Before rules changed, as many will be sorely aware, using a mobile phone in Europe was horrifically expensive; the internet is full of horror stories of people returning home from trips to bills of hundreds, or even thousands of pounds.

It remains unclear whether these extortionate charges will return after Brexit, likely a worrying prospect for business travellers who rely heavily on their smartphones for tasks such as work calls, answering emails and using maps to get around, not to mention those paying the bills.

“The costs of these activities will fall to the employer as this will usually be from a business phone or a personal device that is expensed,” Thomas Kempster, technical director of CT Business travel, tells IT Pro. “Setting roaming charge caps could be a way to minimise costs, but will mean that staff won’t be able to carry out essential tasks once the limit is reached.

“Costs can also be kept down by choosing a hotel with free and unlimited Wi-Fi included in your room rate. These little changes add up and mean that as a business, your travellers should be able to carry out their duties without racking up large and unexpected bills.”

Thankfully, the government has passed legislation that would provide some safeguards to those travelling in Europe. This includes a £45-a-month limit on the amount that customers can be charged for mobile data before having to opt-in to use more, and a requirement for customers to be informed when they have reached 80% and 100% of their data allowances.

What’s more, it appears UK operators may be willing to burden the costs. EE, O2, Three and Vodafone have all said that they currently have “no plans” to reintroduce roaming charges, regardless of how Brexit negotiations turn out.

“Our customers enjoy inclusive roaming in Europe and we have no plans to change this based on the Brexit outcome,” an EE spokesperson told IT Pro, while O2 added that it will be “working closely with the UK government and other European mobile operators to try to maintain the current EU 'Roam like at home' arrangements once the UK leaves the EU.”

However, like Brexit, nothing is set in stone as of yet.

Visa-vis

Perhaps the primary concern for business travellers is the end of freedom of movement, which has – until now – allowed citizens of any member state of the European Union to take up employment in another member state on the same conditions as the nationals of that particular member state.

The UK government has confirmed there will be no changes to how UK business travellers and tourists visit the EU until at least 31 December 2020; travellers won’t need an international driving license and a valid European Health Insurance Card will still allow access to state medical care in any EU country during 2020.

However, as is becoming rapidly clear in the current climate, that date is fast approaching and it remains unclear what happens once it has passed.

It’s likely that if you’re indulging in business travel after this transition period, you’ll need a visa or permit in order to do so, at least if you’re planning to stay for up to 90 days in any 180-day period. Disruptions at border control are also probable; travellers may be forced to show they have enough money for their stay, for example, and could be forced to use separate lanes from EU, EEA and Swiss citizens when queueing.

“Preparing for new visa requirements currently is a bit of a grey area as it hasn’t been announced how these requirements will be changing as a result of Brexit and also from the fallout of COVID-19,” says Kempster.

“Your best chance at avoiding being caught out is to plan trips well in advance to allow for visas to be granted and also consider using an expert travel management company for your bookings, who will advise on all relevant visa requirements before you travel.”

The abolition of freedom of movement could also have an impact on the cost of business trips. Once the UK falls out of the EU-US open skies agreement, which eliminates government interference in the commercial decisions of air carriers about routes, capacity and pricing, flights could become much more expensive; according to reports, fares around the EU have fallen about 40% since the introduction of the policy.

Hotels, too, could become pricier. A KPMG study shows that approximately 750,000 hospitality workers working in Britain are citizens of other EU countries and while current rules allow them to work where they want within the bloc, they will need to obtain a visa to continue working in the UK in the future. This will undoubtedly cause many to quit their jobs, leaving the hotel industry scrambling to hire new employees – something that could lead to higher salaries and, ultimately, higher room rates.

The future

Given the current pandemic, along with the uncertainty surrounding Brexit and the regulations it could introduce, nobody knows for sure what the future of corporate travel looks like.

The GBTA, however, is optimistic; 88% of its members expect employees will be willing to travel once restrictions are lifted, and three in four (77%) predict that the worst has already happened, compared to just 15% who feel the worst is yet to come.

“The global business travel industry remains at a standstill, but we are finally beginning to see some light at the end of this very long tunnel,” said Scott Solombrino, CEO of the GBTA.

“GBTA members are planning their post-coronavirus recovery plans and most expect to be operational in 2020. This is a positive sign. The majority of GBTA member companies expect domestic business travel to resume in the next two-to-three months and most expect employees will be willing to travel.”

Others, however, are more pessimistic and believe business travel could become a thing of the past. Peter Ballard, co-founder of B2B service design company Foolproof, tells IT Pro: “The temporary ban on our business travel is already leading us to find new ways to connect, operate and decision-make entirely virtually.

“Whether businesses will want to go back to supporting face-to-face meetings with the high cost of international and domestic business travel remains to be seen. But I suspect questions will be raised as to whether we should, when coupled with the positive environmental impact that our decreased carbon footprint is having globally.”

Don Welsh, president & CEO of Destinations International, agrees, telling IT Pro he thinks these new technological solutions will become a “long-term part” of the meetings, incentives, conferences and exhibitions (MICE) market.

“Clearly the impact of COVID-19 has presented new technologies to help supplement the fact that we cannot safely all meet in person right now due to safety and health concerns. I do believe that many of these new interim solutions will become a long-term part of the MICE market to add educational opportunities in addition to meetings.”

However, he believes this will supplement corporate travel, rather than replace it completely. “Conversely, I do believe that the current situation where we are all operating from our homes and are distant from our team members and customers has shown that humans need human interaction,” he adds.

“I think the value of face-to-face meetings has never shown to have been truer in the last couple of months.”

This article originally appeared in May's edition of IT Pro 20/20, available here. To sign up to receive each new issue in your inbox, click here.

One of the most turbulent aspects of the Brexit debate was the uncertainty it created for businesses across the UK. While we now have a slightly better idea about what the regulatory landscape will look like after the transition period ends, questions remain about the future.

We pulled together some of the most common issues raised by businesses, both before and after Brexit day, and put them to legal experts. While we’ve sought to answer them as fully as possible, some have yet to be addressed by the UK government. In these instances, therefore, legal opinion often remains divided.

What laws will the UK use to protect data once we leave the EU?

Perhaps the biggest issue facing businesses and consumers is figuring out what the UK’s data laws will look like once we are beyond the remit of EU rules.

The UK currently operates under GDPR supported by its own Data Protection Act (DPA) 2018, which adds certain exemptions and derogations that help GDPR fit into the UK puzzle more cleanly – for example, in areas such as regulatory enforcement and issues of national security.

Emma Erskine-Fox, associate at UK law firm TLT, explains: “It’s a common misconception that the DPA 2018 incorporates the GDPR into UK law post-Brexit, but this isn’t the case; this will be done by the European Union (Withdrawal) Act. The DPA 2018 serves the important purpose of providing a data processing framework for law enforcement and intelligence services processing, in accordance with the EU Law Enforcement Directive.”

She adds that the Data Protection Act 2018 will continue to function in this regard and sit alongside GDPR even after the UK leaves the EU.

Ashley Winton, chairman of the Data Protection Forum and partner at law firm McDermott Will & Emery, explains that although the UK’s data protection position will seem relatively straightforward for the consumer, the legal position for organisations will be complicated by overlapping legislation.

“The DPA 2018 introduces the concept of the ‘Applied GDPR’,” says Winton. “This is a UK version of the GDPR which will apply as UK law, but only applies in very specialist circumstances: Primarily for certain national security or defence purposes. The Data Protection, Privacy and Electronic Communications (Amendments etc) (EU Exit) Regulations 2019 will adapt the GDPR to form the ‘UK GDPR’, which will govern the majority of the data protection processing in the UK.”

He adds that this will be further complicated by the Withdrawal Agreement, which “provides that personal data received from individuals located in Europe before the end of the transition period must continue to be processed in accordance with the GDPR”.

Is the UK likely to change existing data laws after Brexit?

One of the core tenets of the Leave campaign was the idea that the UK could take back control of its laws, and so questions have surfaced over whether it would seek to change established EU laws once it leaves the bloc.

Aside from a number of small administrative amendments to GDPR – for example, the changing of references to ‘Union law’ to ‘domestic law’ – it’s likely that there will be more substantial changes to come.

“Recent indications from the government suggest that the UK may look to diverge from the GDPR, but we don’t yet have any clarity on exactly what that divergence might look like or what areas may change,” explains Erskine-Fox.

According to Hazel Grant, head of privacy at law firm Fieldfisher, it’s very unlikely that the UK will follow developments in EU law once the Brexit process is finally completed.

“Boris Johnson has previously stated that the UK will seek to create ‘separate and independent policies in areas such as data protection’,” says Grant. “However, the UK has also committed in the Political Declaration on the Future Relationship between the UK and the EU to ensure ‘a high level of personal data protection’.”

Both Grant and Erskine-Fox agree that if the UK hopes to continue a close relationship with the EU and secure an adequacy agreement, it needs to be careful that any plans to change UK data laws don’t deviate too far from the EU’s position.

How will my business in the UK transfer data to other countries?

The implementation of GDPR into UK law means that restrictions will still apply when agreeing data transfer arrangements to other countries – that is, if your business needs to transfer data to another country, that target country’s data laws need to be deemed ‘adequate’ by the UK.

The UK has already confirmed that it will recognise all countries in the European Economic Area (EEA) as having ‘adequate’ data laws, meaning data travelling from the UK to the EEA will likely remain intact after the transition period and businesses won’t be required to make any adjustments. This arrangement also extends to each of the twelve countries outside the EEA that the EU has already signed adequacy agreements with, although it’s likely that the UK will sign agreements with these countries after Brexit as a formality.

That means a UK business will be able to freely transfer data to Andorra, Argentina, Faroe Islands, Guernsey, Israel, Isle of Man, Japan, Jersey, New Zealand, Switzerland, Uruguay, and the US (as part of Privacy Shield), as well as Canada for commercial purposes.

After the transition period ends, the UK is likely to start work on its own mechanisms for transferring data to those areas not already covered, however, as mentioned earlier, these will need to be in line with GDPR principles.

“Transfers to any other countries will still require a transfer mechanism to be in place, so data sharing between a post-Brexit UK and Brazil (a country not currently recognised as adequate by the EU) would need to be covered by one of these mechanisms,” says Erskine-Fox. “The UK will, in the short-term, retain the existing adequacy mechanisms approved by the [European] Commission; including model contract clauses and binding corporate rules.”

The UK government has already started discussions with countries elsewhere in the world to build arrangements that provide mutual recognition of data standards. However, it’s unclear if these will be established before the end of the transition period.

Will my data transfers from the EU be interrupted by the end of the transition period?

As mentioned earlier, the UK has already said it will deem EEA countries ‘adequate’ in order to maintain data flows after Brexit. So, there’s nothing to suggest that data flows out of the UK to the EU will be hampered in any way.

However, while there is every indication that this will be reciprocated, the EU has yet to confirm this. What’s more, it’s impossible to say how long the process of securing an adequacy agreement could take once the go-ahead is given.

“In the Political Declaration, the European Commission has committed to start the assessment of UK data protection law with a view to adopting a decision before the end of the transition period,” explains Alexander Milner-Smith, partner and co-head of the Data & Privacy Group at law firm Lewis Silkin. “However, these assessments have in the past taken much longer and with the current COVID-19 pandemic it is likely that this timeline will not be met.”

“There are other countries in the ‘queue’ for adequacy, but, according to the black letter of the law on adequacy, the UK is adequate and should be judged as so,” he adds.

The UK does have plenty of advantages to speed this process along. Unlike every other country currently in the ‘queue’, or indeed any country that has been judged adequate in the past, the UK already complies to GDPR. It has also functioned as a well-respected and well-resourced data supervisor within Europe.

However, there are concerns that the process could be frustrated by conflicts with existing UK national laws. As Milner-Smith explains: “The main worry is over the width of the Investigatory Powers Act – i.e. can security and police forces look too easily at our personal data in the UK?”

It’s possible these concerns may be overblown, as “a number of other countries who have been judged as adequate have similar, or much wider, powers of surveillance, for example Israel. Even Canada, another “adequate” third country, has wide powers,” he says.

Ultimately, how long it will take for the UK to secure an adequacy agreement is likely to be a matter of politics.

“Whilst the EU and the European Commission always talk about the rule of law and process being sacrosanct, one suspects this will be an example of creative interpretation and the adequacy decision will be held as a bargaining chip in more general negotiations. As such, one might expect to see the absurdity of ‘fish’ for ‘data’ entering into discussions.

“This is a perfectly valid negotiation tactic, but we should not pretend it has anything to do with whether the UK has adequate data protection standards or not.”

My UK business needs to share data with the US – will I need to use Privacy Shield?

It’s difficult to say for certain at this stage what the UK’s international data transfer system will look like after Brexit, but there appears to be a consensus that it will seek to retain Privacy Shield, at least in the short term.

“It may be that the UK decides that it would prefer to keep Privacy Shield as a method of transfer,” says Grant. “That was the intention before, when a no-deal Brexit was anticipated. Participants were going to be able to use the Privacy Shield to transfer data from the UK to the US provided that they updated their public commitments to say that those commitments extended to transfers of data from the UK.”

Claire Hall, a solicitor specialising in data protection at law firm VWV, agrees that Privacy Shield will still apply to transfers from the UK to the US after the transition period.

“As for what will happen if the Privacy Shield is replaced, there are too many unknown factors at the moment to say,” explains Hall. “In some respects, it is in the UK's interest to have comparatively free data flows with the US but this has to be balanced against the need to maintain robust data protection laws so that we maintain our adequacy decision.”

According to the Data Protection Forum’s Winton, during early trade discussions between the UK and the US, “a more permissive regime was discussed but there aren’t any indications that the [current] situation will change in the future”.

Are we going to see more companies move their data to the US, as has been the case with Google? If we do, will UK laws still apply?

In early 2020, Google made the decision to move the data it held on UK citizens away from Ireland and store it instead in the US. According to the firm’s former global privacy lead, Lea Kissner, it was feared that the UK might water down its own data protection laws to the extent that it fails to reach an adequacy agreement with the EU, making it more difficult for the company to share data with the EU.

According to VWV’s Hall, there’s little the UK government will be able to do to prevent such decisions from organisations, however, she added that UK citizens have little to fear about their data moving to the US.

“It’s important to note that the personal data of people in the UK can still be protected by UK law when it's in the US – just as it's protected by the GDPR at the moment,” says Hall. “The GDPR has territorial provisions that place obligations on organisations outside of the EU in certain circumstances, for example when the organisation is offering goods or services to people in the EU.”

Will Brexit really give the UK independence when it comes to data laws?

Although independent law-making was considered one of the main arguments for voting to leave the EU, the European Union’s data regulations could continue to have an effect on the UK’s laws long after the transition period is over.

“If the UK wishes to maintain an EU adequacy decision then it will not be entirely free to decide its own data protection standards,” argues Grant. “[Laws] will need to remain essentially equivalent to those in the EU. The UK regime will not need, however, to be word-for-word the same as the EU regime.”

However, this might result in potential complications if the UK fails to secure an agreement with the EU. As Grant explains, the UK “has made commitments to the EU about the treatment of personal data from the EU which came to the UK before the end of the transition period”.

According to this, data will continue its obligations of having to be processed in accordance with the EU’s GDPR standards, regardless of any further decisions made by the UK and taking into account past and future case-law of the Court of Justice of the European Union.

“These commitments will be binding in international law and could constrain the positions which the UK takes in future international agreements on data protection,” says Grant.

Taking into account these obligations, it could become necessary for businesses to be able to adapt to and juggle multiple data laws at once. Even in the case of the UK creating its own, independent data regulations, businesses might want to keep a copy of EU data laws - especially when processing older datasets.

Despite the UK obtaining some level of independence with Brexit, the EU will continue to hold a great deal of leverage over its former member state. In a very possible scenario, the bloc will continue to exert influence over the type of data laws being adopted in the UK, even if it no longer has jurisdiction or direct involvement. Independence has a price, and that price might be the risk of undermining business processes.

There’s a quote I first came across on Twitter during the context of a political scandal of some description that I keep coming back to. While the furore it refers to has now faded from memory, buried beneath an endless onslaught of controversies, the quote has stuck with me.

“If someone says it’s raining and another person says it’s dry, it’s not your job to quote them both. It’s your job to look out the window and find out which is true.”

It’s attributed to retired American journalism professor, Jonathan Foster, and illustrates the difference between balance and fairness, and how the quest for balance can often get in the way of the truth. Although the quote is about the practice of journalism, it's becoming increasingly applicable to social media, too. The world’s two biggest social media companies have once again been dragged into a public debate on whether or not they have a duty to hold their users to some standard of truth - sparked, of course, by one user in particular.

US president Donald Trump this week signed an executive order seeking to strip social media companies in general – and Twitter in particular – of the legal protections they enjoyed as public forums, rather than editorial publishers. His argument is that, by adding a small label to his demonstrably false and deliberately misleading public statements, Twitter is essentially taking an editorial stance.

This sounds ridiculous on its face; after all, how can fact-checking be a partisan issue? The sad reality, however, is that truth has become a partisan issue, and it’s largely the fault of social media companies.

Attention has been the currency of the internet for decades; since advertising is how the vast majority of websites pay their bills, they need to attract as many eyeballs as possible, and so sensationalism and hyperbole has been the overall tenor of the internet. Everything on the internet is the BEST THING EVER, or the ABSOLUTE WORST. Stories will SHOCK or DISGUST you; there is simply no middle ground.

This general tone has been the background radiation of internet discourse for years, but it’s been amplified beyond recognition by social media. Like every other online service, these companies need to keep users on their platforms as long as possible, so highly-shareable, viral content is promoted, rewarded and optimised for maximum transmission.

When this is cute cat videos or a ten-hour loop of Masterchef’s Gregg Wallace saying ‘buttery biscuit base’, this isn’t really a problem. Sadly, joy isn’t nearly as powerful an emotion as anger, and posts designed to shock and outrage are much more likely to be virally spread than harmless memes. The upshot of this is that social media has become increasingly toxic – a phenomenon that has been well-documented.

But it was in 2016 that the lid was truly lifted on this simmering digital cesspool.

On either side of the Atlantic, two separate political events took place that year that fundamentally altered the rules of society. Suddenly, blatant outright lies became an accepted political tool. In saner times, inflammatory and provably false claims were the sole province of conspiracy theorists and rabble-rousing demagogues, but from 2016 onwards, they’ve been a key part of mainstream political debate.

It’s easy for both users and providers of social media to dismiss wild pronouncements about political issues – such as the idea that the royal family murdered Princess Diana – as the ravings of online lunatics. When similarly wild allegations are coming from news broadcasters and world leaders, that background radiation of conspiracy theories and outright lies turns into a full-blown Fukushima of falsehoods, and the concept of truth itself has been so poisoned that any evidence contradicting a particular worldview can simply be dismissed as biased propaganda, or a lie itself.

Today, Trump constantly makes untrue statements about everything from mail-in ballots being rigged to a news anchor murdering his employee, and faces little or no censure from his party or the press. Worse still, those claims are amplified and repeated by his legions of social media fans. The same is true in the UK – just look at the vociferous defence of Dominic Cummings from various sections of the right-wing commentariat.

All of this also fuels the far end of the conspiracy theory spectrum, as the idea that 5G is somehow linked to coronavirus – something for which there is no scientific proof – becomes commonplace enough that telecoms masts up and down the country are targeted by mobs of vandals and protesters.

Social media has fuelled this whole problem. Figures like Alex Jones and Donald Trump do not exist in a vacuum; their populist lies are only a viable self-promotional tactic because Facebook and Twitter have engineered a global discourse where mass hysteria is the most profitable outcome. They are integral to the continued spread of damaging falsehoods, and if the situation continues to worsen, the entire concept of objective truth may be fundamentally undermined beyond repair.

Facebook and Twitter have a responsibility to fix the mess they’ve created. There is a difference between not wanting to police morality or ideology, and simply being too cowardly to take a stand. Some things are provably incorrect; banning the spread of such statements doesn’t infringe anyone’s rights. The mainstream press won’t fight this problem, and the legal system can’t – it’s time for social media to do the right thing.

For the last four years, there has been one key subject weaving its way in and out of every part of daily life in the UK: Brexit. Since the first mutterings of a referendum on whether the UK would like to leave the European Union, to the triggering of Article 50, the political landscape has been beset with questions and uncertainty.

The shifting sands have also not been helped by the continuous uncertainty and fallout in UK parliament, with two general elections being held and three different prime ministers in place over the course of three short years.

While the COVID-19 coronavirus pandemic is holding everyone’s attention currently, Brexit is still quietly rattling on in the background, with the end of the transition period bearing down upon us in December this year. Consequently, while organisations are naturally busy fighting fires caused by the immediate crisis, they must still have their eye on the game with regard to our departure from the EU.

One of the subjects at the forefront of the Brexit debate has, of course, been business and trade. What will happen once the transition period runs out? What will the eventual deal between the UK and EU look like – will there even be one? And if one is forged before the end of the year, what tariffs will be imposed and how will this impact supply chains? All key questions that can generate very different responses depending on the leanings of those you ask.

One thing is certain, however: even as uncertainty caused by the coronavirus outbreak continues, IT and tech businesses will need to adapt again in order to ensure the future viability of their operations in a post-EU UK.

Market impact

Channel firms have already seen an impact on technology markets such as PCs, smartphones, and tablets. Research conducted by Gartner found that tech vendors have been grappling with the global political uncertainty throughout 2019 and that’s forecast to continue into 2020. As a result, IT companies have already needed to adapt to vendors increasing their prices.

“There is no doubt the PC landscape is changing,” commented Ranjit Atwal, Senior Research Director at Garter, regarding the firm’s 2017-2023 forecast update. “PC vendors are having to cope with uncertainty from potential tariffs and Brexit disruptions.”

Atwal said that vendors are adjusting pricing to account for the weaker pound and have begun moving away from purchasing models in favour of service income.

“Ultimately, they need to change their business models to one based on annual service income, rather than the peaks and troughs of capital spending,” he said.

Supply chain and equipment issues are of utmost significance to IT firms. Leaving the single market means that certain hardware that passes through borders will also now need to go through extra checks. As Forrester senior analyst Paul McKay noted in January last year, some hardware-based security services will be subject to extra customs controls and origin checks.

"CISOs should review their key suppliers and supply chains to determine whether this is likely to impact them and any in-flight projects,” he advised. “Additional time should then be built into your security program plans to account for some additional delay in deliveries. This is not expected to be a large bump but may delay some delivery deadlines if supply chains start to jam up.”

To minimise post-Brexit hits, channel firms will need to work closely with partners to investigate their supply chain and ensure there are plans in place that can negate price hikes and delays. IT leaders are advised to draw up a game plan tailored to their specific needs and market, accounting for any predicted market changes or fluctuations as the transition phase progresses.

Alongside hardware issues, another key concern for businesses is data flows between the UK and EU, McKay said. Essentially, the UK’s post-Brexit data protection regulations will need to align once the country has left the bloc – but IT companies will need to plan for any potential non-agreement or an extended discussion period.

“We recommend that CISOs and DPOs start looking into alternative means now for guaranteeing the legal basis for their international data flows between the UK and EU,” he said. “This can either be through model clauses or a binding corporate rules program, for example, which are already widely used for transfers outside of the EU.”

On top of that, there’s also the consideration of the workforce, with many IT workers in the UK born overseas. Should Brexit bring about a dramatic reduction in this worker-base, many industry observers believe it will create an even wider skills gap than the one already present in the industry.

No-deal Brexit could still happen

Of course, the spectre of a no-deal Brexit scenario continues to linger. As recently as April 18, Prime Minister Boris Johnson’s controversial advisor, Dominic Cummings, ruled out an extension to the transition period, despite talks being severely disrupted by the coronavirus crisis.

Back in September, IT firm Pure Technology Group noted that should a no-deal Brexit occur, the effects on supply and currency exchange “are likely to result in temporary constriction and currency fluctuation”, but added that the IT industry is “not likely to be the worst affected sector”.

According to Deloitte, this no-deal scenario would leave the wider tech sector needing to mitigate effects on data flow, continuity, intellectual property protection, access to talent, as well as access to the digital single market. “The winners will be those in the sector prepared for change and alive to the opportunities,” the professional services firm said.

That preparation should involve the continuous monitoring of key sources, it added, such as government and EU advice, industry bodies, as well as the business’ own workforce. Companies are also advised to conduct a market access review to understand the future trade relationship with the European Union.

“Undertake a regulatory review to understand what changes to the standards or regulatory regime could mean for your products and services where they are delivered, produced and sold” Deloitte advises. “In particular with regards to the transfer of personal data and GDPR.”

Others have predicted some positives, however. Analysis conducted by BNP Paribas and the Centre for Economics and Business Research (CEBR) in 2019 that looked at the long term impact of Brexit and the UK’s financial recovery, found that up to 2.7 million jobs could be added to the economy by 2038. Of these, almost one million of them will come from the transport, storage and communications industry, the research predicts, driven by the rise of AI, automation, and robotics across all sectors.

While the situation may be incredibly unstable now thanks to coronavirus, companies operating in the IT channel can’t afford to forget about Brexit. They must still take steps to bolster defences against economic uncertainty in the short term and, in the longer term, grow their business in a new economic and political landscape.

Google plans to migrate UK user accounts from Ireland to the US following Britain’s withdrawal from the EU.

The sensitive data of tens of millions of users could be shifted away from Ireland, where it currently resides, according to Reuters. That's believed to be amid concerns from Google that the UK will loosen its data protection laws and fail to agree on a data-sharing agreement with EU, potentially making it difficult to transfer data between Ireland and the UK.

The migration will involve asking UK users to agree to new terms of service, which includes consent to holding their data under the new jurisdiction.

The move could mean UK authorities are better able to recover data for criminal investigations, thanks to the CLOUD Act that has made cross-border data transfers much easier. However, it raises concerns as the US has much weaker data protection laws than across the EU. While the Californian Consumer Privacy Act (CCPA), outlines some protections, there is no national federal data protection law with sufficient provisions akin to GDPR or the UK's Data Protection Act 2018.

According to the firm’s former global privacy technology lead, Lea Kissner, Google fears that the UK water will water down its data protection laws enough that it fails to reach an adequacy agreement with the EU. Without that agreement, data sharing will become more complex, and potentially require company by company contracts.

"There’s a bunch of noise about the UK government possibly trading away enough data protection to lose adequacy under GDPR, at which point having them in Google Ireland’s scope sounds super-messy,” Kissner told Reuters. "Never discount the desire of tech companies not be caught in between two different governments."

Legal director with UK law firm TLT, Ed Hayes, told IT Pro that it's no surprise Google is looking at ways to move UK user data away from the EU, given that GDPR limits the ways companies can monetise data. "Google’s plans seem to assume the UK will water down its data protection standards once the Brexit transition ends," he said. "But that would contradict UK Regulations passed in 2019 to incorporate GDPR into UK law after transition, and government statements to date about continuing GDPR compliance.

"It could be that Google is betting the UK’s need for a quick US trade deal will see those commitments dropped, and is seeking to boost its bottom line by moving UK users’ personal data under US law," he adds. "However, if Google gets that wrong, and simply changes the location of UK users’ personal data while GDPR-equivalent laws still apply, it’s unlikely to achieve the goal of taking itself outside GDPR – GDPR’s reach is controlled by user location not just by data storage location."

The question of data flow post-Brexit has been the source of much confusion for businesses. During the current transition period, which will expire January 2021, the Information Commissioner’s Office (ICO) has made assurances that data flow between the UK and the EU will continue as normal.

The terms of the UK’s future relationship with the EU will determine whether critical business information can continue to flow seamlessly. The suggestions that a future trade agreement between the UK and the US could weaken data protection laws are partially reinforced by leaked documents released last year. According to preliminary trade discussions, the US is currently lobbying for an agreement to ease international data transfers underlined by a set of common standards, but not to the extent that domestic laws are harmonised.

The issue of Brexit has been looming over the UK for more than three years - but now that it's finally a reality, how can businesses prepare themselves for the changes that lie ahead?

We talk to former CIO, experienced IT industry veteran and Gartner VP analyst Stewart Buchanan to find out how much certainty organisations currently have, as well as the best way they can insulate themselves from potential disruption and secure their future productivity.

We also look at Vodafone's decision to remove Huawei from its core network, the potential morale-lowering effect of penetration tests, and the departure of long-time Linked CEO Jeff Weiner after more than a decade leading the ubiquitous business network.

Footnotes

News

• Vodafone to remove Huawei equipment from its core networks
• Ethics of red team security testing questioned in new report
• Stories from the front line: The secrets of the Red Team revealed
• IBM CEO Ginni Rometty steps down
• LinkedIn’s CEO steps aside after 11 years in charge

In depth

• How bad will Brexit be for tech?
• GDPR and Brexit: How will one affect the other?
• Ireland's fintech sector capitalising on Brexit
• Small businesses are looking to expand to mitigate Brexit impact
• CMA seeks to fill post-Brexit regulatory void as it eyes big tech
• Brexit could lead to massive IT job boom
• UK-US post-Brexit data flow agreement could water down regulation standards
• Small businesses ‘unprepared’ for no-deal Brexit
• Now is the time to embrace remote working

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Investment in the UK's tech sector outstripped both the US and China in 2019 ,with 44% growth year-on-year, according to research.

Venture capital investment leapt to a record high of $13.2 billion (£11.7 billion) in 2019, according to figures from Tech Nation and Dealroom, which is an increase of $4.1 billion (£3.6 billion) compared to the previous year.

The numbers paint a healthy picture of the UK's digital sector, which many thought would struggle with the uncertainty of Brexit but in the past 12 months secured 33% of all tech investment in Europe.

2019 also saw eight UK tech companies became unicorns – companies valued at $1 billion or above – which is twice the number created in Germany and three times as many as France. What's more, the number of early-stage investments grew by 20% with $5.1 billion (£4.5 billion) going to UK startups.

"As we head into a new decade, we want to keep up this momentum ensuring the tech sector flourishes right across the country, helping more entrepreneurs turn their ideas into business successes and strengthening the nation's digital skills," said Matt Warman, the UK's minister for Digital and Broadband.

Russ Shaw, the founder of Tech London Advocates, welcomed the news by praising the UK's tech startups, but warned that securing an additional £3.1 billion in a year "defined by political turmoil" was not a clear indication of long-term national economic output.

"The tech start-ups and scale-ups in Britain stand at the forefront of innovation on the world stage and have again claimed the lion's share of VC investment heading into Europe from the US and increasingly Asia," Shaw told IT Pro.

"I will caution that there are challenges to come for UK tech. Boris Johnson will need to negotiate a favourable trade deal on services with the EU whilst the tech community at large campaigns for free movement of labour to help keep the talent pipeline flowing."

Collaboration between the UK and EU in the post-Brexit era will be essential for cyber security, according to Michel Barnier, chief Brexit negotiator at the European Commission.

The conditions of Britain's exit from the European Union, delayed for the second time until 31 January, are still being debated by Parliament.

"Brexit is not only about the divorce: with so many underestimated consequences, it is also about building a new partnership with the UK," Barnier said at Lisbon's Web Summit tech conference. "Even when our deal is ratified, that will not be the end of the story. We need to keep in mind that orderly withdrawal is a step - a necessary step, but it is not the destination."

He noted that the UK and EU will have to cooperate against cyber security threats in particular, for the protection of future trade and mutual security.

"Our new partnership should include the exchange of information on cyber incidents, attackers' techniques, threat analysis and best practice, including when those target the correct functioning of democratic systems," Barnier said. "Crucially, we need to have capacity to respond jointly to such attacks."

"Today in the 21st century, the US and China are in the lead," Barnier said, warning that Europe is falling behind in the race for tech development, and failure to collaborate will only mean shooting each other in the foot. "If we in Europe do not act now, the future of our industry, our jobs, personal data, and ethical standards will be made in Washington and Beijing."

With the legitimacy of standard contractual clauses (SCC) as contractual tools indicative of GDPR-level data protection still under debate, UK businesses might be barred from receiving GDPR-protected data from the EU altogether after Brexit.

Other EU-enforced data protection measures such as ePrivacy Regulation, which compels websites to ask visitors whether they'd like to accept cookies, won't carry over either unless the UK passes similar legislation before Brexit.

Barnier included his personal feelings about Brexit in his Web Summit speech: "Let me be frank. Until now no one has ever managed to explain to me the added value of Brexit. Not even Nigel Farage."

The uncertainty surrounding Brexit is causing concern for businesses in all sectors, including technology. In fact, a survey by the Institute of Directors found that nearly four out of ten IT firms might relocate their operations overseas due to Brexit.

Despite this, the UK's tech sector continues to experience record growth. Research from industry body Tech Nation shows that the industry will have raised $11 billion (8.8 billion) of investment by the end of 2019, compared to $8.7 billion (7 billion) the previous year. What's more, an estimated $1 billion (802 million) of foreign and domestic investment is raised per month. Will this trend continue post-Brexit?

From threats to opportunities

Although the details of Britain's departure from the EU are still unclear, it will no doubt have a significant impact on the business landscape whatever form it takes. Karl Foster, legal director at Blake Morgan, believes that Brexit will present both opportunities and threats to foreign investment in the UK regardless of whether a deal is reached. He says: "Firstly, currency fluctuation resulting from a no deal Brexit may make UK targets more attractive to foreign investors as assets will be proportionately cheaper when priced in stronger currencies.

"Likewise, much of the basis for investing in the UK will still apply; the English language, established regulatory and industry eco systems, leading academic institutions, an effective capital market system, a traditionally business friendly approach, and longstanding international outlook will remain. It's perhaps for these reasons investment in tech startups is hitting record levels despite Brexit uncertainty."

But he says the impact upon businesses that rely on cross border data flows with EU members is more uncertain. "The GDPR would be replaced with a UK version which would largely replicate the provisions of the GDPR. However, as the UK would be outside the EEA, it remains to be seen how the practical implications will be handled."

While the exact effects of Brexit aren't known, Foster takes the view that the threats may become opportunities for tech companies and could help to boost investment. He adds: "Much has been made of the potential shortage of EU workers in the picking of fruit and vegetables. Investment in robots could address these issues and potentially help address productivity issues generally. Blockchain technology has long been mooted as the next big thing in international trade to bring greater efficiencies to the supply chain. Perhaps a government endorsed strategy lead to widespread adoption."

Remaining optimistic

For many, there's a strong belief that UK-based technology companies will continue to flourish outside the EU. Gareth Jones, co-founder of coworking organisation Town Square Spaces, says decades of economic stability won't be eroded overnight post-Brexit. He tells IT Pro: "The UK remains an attractive place for investors historically, corruption has been low, there are world-class universities in every corner of the nation, excellent quality of life and there's connectivity to all major markets."

He urges business owners to remain optimistic, despite operating in uncertain times. Jones adds: "It is important that tech founders focus on how attractive the UK tech sector is, and will remain to be, and contribute to the discussion on how they would like it to be in the future. The divisive nature of the debate is a quagmire of opinion and speculation, and founders need to remember they have control over one thing their business and its planned direction."

Kieran Abbott, founder of software development agency Big Lemon, notes how the industry has grown exponentially over the past decade. He believes this trend won't automatically stop because of Brexit. Abbott says: "The latest tech nation report supports the recently published ONS figures, which suggested that the number of tech-related jobs in the UK has risen by 38% since 2010.

"In Wales, this figure was as high as 83%, with the south-west of England boasting 41%, suggesting that other areas of the country are beginning to catch up with London and The City. This should pique the interest of potential investors as it shows there are untapped regions that could provide some exciting growth in the sector."

Businesses are also receiving lots of support in the run up to Brexit. Abbott explains: "From our personal experience, there has definitely been a lot more support for tech startups in Wales, and this has resulted in the increasing number of fast-growing tech-businesses. However, we've found many of our customers are getting support from independent organisations, rather than the government.

"Banks have realised that if they support more tech startups, then they can generate enough new customers to make accelerator programmes worthwhile. The fact that private enterprise is recognising the opportunity is encouraging, and suggests that the UK will still be an attractive place for investment post-Brexit as the tech sector in regions away from London continue to mature."

Success stories

Having recently secured a 2 billion investment deal from two private equity companies, enterprise software company Advanced is something of a British success story. The firm's CEO, Gordon Wilson, envisages Brexit having little impact on his business. Advanced is pushing ahead with accelerated growth plans in the meantime and has completed a transformation drive to ensure it's prepared for the UK's departure from the EU.

He explains: "Currently, in pre-Brexit state, the outcome and implications of current negotiations and the resulting political and economic landscape remain unclear. Advanced over the last three years has undergone a huge transformation to ensure we run as an agile, efficient business, able to respond quickly to the dynamically changing technology landscape, markets we serve and the wider political and economic climate."

Wilson claims that because Advanced remains heavily invested in the UK and is a software business, the impact of Brexit will likely be small. He continues: "95% of Advanced business is transacted in the UK [sterling to sterling] and so we cannot imagine being impacted by currency dynamics.

Like many UK tech businesses, Advances is a software provider, which means it will also be unaffected by one of the key areas of concern in a no-deal scenario: Import/export tariffs and changes in supply chain logistics.

"[We] expect zero impact on the availability of the software products and services we provide. Similarly we cannot imagine any impact on the costs of such. Our current position therefore is that we currently envisage Brexit will have a negligible impact on our business," Wilson concludes.

At the moment, it's unclear how Brexit will pan out. Whether or not the UK leaves the EU with a deal is unknown. However, what's clear is that regardless of legitimate concerns, plenty of British technology companies and founders remain optimistic about the outcome of Brexit and the potential opportunities it may bring.

Forget about cloud migrations, digital transformation and AI deployment - there's one foundational problem that modern IT departments have been wrestling with since the earliest days of the industry, and one that continues to challenge them to this day.

Modern IT departments continue to struggle with locating, recruiting and retaining talented technical professionals - which is partly why a European Commission report from 2017 estimated that by 2020, there will be more than 500,000 unfilled IT positions throughout Europe.

But why is recruitment such a struggle? What are the biggest challenges, and how can organisations start improving the talent pipeline and closing the skills gap? In this month's IT Pro Panel discussion, we spoke to some of our expert panellists to get their take on the IT industry's ongoing talent crisis.

"A complete nightmare"

For Liam Quinn, director of IT at Richmond Events, recruitment is a "complete nightmare". Hiring a new developer took almost five months; Domino's UK CISO Paul Watts says that his experience is similar, with technical vacancies taking an average of six months to fill.

"Recruiters are not very good, but using LinkedIn is like opening the door to a tsunami," Quinn says. "We don't have in-house recruiters, so it all falls on me."

Quinn's disdain for recruitment agencies is shared by ICC Wales' IT manager Chris Stanley, who says that they don't understand the job roles and related technologies that they're asked to recruit for. Quinn adds that they also over-promise, with a tendency to be poor at listening and communication.

While Quinn laments the fact that he has to handle all of the recruitment personally, the reverse is true for Stanley. Although he creates the job spec and conducts the interviews, the bulk of the candidate selection is performed by his company's internal recruitment officer. "It's not ideal as I would rather do it directly," he says, "but I don't have the time or resource to do it myself."

Quinn and Stanley both have relatively small teams, numbering nine and six people, respectively. Watts, meanwhile, deals with an IT organisation of around 100. However, all three of our panellists reported that their teams were split roughly fifty-fifty between specialists and generalists.

According to Stanley, this solves one of his primary recruitment challenges - namely that technical staff who have experience working with the specialised systems used by the hospitality industry are hard to find. Instead, he's forced to recruit generalists and get them working with vendors to build their proficiency. "They aren't mainstream," he says, "so it's challenging."

"It all comes down to there being so much technology," he says, "and these technologies are all used for every business role you can think of, so IT generalist will be one of the main roles for the foreseeable future."

"I'm planning to go hybrid in the security function to an extent," Watts agrees, "allowing people to start generalised, cross-skill and look to specialise where relevant and useful over time."

Skills to pay the bills

The area of skills represents one of Watts' biggest issues when it comes to talent. "The market is tough, skills are short in key areas and location is a big factor," he says. He cites security and cloud as two particularly challenging areas at the moment.

"The argument I hear is that the skills are there but people feel roles are inaccessible to them, in some cases because role specs are badly put together," Watts notes. "I do feel there is a shortage in certain niche areas. I wonder whether industry could do more to give academia a better outlook on skills demands over a rolling 24-36 months - ditto for vocational schemes."

Quinn, on the other hand argues that finding staff who have the right cultural fit is often as challenging as finding staff with the right technical background.

"There's lots of technical people around, but finding those that fit into the culture of the larger organisation is difficult. The majority of applicants we get when they come for an interview still fit the old IT stereotype and we're too small a team and company for that to work."

Similarly, Stanley notes that a candidate's attitude is increasingly becoming the most important factor when recruiting for technical positions, alongside qualifications and skills. However, all three of our panellists highlighted issues with the current careers pipeline.

"I met with an IT services owner a couple of months ago, and he is driving a campaign in South Wales to get IT leaders in the area to start to visit schools and colleges to promote IT as a career due to a lack of IT workforce locally," Stanley explains, noting that the majority of students still see IT "as an 'uncool' job".

"There certainly needs to be better alignment between academia and industry," Quinn agrees. "The various code schools don't seem to understand what is needed in the real world and they code by example, not around initiative and creativity."

The Brexit question

Much has also been made of the potential negative effect that Brexit could have on the availability of talented staff, as tougher immigration restrictions prevent European developers and technicians from moving to the UK. However, none of our panellists are particularly concerned about the impact of Brexit on the number of skilled workers.

Although half of Stanley's team are originally from overseas - or more than half, he jokes, if you count England as 'overseas' - his current staff are all UK residents, he says, so Brexit won't present any immediate issues. "Recruiting may be more of a challenge," he admits, "but this is an opportunity for the UK to invest in and promote job roles in all industries."

Watts was more pragmatic about the possibilities, arguing that it's impossible to predict the impact of Brexit until companies know what kind of Brexit we're likely to have. "To be honest, speculating about it is hurting industry as much as the event itself," he said.

"Who knows what will be involved in Brexit come the end of the year," Stanley added.

If you're a senior IT decision-maker and you'd like to apply to be part of the IT Pro Panel, please email panel@itpro.co.uk.

The General Data Protection Regulation (GDPR) was introduced on 25 May 2018, designed to primarily standardise data protection rules across the European Union (EU) but also to improve data subject rights and make business data collection more transparent.

However, the UK has now exited the EU and is, therefore, no longer subject to EU laws introduced after this withdrawal date. Yet, there's the small matter of historic legislation, which raises the question: is a post-Brexit UK still bound to GDPR?

The short answer is yes. The UK has long been committed to the creation of robust data protection laws and was, in fact, one of the principal architects of GDPR. As such, the UK government had long maintained that GDPR would be absorbed into UK domestic law, which was eventually done as part of the European (Withdrawal) Agreement. This agreement means that GDPR and the UK's existing Data Protection Act 2018 work in tandem to rule on data cases.

However, the UK government has since announced that it wishes to move away from the GDPR regime, and towards regulations that are free of "red tape" and that "promote innovation". What form this new regime will take remains to be seen, and untangling the current data protection landscape will be a complex process.

Data Protection Act 2018 and GDPR

Although the UK has left the EU, that doesn’t mean that GDPR no longer applies. This would certainly have been true if the UK government tried to untangle itself from the regime altogether during the withdrawal process, however, the exact opposite was on the agenda. The government was keen to ensure that data transfers between the EU and the UK remained as they are now, which was only possible by ensuring the UK data protection landscape mirrored that in EU nations.

In order to convince the EU that its data laws were adequate, the UK needed to pass both the Data Protection Act 2018 and pass the UK GDPR as part of the European Union (Withdrawl) Act 2018. This was so that once the UK was relegated to ‘third country’ status, it wouldn’t have been difficult or too long-winded for EU officials to recognise the country’s data laws as being in harmony with its own. Without this crucial agreement, data could continue to flow from the UK to the EU, but not the other way around, which would pose many problems for businesses that keep data stored abroad. It would effectively lead to the UK being blacklisted, and data flows prohibited.

However, the UK had managed to prove that its data protection laws were equivalent to the EU’s, and so it qualified for 'adequacy status'. The agreement - only recently struck - signalled to businesses that they could continue to move data between the EU and the UK without interruption.

Although it now wants to distance itself from these laws, the UK government passed the Data Protection Act 2018 to show it was committed to maintaining the status quo, while going further and introducing some mechanisms that were unique to British law.

After the UK left the EU on 31 January 2020, it entered a transitionary period that lasted until 31 December 2020. The UK was then relegated to a ‘third country’ on 1 January 2021, at which point it sought to finalise the adequacy agreement. On 19 February 2021, the EU issued a draft decision that recognised the UK's data protection laws as adequate, with this agreement officially ratified several months later.

GDPR and Brexit: Dealing with EU citizens

However, that's not quite the full picture, as businesses will need to keep in mind a number of quirks of law and potential headaches as a result of Brexit.

Given the UK is now outside of the EU, and therefore beyond the scope of the European Court of Justice, data regulation will largely fall on the Information Commissioner's Office, unless the case deals with EU residents.

Regardless of UK domestic law, those UK companies who have dealings with European residents still need to adhere to GDPR in full, and so many will have been forced to overhaul their practices irrespective of any agreements made after Brexit. Equally, UK companies may be required to liaise with an EU data protection authority in the event of a data incident, so it's best to keep up to date with enforcement across the bloc.

GDPR and Brexit: Dodging 'No Deal'

The good news is that the UK has already avoided the worst case scenario - a 'no deal Brexit'.

The UK government had said that in the event of a 'No Deal', it would have allowed data to flow from the UK to countries in the European Economic Area (EEA), however, the EU would have almost certainly banned data transfers to the UK as soon as it left the union.

The Information Commissioner's Office (ICO), the UK regulator responsible for data protection enforcement, warned at the time that those organisations which rely on EEA data transfers would need to move to alternative mechanisms in the event of a no deal Brexit.

Perhaps the only viable alternative at the time was standard contractual clauses (SCCs), a mechanism that still exists that provide a means for organisations to bake in GDPR-style data protections into contractual arrangements, acting as terms and conditions that require both parties to sign up to. These are particularly useful for sending data to countries in which data protection laws are not deemed adequate enough by the EU to protect European citizen data.

However, to complicate things further, the legitimacy of SCCs was called into question as part of a landmark case brought before the European Court of Justice. Ultimately, he ECJ ruled in December 2020 that these were indeed valid methods of transfer, provided that the companies using them take steps to ensure data is protected.

Which other data regulations have been affected?

PECR

The Privacy and Electronic Communications Regulations (PECR) rules, which cover marketing, cookies and electronic communications, are EU laws established within the UK legal framework, and so continue to apply despite the UK leaving the EU.

However, the EU will soon be updating PECR with its upcoming ePrivacy regulation, which is expected to come into force within the year, and will therefore not apply to the UK automatically. There is currently no indication that UK laws will be updated to align with this.

NIS

The Security of Networks & Information Systems (NIS) directive is also derived from the EU but is another that has already been set out in UK law. As such, the current rules continue to exit despite Brexit.

eIDAS

The electronic Identification, Authentication and Trust Services regulation is also an EU law that has since been transposed into UK law. Both the EU version and a UK version have been effectively blended together to form an ammended version known as the UK eIDAS Regulations.

Like the NIS directive, businesses will also need to adhere to eIDAS laws in EU Member States, which will be outside the enforcement of the UK.

FOIA

The Freedom of Information Act 2000 is now UK law and continues to apply despite Brexit.

EIR

Environmental Information Regulations are set out in UK law and so continue to apply unless repealed.

A new leader has been appointed to head up the Department for Digital, Culture, Media and Sport (DCMS), following a major government shakeup that has resulted in the departure of several high-profile cabinet members.

The news comes after several days of chaos, in which rows over the government's approach to Brexit led to the resignations of David Davis and Boris Johnson from their respective cabinet roles of Brexit secretary and foreign secretary.

In the wake of these departures, prime minister Theresa May has been forced to conduct a last-minute reshuffle which has seen Dominic Raab assume the role of Brexit secretary and Jeremy Hunt take Johnson's position as foreign secretary.

Stepping into Hunt's now-vacant position as health secretary is MP Matt Hancock, who previously led DCMS and was widely regarded by the UK tech industry as a good fit for the role. "techUK is very sorry to see Matt Hancock move on from the Digital portfolio," said Julian David, CEO for UK trade industry body techUK.

"As Minister for Digital, then as Secretary of State for Digital, Culture, Media and Sport, Matt has been a staunch supporter of the UK's tech sector both in Government and in other domestic and international fora. His move to lead the work of the Department for Health and Social Care is a clear recognition of the passion, determination and drive we have seen him show at DCMS."

Filling Hancock's place as the head of DCMS is Jeremy Wright. The MP for Kenilworth and Southam has acted as attorney general for England and Wales for the past four years, but his appointment to DMCS marks both his first official role with DCMS and his first secretary of state posting.

Questions have been raised by some as to Wright's suitability for the job a steering Britain's digital sector; although his Facebook page is kept regularly updated, as of his appointment Wright had tweeted just five times in three years, three of which were retweets. Moreover, according to parliamentary records, he has said the word "digital" only twice during his 13-year career in parliament and has voted on only one bill that pertains to the digital economy.

techUK was more pragmatic about Wright's appointment. "All of us here at techUK now look forward to working with Jeremy Wright and Digital Minister, Margot James, to continue to build on the success of our industry," David said.

"As we navigate our exit from the European Union and build a Global Britain, it will be crucial to have a voice at the centre of Government that understands the role the tech sector has to play, not just in creating a prosperous economy, but in finding solutions to society's most pressing challenges."

One of the ways that large and well-established companies enter new markets and acquire whole new areas of operation is to buy other large and well-established companies. This is pretty much normal practice, including in the tech sector.

Here are a couple of examples from last year. Hewlett Packard Enterprise bought Nimble Storage, a company specialising in 'hybrid' storage using flash and hard disks for $1.1bn. Cisco Systems bought Broadsoft a developer of cloud-based telecoms software for $1.9bn. And Verizon bought Yahoo, gaining a consumer-focused web business for close to $4.5bn.

Another big US deal announced last year was Broadcom's $117bn bid for Qualcomm. But that one was blocked by US president Donald Trump because, in the words of the Presidential Order, "there is credible evidence that leads me to believe that Broadcom Limited... through exercising control of Qualcomm Incorporated... might take action that threatens to impair the national security of the United States".

Does this matter to the UK?

So, what does that mean for UK tech businesses looking at merger or acquisition as a legitimate route to growth? Do they need to be wary of potential blocks to their own purchase of, or acquisition by other companies?

Carlos Keener, founding partner at BTD Consulting, which specialises in helping businesses get more from their deals, believes that the Broadcom/Qualcomm block is "yet another example of growing economic nationalism", particularly when it comes to fears around a growing Chinese market.

"While some issues may arise related to acquisitions, the primary concern here is for UK businesses looking to merge or sell to an overseas organisation," says Keener. "Given China's continuing interest in acquiring European firms in high-tech (including those in the UK), larger tech firms looking to sell in the coming few years will need to make sure to formally consider - and prepare for - potential governmental resistance to their proposed 'dream deal', be it a sale or even a partnership or joint venture."

What about Brexit?

It seems almost churlish to talk about this topic without paying some attention to Brexit, with the UK's formal leave date now less than a year away.

Daniel Domberger, partner at Livingstone, a mid-market M&A and debt advisory firm, argues that, in the context of Brexit, "we can expect the British Government to become more prickly about its global independence and may become potentially more protectionist.

"This might come in administrative as well as political forms such as a more aggressive review by the CMA (Competition and Markets Authority) rather than just ad hoc Government fiat."

However, he also envisions a rocky road ahead when it comes to dealing with a demonstrably protectionist US, adding that "the UK may find they face greater scrutiny, especially if the deals are particularly large, strategic, or have national security implications."

Theresa May is also likely to find herself in an "awkward position" if a British acquisition into the US were to be blocked on the same grounds as the Broadcom/Qualcomm deal.

"The Special Relationship is ever more important in the context of Brexit, and the UK will find itself caught between the political need to protest and perhaps retaliate, after debacles like Kraft/Cadbury and the diplomatic need to maintain relationships," says Domberger. "It's an old problem but Brexit makes it more acute."

More financial than military

While the premise that blocking one deal on national security grounds might have wider ramifications for the UK is a sound one and worthy of discussion, it isn't a simple matter to unpick. In the global economy there are many regional interests, trade blocks and agreements.

Perhaps, then, it's worth focusing not on the Trump block, but instead on the UK's situation. The issue for the UK, if there is one, might turn out to be much more about economics than about national security.

As BTD's Carlos Keener explains, "a 'hard' Brexit may lead to similar issues between the UK and EU countries, for example, if France continues to work hard to woo financial services firms and money across the Channel."

If all this shows us anything, it's that those tech firms mulling the idea of growth through mergers or acquisitions will need to keep a weather eye on global as well as local politics in the years to come.

Image: Shutterstock

With Brexit looming, it's difficult to avoid thinking about all the ways in which life will be affected by it, not least because the details of the UK's departure from the EU and what will happen next are still to be decided. The discussions between the EU and UK could result in a complete rupture from the politico-economic bloc (hard Brexit), adapting UK law so it's equivalent to the EU law and retaining elements like freedom of movement and the customs union (soft Brexit) or, although unlikely, not leaving the EU at all.

This uncertainty creates difficulties for businesses wanting to make decisions and preparations for the eventual split. This is especially true for businesses within the IT industry; with the tech skills gap already very apparent within in UK, Brexit will undoubtedly affect the IT workforce, no matter what form it takes.

One of the most obvious issues for business raised by Brexit is recruitment and staff retention as the majority of tech talent in the UK currently comes from EU citizens, not UK natives. Research by techUK conducted in 2016 revealed that 45% of digitally intensive job vacancies were filled by foreign-born workers, and a quarter of the employees in the software and computer industry are foreign-born, with the majority coming from the European Union. The Recruitment and Employment Confederation (REC) also reported that EU citizens make up approximately 180,000 jobs in the tech sector.

Brexit, especially hard Brexit, could result in the loss of a number of those people, with current uncertainty over the future already paving the way for future problems. Research by law firm Baker and McKenzie in 2017 found that 56% of EU nationals living in the UK were likely to leave the country before the outcome of Brexit negotiations is known, with the technology, media and communication sector found to be one of the most at risk when it comes to loss of talent.

Focusing on one area in particular, the Recruitment and Employment Federation found in December 2017 that 81% of UK recruitment agencies think demand for cyber security staff will increase "significantly" over the course of the next 12 months. Only 16% of respondents thought it the UK workforce would be able to meet demand, however, with 81% thinking it unlikely. Securing talent for this type of role and others could become more difficult if a hard Brexit scenario imposes a Visa scheme on workers from the EU, as that brings with it additional costs and hassle for the applicant and the would-be employer.

Gordon & Eden, a recruitment firm that specialises in technology executives, has also reported on this issue and found that numbers of job applicants from EU citizens have fallen by 40% because people are concerned about the economy, venture capital investment, and visas.

Giles Derrington, head of policy exiting the European Union at techUK, told IT Pro, "One of the things we have seen is businesses, not necessarily not getting applications from the EU anymore, but finding people who having successfully gotten jobs from the EU, turning it down, or asking for more money to basically offset the falling exchange rate."

Britain leaving the EU doesn't only affect those wanting immediate jobs in the tech sector, though. It seems Brexit could also cause a loss of students from the EU who wish to study STEM at UK universities, furthering the problem.

An investigation carried out in September 2017 by the Administrative Data Research Network found that of the 500,000 foreign students studying in the UK, roughly 125,000 are EU nationals. These students are likely to be studying STEM subjects, the research found, with approximately two-thirds of postgraduates from the EU undertaking studies in this sector.

Many of the students who come to study in the UK, also tend to perform better than their native counterparts with those who go into employment (as opposed to further study) securing better jobs than their peers. What's more, those jobs are often here, in the UK, with over 50% remaining in the country six months after graduation.

However, Brexit could reduce the number of these students coming into the country the Administrative Data Research Network said, as it's unlikely the process for EU citizens coming to study here will be as easy as it is currently. A change in the perceived desirability of the UK as a place to study and work and reduced funding for research, leading to fewer paid postgraduate places, were also cited as potential hurdles.

This, the researchers said, shows that universities and businesses could lose some of "the most highly skilled graduates, presenting a serious blow to the UK economy and workforce".

"The big issue, for universities as well as IT generally, will be recruiting and retaining good staff," Ross Anderson, security engineering professor at Cambridge, tells IT Pro.

"I have one EU postdoc leaving next week and another who's told me he doesn't want to renew his contract when it finishes at the end of June. In other cases, we've had non-EU lab staff having problems getting visas for Partners."

"Computing will be particularly badly hit as we don't train anything like enough young British people to program. We've been doing what we can for years; however many if not most schools still don't have proper computer science teachers," he added.

He went on to say that these issues keep the UK reliant on other countries for programmers, and if there are visa hassles that prevent or dissuade them from working in the UK, "the benefit to UK tech firms will be lost, and the net effect will be the opposite of 'taking back control'."

Issues like this throw into stark relief the fact the UK needs to improve the levels of STEM training it offers its own citizens, starting at the primary education level. Implementing initiatives such as this takes time, however, and with the Article 50 cut-off date now only a year away, there isn't sufficient time to build up this native workforce by Brexit Day

In the meantime, therefore, the UK needs to make plans for how immigration policies and visas will function in a post-Brexit world, as well as taking steps towards increasing funds for tech start-ups to help close the gap between UK and foreign firms. All of these actions could help keep IT talent within UK borders.

Derrington believes the government is gaining a better understanding of these problems as well as the importance of immigration to the UK's economy, especially in the tech sector. This is seen, for example, with the recent developments such the government's commitment to double visas for talent that was announced in November last year. However, he stresses the importance for the government to secure both a decent transitional deal and a highly flexible mobile system both leading up to and after the UK officially leaves. Both of these kinds of deals could help keep tech talent interested and able to remain in the UK, as well as making it easier for the tech sector as a whole.

"We're confident that there's a deal to be done with this stuff there is a mutual benefit of having a decent immigration system but it all very much depends on where we end up," Derrington says.

Overall, it's clear that Brexit will pose challenges for the workforce within the tech industry, especially while government and businesses alike are trying to figure out what exactly the situation will entail; however, it's very possible that in the long run, the UK will adjust and continue to be a powerful force in the tech sector.

Gartner believes Brexit will have a significant impact on the way businesses spend their IT budgets in 2018, with organisations spending more on software and cloud-based services that offer greater flexibility and favourable conditions compared to long-term, high upfront investments.

Worldwide IT spending will increase to $3.7 trillion in 2018 - growth of 4.5% compared to 2017's numbers, Gartner predicted yesterday.

"Global IT spending growth began to turn around in 2017, with continued growth expected over the next few years," John-David Lovelock, research vice president at Gartner, said. "However, uncertainty looms as organisations consider the potential impacts of Brexit, currency fluctuations, and a possible global recession. Despite this uncertainty, businesses will continue to invest in IT as they anticipate revenue growth, but their spending patterns will shift."

Enterprise software revenues are already showing strong growth, Gartner's report said, projected to increase by 9.5% over the next 12 months and an additional 8.4% in 2019 to hit $421 billion.

The analyst house predicts organisations will continue to invest in digital business, blockchain and IoT projects, but also move from big data to algorithms, machine learning and artificial intelligence (AI).

"Looking at some of the key areas driving spending over the next few years, Gartner forecasts $2.9 trillion in new business value opportunities attributable to AI by 2021, as well as the ability to recover 6.2 billion hours of worker productivity," said Mr Lovelock.

"That business value is attributable to using AI to, for example, drive efficiency gains, create insights that personalise the customer experience, entice engagement and commerce, and aid in expanding revenue-generating opportunities as part of new business models driven by the insights from data."

He said the key will be spending a chunk of budget on AI technologies in order to unlock their potential business value, especially when trying to find cost savings in the near future. "Spending on AI for customer experience and revenue generation will likely benefit from AI being a force multiplier the cost to implement will be exceeded by the positive network effects and resulting increase in revenue," Lovelock added.

Devices won't experience such significant revenue increases though, growing 5.6% over the next year and 5.7% in 2019. End user mobile device revenues will creep up slightly because they will cost more, although PC growth isn't so encouraging, with Gartner predicting revenues will remain flat.

Picture: Bigstock

The Information Commissioner's Office (ICO) has accused UKIP of holding up its investigation into how people's personal data was used by political parties in the EU referendum campaign.

The data protection body has been forced to issue four formal demands for details, including one to UKIP, which has appealed against the notice to the Information Rights Tribunal.

"In some instances we have been unable to obtain the specific details of work that contributed to the Referendum campaign and I will be using every available legal tool and working with authorities overseas to seek answers on behalf of UK citizens," said Elizabeth Denham, the information commissioner, in a blog post yesterday.

"Other organisations have failed to be as comprehensive as I believe they need to be in answering our questions and have forced us to invoke our statutory powers to make formal demands for information. The ICO has issued four information notices as part of the investigation including one to UKIP, who have now appealed our notice to the Information Rights Tribunal."

"This investigation is a high priority for my office. We're asking whether there was a legal basis to use this information. Did people have a way of exercising their privacy rights?"

A UKIP spokesperson told IT Pro: "UKIP have co-operated with the IC[O] however we feel that serving UKIP with a notice but no specific clarification imposes the threat of an offence but does not explain what is required to avoid it. Thus we have appealed that decision. We remain happy to co-operate with the IC[O]."

The aftermath of the Brexit vote put campaigns' use of data under the spotlight as reports emerged that Cambridge Analytica, a data-driven campaigning specialist, was involved with Leave.EU, though this alleged involvement wasn't disclosed to the election watchdog. Cambridge Analytica claimed proposed work never went ahead. Nevertheless, the ICO said it had concerns.

It launched its formal investigation into political groups' use of data analytics in May. Denham's latest update confirmed the ICO has spoken to more than 30 political parties, campaigns, data companies and social media platforms so far, including AggregateIQ, a Canadian-based company used by a number of the campaigns.

"It is still too soon for me to speculate on the outcome of our investigation," said Denham, adding that she will publicly report on the investigation and any recommendations at its conclusion.

Fake news on social media

The ICO's update coincides with continued scrutiny over alleged Russian interference in the EU referendum, with Twitter, Facebook and Google disclosing to a parliamentary inquiry into fake news how little money Russian operations actually spent on adverts on their platforms.

Twitter found that $1,031.99 was spent on six referendum-related ads during the regulated period for the EU referendum, while Facebook identified three adverts purchased by the Internet Research Agency (IRA) collectively for less than $1, and Google telling IT Pro it has found no evidence of any such ad spending.

However, Twitter found that @RT_com, which belongs to Russia Today, promoted referendum-related content during the regulated period. Twitter will no longer accept advertisements from RT or Sputnik and will donate the $1.9 million RT has spent globally on advertising on Twitter to academic research into elections and civic engagement.

J.J. Patrick, an investigative journalist looking into Russian inteference in elections, told IT Pro that even though the number spent on ads is low, they could have had a reach of almost a million views.

"What's interesting, however, is that most active Russian accounts are using organic reach and signal amplification through hashtags - which has no financial record," he said. "It's the psychological equivalent of money laundering and the true extent may never be known.

"It's not surprising that the first confirmations show a low level of activity. The same thing happened when the US started their inquiries and the truth spilled out over time. The U.K. has only just started the same process."

The former head of MI6, Sir Richard Dearlove, told BBC Newsnight: "I've not seen anything that convinces me at all that the Russians intervened significantly in the Brexit referendum."

Picture: Nigel Farage/Credit: Shutterstock

UK border controls could be thrown into chaos on the first day of Brexit as the government has no plans to make the necessary upgrades to ageing IT systems.

The government attitude that there will be no additional border risks once the UK leaves the EU, and that there will be no changes to cross-border trade and travel, has been described as "extremely worrying" in a report by the Public Accounts Committee.

This stance has meant that the government's Border Planning Group is not anticipating any major infrastructure upgrades at the border between now and March 2019, despite the claim that many departments are planning for a no-deal scenario, according to the PAC.

However, the report found that 30 of the 85 IT systems currently used at the border crossing will either need to be altered or replaced entirely if they are to work effectively after Brexit. This includes the need for five brand new and three replacement systems to infrastructure currently supplied by the EU.

"Major changes to border management are difficult to make and will require strong coordination across government and with many stakeholders," the PAC report stated. "Given the track record it seems unlikely that all the new systems needed to manage the border effectively after we exit the EU will be successfully delivered, and even if things go to plan, departments accept already that not all the systems would be ready by March 2019."

It added that past difficulties in upgrading IT systems have left many border processes reliant on outdated technology and, in some cases, paper-based systems.

The report also criticises the government's approach to the collection of data, pointing to a failed 2003 e-borders programme designed to improve the collection and analysis of passenger information, which was eventually cancelled in 2010 to the cost of 150 million in unfulfilled contracts. The replacement programme, known as Digital Services at the Border (DSAB), will not be complete until 2019, according to the PAC.

"Government preparations for Brexit assume that leaving the EU will present no additional border risks from freight or passengers. It has acted - or rather, not acted - on this basis," said committee chair and Labour MP Meg Hillier.

"This approach, in the context of what continues to be huge uncertainty about the UK's future relationship with the EU, might generously be described as cautious. But against the hard deadline of Brexit it is borderline reckless - an over-reliance on wishful thinking that risks immediately exposing the UK to an array of damaging scenarios."

Officials are now relying too much on the possibility of a transitionary period in which they will have the time to make the necessary upgrades to the IT systems, the report added.

There are also concerns about funding, as departments are "still negotiating with the Treasury on a case-by-case basis to secure their shares of the 250 million available to all departments". The Home Office has reportedly been given 60 million for the 2017-18 period but is still negotiating about future funding.

HMRC is also still negotiating over its 7.3 million plan to replace its CHIEF system as a contingency in the event that the Customs Declaration Service, an upgraded system that takes into account new requirements from the EU, is not ready in time.

A government spokesperson told the Independent: "We are fully focused on making the UK's exit from the EU a success. We have set out proposals for an ambitious future trade and customs relationship with the EU and we will be setting out proposals for the future immigration system in due course.

"We will, of course, ensure we have the resources we need to continue to run an effective customs, borders and immigration system in the future."

Photo by dannyman / CC BY 2.0

The UK is set to lose access to the European Cybercrime Centre, after it was revealed the country will no longer be a member of Europol following its departure from the European Union in 2019.

The European Cybercrime Centre - also known as EC3 - was set up by the cross-border law enforcement group to provide support for EU police forces in tackling cyber crime. EC3 assists national police with intelligence, digital forensics and strategy support, collaborating on cases involving technological elements.

Cyber security experts have expressed dismay at the news. "This is hugely disappointing," McAfee's chief scientist Raj Samani told IT Pro. "Europol have a proven record of success and one would hope a degree of compromise can be reached since the safety of all citizens across the globe is our joint mission."

The government had stated earlier this year that it wished to continue its relationship with Europol following Brexit, but the EU's top negotiator Michel Barnier said that access to Europol would not be possible once the UK leaves the EU, stating that it was a "logical consequence".

Losing access to EC3 will mean that UK police units fighting cyber crime will no longer benefit from intelligence-sharing between EU member states, as well as from the extensive support network offered by Europol's cyber specialists.

"Since before the referendum, the NCA and its partners in policing and wider law enforcement have clearly stated our need to work closely and at speed with European countries to keep people in the UK safe from threats including organised crime, child sexual abuse, cyber attack, and terrorism," a spokesman for the UK's National Crime Agency told IT Pro.

"We are confident that these requirements are being taken into account, and that there is broad consensus on the need to retain our ability to share intelligence, biometrics and other data at speed. It is also vital to ensure we can continue to provide a quick, efficient and dynamic response to crime and criminals impacting the UK and its citizens, be it from serious and organised transnational crime or local level volume crime at the heart of UK communities."

Prime minister Theresa May announced a string of measures today aimed at bolstering the tech sector ahead of Brexit.

It will be investing 21 million into its startup quango, Tech City UK, as well as doubling the number of visas the UK offers to skilled foreign workers, amid fears that Brexit will cut off the country's access to a digitally-skilled workforce from abroad.

"Technology is at the heart of our modern Industrial Strategy, and we will continue to invest in the best new innovations and ideas, in the brightest and best talent, and in revolutionary digital infrastructure," said May.

"And as we prepare to leave the European Union, I am clear that Britain will remain open for business. That means government doing all it can to secure a strong future for our thriving tech sector and ensure people in all corners of our nation share in the benefits of its success."

Startup investment

Tech City UK, a primarily London-focused organisation with a remit to develop digital skills and support growing businesses, will rebrand as Tech Nation as a single body covering the entirety of the UK.

Instead of focusing on the development of tech in isolated areas, Tech Nation will be a national organisation designed to encourage startup growth outside of the capital. The 21 million is expected to be invested over the next four years.

As part of the investment, the body will aim to provide 40,000 people with the chance to develop the digital skills needed to start their own businesses, while support will also be offered to 4,000 existing tech businesses through targeted growth programmes.

Tech Nation will also be tasked with encouraging businesses to engage with emerging technology trends, including artificial intelligence and fintech, by enabling them to connect with potential investors and development schemes.

"This new funding is an important part of our plans to make the UK the best place in the world to start and grow a digital business, with the benefits spread right across the country," said Matt Hancock, minister for digital.

"This regional network will accelerate the growth of the digital tech sector, cement the pipeline of talent and spark the next generation of innovative firms to seize the future opportunities of digitisation - bringing jobs, skills and higher productivity to our regions."

Tech Nation will be formed of 11 regions in the UK, the first of which have been identified as Birmingham, Edinburgh and Glasgow, Belfast, Cardiff and London, with more due to be announced in the Budget speech on 22 November.

Doubling Tier 1 visas

In a bid to encourage more talent from overseas, the government is also doubling the number of Tier 1 visas being offered from 1,000 to 2,000, although this number includes all 'exceptional talent' and is not exclusively tied to the tech industry.

"Doubling the number of tech visas is a welcome and practical step towards supporting the UK's fastest growing sector," said Antony Walker, deputy CEO of industry lobby group TechUK. "As our economy continues to digitise, more and more businesses depend upon tech talent to support their growth. This isn't just a London phenomenon. There is going to be huge demand for tech skills in businesses right across the country."

However, Walker added that the government not only needs to expand the number of visas available for highly skilled talent, but needs to make the process of securing talent easier for businesses.

"For the announcement to be truly valuable, the government must couple it with further flexibility on Tier 2 high skilled talent. It must also address concerns about the speed and costs associated with Tier 1 and 2 visas to ensure they can be used by companies large and small," he said.

"International tech talent makes a huge contribution to the UK economy. For every ten highly skilled jobs that are created an additional four lower skilled jobs are created. The tech sector is increasingly the backbone of the economy, and making sure it can thrive post-Brexit is in everyone's interest."

Broadband investment

As part of the digital push, the Department for Digital, Culture, Media and Sport also announced a 2 million incentive to increase the number of businesses taking up gigabit fibre connections, as part of its 23 billion National Productivity Investment Fund.

Internet suppliers in Aberdeenshire, Bristol, Bath, North East Somerset, Coventry, and West Yorkshire Combined Authority, which includes Leeds and York, will be able to sign up to the scheme and offer local business customers vouchers worth between 500 and 3,000, which can be used to cover installation costs.

More details will be revealed in the Budget speech expected on 22 November.

The UK's tech sector has more international workers than any other in the country's economy according to a new report, which could cause problems when Britain exits the EU.

The research, carried out by Tech City UK revealed 13% of the digital sector is made up of both EU (6%) and non-EU (7%) employees compared to the national average of 10%, comprising 6% EU workers and 4% non-EU.

One of the reasons behind the variation is the level of education of those from further afield than Europe. 17.6% of non-EU workers hold a master's or PhD qualification, compared tojust 10.5% of UK workers and 12.5% of EU employees.

Unsurprisingly, Tech City's report showed that London is a magnet for those from outside of the country, with 31% of the digital workforce being made up of EU and non-EU-based staff in the region. The next most popular region, the South East, has the next highest level of non-UK workers, at 12%.

Although non-EU workers outnumber those from Europe, the latter group is the fastest-growing, with the number of EU citiens increasing from 4% to 6% between 2011 and 2015. This has raised concerns the UK digital sector could lose a decent proportion of its tech workforce when it becomes harder for Europeans to work here following Brexit.

"We know that entrepreneurs are concerned about the extent to which tech communities depend on a flow of talent from EU and non-EU countries to run their businesses," George Windsor, senior insights manager at Tech City UK, said.

"By collating an accurate picture of the mix of nationalities in the sector, we can pinpoint where pressures might exist in the future. This is the start of a programme of work from Tech City UK that will monitor the talent and workforce mix, using the insights gained to help more digital tech businesses fulfil their potential."

Box's UK chief has said that despite fears, Brexit will not lead to a shortage of skilled tech workers for UK companies to recruit.

With the deadline for Britain's exit from the European Union looming ever closer and the negotiations seemingly no closer to making any progress, many companies have expressed concerns that a 'hard Brexit' (in which the UK severs all ties with EU) could result in a lack of qualified professionals across the country.

These worries have been voiced by the tech industry in particular, which depends on highly-skilled immigrants from across Europe to fill many roles in areas such as software engineering, network administration and operations.

However, David Benjamin - senior vice president and general manager of EMEA for cloud storage firm Box - told IT Pro that while the uncertainty surrounding Brexit is one of the biggest challenges for European businesses, he doesn't agree that there will be a 'brain drain' of tech talent leaving the country.

"I'm going to speak from the heart on this, and I'm going to say no," Benjamin said, when we asked if a lack of tech workers was a potential danger. "I'm working on the basis there that there will be a successful conclusion to our Brexit discussion, and that London and the UK will remain a strong force from a tech perspective, and that we'll work very closely with our European partners as well."

"London is an amazing place, but also Berlin is fantastic, I was in Dublin recently - again, that was absolutely amazing. The great thing for me is that these tech communities work better when they work together, and I expect that to continue."

However, other business leaders have attested to Brexit's negative impact on the UK tech industry. When IT Pro asked HPE boss Meg Whitman whether her firm had experienced any ill-effects of the UK's decision to leave the EU, she told us: "Frankly, there's been a bit of a pause in the decision of UK companies, or multinational companies with operations in the UK, to continue to invest in their IT."

Tech recruitment firm Hired surveyed businesses last year, finding that the UK's skills gap will worsen if the UK can't easily employ talented tech workers from the EU.

Investors think Brexit will have a negative effect on the value of UK tech businesses, but the economy will bounce back and the long-term future holds a much more positive outlook.

The report by accounting firm Moore Stephens has suggested that more than half of investors think that the valuations of UK tech firms will drop over the next 12 months, although 44% think mergers and acquisitions will become a major part of investment. Just over a quarter of investors think the number of such deals will fall.

Moore Stephens think the tech industry is in a much stronger positions than traditional industries though and for this reason, it won't be as negatively affected as other sectors.

"From a digital standpoint the UK is and will be one of the world's key digital destinations and hard for investors to ignore," Damian Ryan, partner at Moore Stephens, said. "Investors are still looking to make deals, especially when the technology involved has significant commercial potential.

"The tech sector doesn't have the same investment characteristics as more traditional business sectors so although Brexit may bring about a slight confidence knock, our research suggests that investors are still keen on backing UK tech companies."

A number of major investments have been made over recent months by larger companies seeking to carve out a part of the innovative UK tech sector. Japanese tech giant Softbank announced in May that it would be sinking more than $500 million into UK-based VR startup Improbable, considered to be the largest European Series B investment ever.

Other findings from the report showed the attitudes of trade buyers, such as large tech companies were more positive than private equity (PE) and venture capitalist (VC) investors because they will use the technologies to transform the organisation rather than simply making money. Additionally, trade buyers will use their own shares to buy other companies, meaning they are less sensitive to high valuations compared to PE and VC investors.

"The impact of Brexit negotiations will no doubt cause short-term waves but ultimately it's clear that the sector has belief in the ability of the UK to ride out the storm, and that the talent and investment will continue to see the UK as being at the vanguard of the global tech space," John Stanford, Head of Moore Stephens' Brexit Workgroup added.

Three government departments will share their data on citizens to develop a digital immigration system after Brexit, improving the prospects of both those coming into the country and existing UK residents.

Home Office, HM Revenue & Customs and the Department of Work and Pensions (DWP) will share the information they hold and introduce a system to make it easier for employers and public service departments to check immigrants' identities, according to an anonymous source who revealed the documents to the Guardian.

The document, called Border, Immigration and Citizenship System After the UK Leaves the European Union, will apparently be "as digital, flexible and frictionless for individuals and employers as possible."

It includes a portal where employers and any other party that needs to find out information about those entering the country can check an individual's immigration status and "take action where necessary." The portal will link together all the information about each person, including their tax records, benefit status and other records in a fully digitised way.

The report also goes into detail about other plans when the UK exits the EU, including employment restrictions on those who come to the UK from other countries in the EU, saying it will give preference in the job market to resident workers. EU nationals would be restricted from seeking work and reduce the opportunities for workers looking to settle in the UK for long periods of time.

"We are clear that, wherever possible, UK employers should look to meet their labour needs from resident labour. It is now more important than ever that we have the right skills domestically to build a strong and competitive economy," the paper said.

The government also plans to scrap the rights for extended family members being able to reside in the UK. "We propose to define family members as direct family members only, plus durable partners," the report said. For a spouse to be allowed entry, the UK resident must be earning a minimum of 18,000 a year.

"Put plainly, this means that, to be considered valuable to the country as a whole, immigration should benefit not just the migrants themselves but also make existing residents better off," the report finished.

The proposals are an attempt to address net migration, which the government aims to cut from 250,000 annually, down to "sustainable levels" in the tens of thousands.

The government today published plans to overhaul the UK's data protection regulations, in order to align UK law with corresponding measures being introduced by the European Union.

Part of the proposals will see the introduction of the "right to be forgotten", allowing UK citizens to request that companies delete their personal data from any records, as well as demanding social media sites to delete data they posted as children - something the EU is not implementing.

The Information Commissioner's Office (ICO), the UK's data protection watchdog, will also be able to hand down tougher fines against firms that mishandle personal data.

Firms which are found to be in breach of the new data protection bill will face fines of up to 17 million, or 4% of global turnover, whichever is highest. That's up from the current 500,000 cap imposed by the Data Protection Act 1998.

The Data Protection Bill will replace the current Data Protection Act that came into force in 1998, and which is considered inadequate for dealing with modern data processing.

Digital minister Matt Hancock, who was responsible for drafting today's proposals, described the new Data Protection Bill as "one of the most robust, yet dynamic, set of data laws in the world".

"It will give people more control over their data, require more consent for its use, and prepare Britain for Brexit," he added in a statement.

Information commissioner Elizabeth Denham said: "We are pleased the government recognises the importance of data protection and its central role in increasing trust and confidence in the digital economy and the benefits the enhanced protections will bring to the public."

The bill mirrors proposals set out under the EU's upcoming General Data Protection Regulation(GDPR), which will apply automatically in the UK on 25 May 2018, as it will in all EU member states. However, once Brexit completes, GDPR will no longer apply to the UK, meaning it must draw up its own laws. Today's Statement of Intent is the first step in doing so.

GDPR measures include making data more portable, so it can be moved easily between providers, and ensuring companies are forced to immediately disclose details of a security breach if it involved the leak of personal data. It will include similar tough fines, of up to 20 million, and will hand EU citizens the right to be forgotten, as well as force organisations to gain clear opt-in consent to use and process people's personal information.

By enshrining like-for-like regulations into UK law, it is likely that the UK will be 'whitelisted' by the EU, allowing UK and EU businesses to move data through both areas without interruption.

"Bringing EU law into our domestic law will ensure that we help to prepare the UK for the future after we have left the EU," said Hancock. "We are committed to ensuring that uninterrupted data flows continue between the UK and the EU and other countries around the world."

The bill aims to make it far easier for citizens to prevent companies from using their personal data without their consent, and, similar to GDPR, any companies seeking to collect information will soon be required to obtain "explicit" consent to process that data.

The scope of what constitutes personal data will also be expanded to include IP addresses, DNA and internet cookies.

Tom Thackray, innovation director at CBI, welcomed the proposals, saying they "strike the right balance in improving standards of protection while still enabling businesses to explore new products and services".

"In the modern economy, data has huge value and its innovative use leads to better services and more productive businesses. But firms know that this ability to innovate is dependent on customers having confidence that their information is well protected," added Thackray.

Javier Ruiz,policy director at digital rights campaign organisation Open Rights Group, welcomed the move to enshrine GDPR legislation into UK law, saying: "It will strengthen everyone's ability to control what data can be collected about them and how it can be used."

But he added: "These laws could be fundamentally altered after Brexit. The government must explain how these data protection rights will be guaranteed after the UK has left the EU.We are disappointed that UK ministers are not taking up the option in EU law to allow consumer privacy groups to lodge independent data protection complaints as they can currently do under consumer rights laws."

London is the de facto hub for tech startups in Europe after Silicon Valley, it's the place to to find developers, accelerators and investors. But London's dominance may be at an end, as the ecosystems in Berlin and Paris mature and Brexit starts to bite.

Stats from venture-capital firm Atomico reveal VC funding of $2.7 billion in France over 2016, pipping Germany's $2.1 billion.

That still doesn't top London's $3.7 billion, though.

That funding lead is one of many reasons that there's no cause to panic yet, notes Gerard Grech, a VC funder and CEO of Tech City UK. While that job title makes him rather likely to promote the good news about London, he has more recent figures to back it up. "The latest research from London & Partners shows that since last year's referendum British tech companies had received 2.4 billion of venture capital funding," says Grech. "This was more than double the VC investment in Germany and three times what it was in France."

London has a solid lead in other areas, too. Tom Wehmeier, head of research at VC firm Atomico, points to its dominance in capital, developers, angel investor network, and even the number of meetups planned by the community.

Previous startup successes also weigh in London's favour, says Grech, with more than a third of Europe's tech unicorns based in London, bringing expertise, angel funding and drawing talent. Plus, four of Europe's biggest VC investors call London home Index Ventures, Accel, Balderton Capital and Atomico.

Brexit bites

But there's also Brexit. At this early stage, no-one knows what Brexit will mean for the UK including the politicians attempting to deliver Britain's exit from the EU but a more restricted flow of talent could mean fewer founders and developers can work from the UK, while predictions of banks moving to the continent could cut available capital and hit the important fintech sector.

Not everyone is convinced Brexit is all doom and gloom for London's fintech. "There has been talk that the fintech sector will be particularly affected but none of the fundamentals that attract fintech companies to the UK have changed overnight: there is still a supportive regulator, great resources of talent and willing investors," says Grech. "Also, the practical implications of starting a financial services business in Europe are considerable. Meanwhile, fintech companies that sell their services abroad are benefitting from the weaker pound right now."

Atomico's Wehmeier suggests Brexit won't lead to an exodus of startups from London. "In our view, it's far less likely that you'll see companies up sticks and move, and even less likely that will happen to entire sectors, but inevitably we'll see some [depart]," he says. "But we'd expect that to be dribs and drabs much more a trickle than a flood."

On the skills and talent front, Brexit could prove more problematic. "Brexit does have implications for the talent employed by the UK tech sector and we face uncertainty in labour movements," says Jeremy Silver, CEO of Digital Catapult.

Although concerns remain about future immigration levels and the number of British students taking computer science courses, there's still plenty of talent to choose from, according to Grech.

"If you want raw talent, there are 400,000 students in the capital alone, in some 40 universities and colleges, many of which are renowned across the world," he says, adding London also has strong capital markets, a booming creative industry, and a "multicultural, tolerant atmosphere".

Because of all that, he says, London will always be a draw, even with Brexit looming.

"In the last six months, we have seen record numbers of people apply for our Tech Nation Visas for skilled tech workers which demonstrates that Brexit has not deterred the brightest and best from coming here," Grech claims.

London doesn't only need to draw developers, engineers and other staff it needs to convince founders, too. "Rather than see companies established here moving out, the bigger question is will you see entrepreneurs who would have otherwise thought about coming to the UK to start their business go somewhere else instead," wonders Wehmeier. "That's one potential area where there's some potential risk."

European ecosystem

It's not only Brexit that's causing founders to stay on the continent the startup ecosystem is booming across Europe. Wehmeier said the key question founders consider when choosing a home base is whether a city is a viable launching point for a startup on a global scale. "Entrepreneurs, they're like athletes or artists they're born everywhere in the world," he said. "There's no geographic monopoly on that entrepreneurial talent. If you have a great idea it can come from anywhere. But of course to take an idea into a business and scale it up, there are things that you need around you to give yourself the best shot."

He adds: "Unquestionably, London is one place you can do that but so are Berlin and Paris. We actually believe that increasingly now the further you look across Europe, the more places there are where that's true." That includes Stockholm, Helsinki and Madrid, and Atomico has recently made investments in startups based in Munich and Bristol. All a city needs is a great talent pool, access to customers and capital. "There's a number of places now in Europe where you can get those things."

"What's changing across Europe as a whole and this isn't Brexit is the strength of the ecosystem," he adds.

Indeed, rather than Paris and Berlin and the rest of the continent being seen in opposition to London, Grech said it'd be ideal to see Europe and London working together to counter Silicon Valley's dominance. "If we want to produce a company that can really challenge Silicon Valley, we in Europe should be working together, not scrapping for the talent," he says.

Beyond London

Europe's startup ecosystem is expanding and maturing, but so too is the rest of the UK. "Hubs are emerging beyond the traditional capital cities that have been dominant," Wehmeier says, noting Atomico has recently invested in companies in Munich and Bristol. "I think ultimately we see this as a huge positive that hubs are springing up all over the place."

Silver agrees that we shouldn't forget the rest of the UK. "It's not all about London," he says. "Recent ODI research points towards the huge amount of tech innovation going on across the UK and this is something we need to support and shout about."

That's why Digital Catapult offices are scattered about the country, he explains. "Yes, London needs to perform against other European capital cities, but in order to keep our economy balanced, we need to continue to nurture innovation and tech clusters outside of London."

A National Investment Fund for startups would "struggle" to bridge any gap in lost funding from its EU equivalent, according to a lobby group for the UK's tech industry.

The UK government floated the idea of creating a national fund based on the results of a Treasury consultation, published yesterday, that revealed a 4 billion gap in funding between UK businesses and their counterparts in the US.

It believes a 'National Investment Fund' could close this gap, making startups more competitive against the US once the UK leaves the EU, especially if startups lose access to the EU's own funding initiative, the European Investment Fund (EIF).

"Britain is an innovation powerhouse and it's vital that we make sure our cutting-edge firms have the funding they need to meet their potential and conquer new markets," said chancellor Philip Hammond. "Meeting this challenge will boost our productivity and enable us to create more well paid jobs across the UK."

But while TechUK CEO Julian David welcomed the idea of the fund, he urged the government to make sure the UK stays inside the EIF. According to figures provided to IT Pro, the EIF supported 11,000 UK SMBs with around 8bn in funding last year alone.

"The EIF continues to be a key investor into UK tech, and any new post-Brexit system considered as part of this consultation must seek to maintain the UK's link to this European-wide funder," said David. "A new national fund would struggle to compete with such an established source of support sitting just across the Channel."

He added: "Determining how the UK can improve its own funding mechanisms to help businesses of the future grow must sit alongside continuing to be part of established European systems post-Brexit. We should not be looking to reinvent the wheel."

UK businesses, particularly startups, have expressed concerns that the government will be unable to provide the same levels of funding that have been enjoyed as part of the EU. A report published in March found that one in 10 London startups had already lost funding as a result of the Brexit vote, with almost a third finding it difficult to grow their business. However, another study found that VC investment into London startups actually increased post-Brexit, from 245 million immediately after the EU referendum, up to 345 million in the first quarter of 2017.

The exact nature of the fund has yet to be decided, but it could be launched as a partnership between public and private sectors, or it could be fully attached to the government's balance sheet and sold off once it's established.

The government identified that fewer than one in 10 UK firms that receive seed funding go on to get fourth round backing, compared to nearly 25% of firms in the US. It also said it wants to boost the number of 'unicorns' emerging from the UK, firms with valuations above 1 billion - currently the majority of these startup firms are based in the US or China.

New research has found that 90% of UK businesses are optimistic about growth over the next 10 months, although the vast majority also said the Brexit vote has impacted their decisions for IT investments, with some freezing budgets entirely.

A report released this week by cloud and network provider Interoute revealed that 63% of British firms are planning for significant growth over the next year, while a further 27%, although taking a conservative outlook, also expect to grow.

However 96% of firms agreed that the current economic climate, coupled with the fallout from the vote to the leave the European Union, has made IT investments difficult. Around 40% said that Brexit made them nervous to invest in any long-term IT projects, while a further 38% said it has forced to them to adopt cloud-based solutions to allow for flexibility in their decision making.

In the survey of 120 UK businesses, only 6% felt that the Brexit vote and the current economic climate have had no impact on IT decisions.

Digital transformation seems to have been hit the hardest, as the majority of firms (52%) believe the changing political landscape has made it difficult to invest and achieve long-term aims. While 24% said they were actively pursuing digital transformation initiatives, almost as many (23%) said they had cancelled at least one transformation project, with a further 18% putting budgets on hold entirely.

There is some good news, however, as the survey found that the majority of businesses remain optimistic about the change, taking it as an opportunity to invest in new infrastructures. Over 60% said they were developing new infrastructures to accommodate for the uncertainty and remain competitive, the majority of which includes migrating a significant portion of business activities to the cloud.

Commenting on the study, Interoute CTO Matthew Finnie said: "This study proves that most British enterprises are proactively making technology decisions and are prepared to pivot quickly to remain competitive in the face of a changing and uncertain market."

"This requires an ICT infrastructure that enables, not inhibits, change. Rather than handcuffing an organisation to a specific vendor or inflexible infrastructure choice, it is about ensuring the platform and provider you choose gives you the freedom to change and adapt as the market does."

The majority of businesses surveyed (73%) also expressed the importance of full integration between the cloud and network, yet 52% said they faced significant challenges when trying to integrate legacy systems, which remains a key priority for most digital transformation projects.

The UK's government technology market could be worth as much as 20 billion by 2025, according to a new report that predicts a return to large IT contracts and a short-term boost from Brexit.

The State of the UK Govtech Market report, published this week by investment firm Public, said that government reforms, especially since 2010 after which the Government Digital Service was created, have "seen the UK lead the world in government digitisation".

"No other country currently combines size of market with such a ready public acceptance of the digital world," said authors of the report, Daniel Korski and Alexander de Carvalho.

Growth in the government technology market would be "fuelled by a renewal of large IT contracts, a shift towards procurement from SMBs, investment into emerging technologies applied to public needs, and by the rise of companies whose products enhance not only the lives of the individual but also have impacts which more generally permeate society."

The authors added that devolution was now bringing opportunities to cities such as Birmingham, Manchester and Bristol, which are showing the way for technology-enhanced approaches to public services.

They were also relatively upbeat about Brexit, saying it presents opportunities and risks. "Even the UK's departure from the EU may herald opportunities, as it will require, to a short deadline, the complete reformation of certain services including rural payments and border control," said the authors.

However, an analyst told IT Pro recently that the government may step away from politically risky IT projects, like the controversial rural payments project, now it is a minority.

"If Brexit leads to a larger rethink of governmental systems, from rural payments to customs arrangements and identification, then it must inevitably drive a significant adoption of new technologies and new suppliers," the report continued.

"If leaving the EU leads to a rethink of procurement policies and regulations, with a preference given to UK firms, then there will undoubtedly be a short-term boost to a sector which is still very UK-based."

But it warned that if this leads to reciprocal barriers for UK startups seeking to enter European markets, then the government "would have to redouble its support for GovTech startups to succeed in non-European markets".

Almost half of the UK's skilled workers could leave the UK in the next five years if ministers fail to arrange a fair deal for EU citizens in Brexit negotiations, according to Deloitte.

While 47% of EU workers said they were preparing to say goodbye to the UK, more than a third of non-UK nationals said they would leave too, leaving a deficit of up to 1.2 million people working in the UK's skilled industry, the consultancy's survey of 2,242 EU and non-EU workers found.

The UK government has offered to allow EU business owners and employees the chance to apply for permanent residency in the UK after living here for at least five years - that applies to both current EU workers living in the UK and any who move to the UK before an as-yet undefined cut-off point.

However, the UK has also said it plans to force EU citizens to apply for biometric ID residence documents confirming their 'settled status', which would confer upon them the same rights and privileges as British citizens.

But a quarter of respondents to Deloitte's survey who said they were planning to leave said they don't plan on waiting until the five years is up, bringing their departure forward to just three years because of the UK's "volatile" economic climate. Additionally, the weak pound means workers are earning significantly less than they were a few years ago.

If highly skilled EU workers do leave, it will make a bad situation even worse for the UK, as employers are already struggling to fill roles in high demand, such as those that demand digital skills, Deloitte warned.

"The UK's cultural diversity, employment opportunities and quality of life are assets that continue to attract the world's best and brightest people," said David Sproul, chief executive of Deloitte for north-west Europe.

"But overseas workers, especially those from the EU, tell us they are more likely to leave the UK than before. That points to a short to medium-term skills deficit that can be met in part by upskilling our domestic workforce but which would also benefit from an immigration system that is attuned to the needs of the economy."

The consultancy firm has warned UK employers they need to put pressure on the government to ensure the conditions are favourable for European skilled workers to remain in the country.

A lack of the right cybersecurity professionals is forcing companies to rely more on technology, which may compromise a business' security. Cyber security and business protection recruitment agency Acumin has published a report that investigates the shortage of cyber security skills in organisations. Reasons for the shortage include the continuing lack of women in the workforce, a heavy reliance on qualifications rather than a demonstration of skills and companies being reluctant to put near-qualified individuals into positions and allow them to grow through experience. According to the report, the presence of women in cybersecurity has been estimated at around 11% and females workers are often paid less than their male counterparts. Acumin stated that raising their pay may attract the right talent to organisations, which is critical for securing their future. The report also underlined that individuals who have core competencies for cybersecurity work don't necessarily seek out professional qualifications. It added that not everyone who has passed a qualification test will be good at the job and some may come undone when confronted with a real-world problem. In order to close the gap, Acumin suggests starting with a broad and diverse pool of candidates for each position including people with little or no formal education and then present them with real-world problems. This benefits the company as it will "weed out hires who lack the necessary experience" and allow candidates to properly demonstrate their skills. The report also underlined the importance of building incentives within the organization in order to attract and retain employees. This includes ensuring that a company offers upward mobility to female employees, which will help with employee retention and distinguish the company from competitors.

16/05/2017: Did lack of security workers worsen ransomware attack? The ransomware attack that spun out of control across the world over the past week may have been exacerbated by a lack of cyber security experts.

"There is a struggle to find talent necessary to make judgements about the efficacy of cybersecurity controls," Sean Joyce, a principal at PricewaterhouseCoopers LLP's advisory practice, told the Wall Street Journal.

Part of the problem may be the failure of companies to see the value of investing in those with security skills, with Joyce saying CFOs find it difficult to quantify the risks of such attacks, but even when companies want to hire more security staff, it's difficult because of a lack of appropriately trained staff. While that may sound unsurprising in underfunded public organisations such as the NHS, the ransomware also successfully knocked out networks belonging to companies from Telefonica to Renault.

A study by Brocade last month revealed that one in four IT departments felt they couldn't deliver on current business demand down to lack of skills, with 54% concerned about a lack of skilled talent to choose from. A report from Frost and Sullivan suggested there will be 1.5 million unfilled security jobs by 2020. Research from ESG showed 45% of organisations surveyed believed cybersecurity shortages were a problem, while 40% of staff said the skills gap had already impacted their organisation.

What can be done? Marc Van Zadelhoff, general manager of IBM Security, suggests in the Harvard Business Review that the industry stop limiting hires to those with four-year degrees in computer science. IBM has tested that by creating a class of "new collar" jobs, finding the right people and training them on the job.

"Some characteristics of a successful cybersecurity professional simply can't be taught in a classroom: unbridled curiosity, passion for problem solving, strong ethics, and an understanding of risks," he wrote. "People with these traits can quickly pick up the technical skills through on-the-job training, industry certifications, community college courses, and modern vocational and skills education programs." It's worked for IBM, making up a fifth of its cybersecurity hires in the US since 2015.

That's helped by training younger students in cyber skills, he noted, and here in the UK, one government scheme hopes to see 5,700 teenagers trained in security within the next five years. The high-profile success of the self-taught 22-year-old security researcher who helped stop the ransomware attack last week may help encourage others to step into the industry, though the invasive reporting by tabloids who outed his identity after he asked for privacy may discourage others.

17/01/2017: UK's cyber skills gap is one of the world's worst

UK businesses may be at risk of increased cyber threats in the coming years due to a severe shortage of skilled cyber security experts, according to job search website Indeed.

Britain's digital security skills gap is now ranked as the second worst in the world, according to Indeed data comparing employer demand and the number of people searching for roles.

The number of job searches for cybersecurity roles reached just 31.6% of the number of jobs posted to the website, making Britain's skill gap second only to Israel.

Increasing numbers of cyber threats in the UK has led to a surge in demand for skilled cyber security applicants, leading to a 31.9% rise in the number of advertised roles between 2014 and 2016.

"2016 saw a spate of big corporations - and even the US electoral process - suffer high-profile data breaches, but beyond the headlines, cybercrime is a threat to orgranisations of all sizes," said Mariano Mamertino, EMEA economist at Indeed.

"As cyber attacks increase in scale and sophistication, British employers are racing to recruit staff with the skills and experience needed to protect their vital data," added Mamertino.

Britain's skills gap grew by 5% during the 2014 to 2016 period, a number only exceeded by Brazil and Canada, according to Indeed's statistics. Meanwhile, Ireland has managed to attract a surge in applicants thanks to a booming technology sector, shrinking its skills gap by 14%.

Network security expertise topped the most sought after skills by employers, accounting for 223% more job postings than mobile security. But the fastest growing sector of job searches was cloud security, rising 139% over the same period.

"Sadly the supply of skilled workers isn't keeping up with employer demand, and Britain's cyber security skills gap is getting worse," added Mamertino.

Amazon Web Services (AWS) announced the creation of its re:Start programme last week to help re-skill out of work young people and military veterans to take on digital roles. Starting in March, AWS plans to train 1,000 candidates for roles in entry level technology positions, alongisde industry partners such as ARM, SAGE and Cloudreach.

However the problem is approaching its crisis point, according to Mamertino, and British businesses will be put at risk if the expertise cannot be sourced to deal with modern security threats.

A report published in June 2016 warned that the skills gap could widen following the Brexit vote, as companies may find it more difficult to attract the oversees talent needed to fill roles, increasing the demand for homegrown talent.

"This should serve as a wake-up call to Britain's tech sector - it must pull together to up-skill and attract more people into cybersecurity roles," added Mamertino.

The uncertain political atmosphere in the UK following the EU referendum last June has caused a noticeable slowdown in the purchase of IT equipment, according to HPE CEO Meg Whitman.

Asked by IT Pro whether the US tech giant had seen any impact on its business, Whitman said: "Frankly, there's been a bit of a pause in the decision of UK companies, or multinational companies with operations in the UK, to continue to invest in their IT."

Whether this situation is temporary or long term, Whitman said she didn't know, but acknowledged it has been "one of (HPE's) weaker markets in Europe".

"I think it's because there's some uncertainty about how all this will play out - I can tell you, running a big multinational company, uncertainty is not our friend," Whitman said. "You're making long-term decisions, long-term bets and if there's uncertainty about how things are going to turn out, you're a bit more cautious.

"It doesn't mean you won't go back in and spend that money, but your just like 'You know what, why don't I just wait a bit and see what will happen' and I think that's our experience in the UK market."

Nevertheless, she said she had confidence the UK "sort their way through this".

"I think actually the British economy will remain quite strong, but I think there will be another year or two of uncertainty," she concluded.

Whitman's comments were made before the General Election on 8 June, which has left the UK with a hung parliament and a jittery tech sector.

The lead designer of the iPhone has spoken out about the value of immigration for the tech and business sectors.

Apple's head designer Sir Jonathan Ive spoke to BBC Radio 4's Today programme about the vital role that immigration and the large-scale intermingling of different cultures plays in Silicon Valley.

"[One] thing that is particularly unusual about the area is that people have travelled from all over the world to participate in the energy and to join other like-minded people to be here," he said. "And so I think there's a tremendous sort of diversity, a cultural diversity, but there's also, I think, that sense of people electing to be in a particular area, to develop their ideas and to see what's possible."

"That general principle [of people coming together] is terribly important for creating a context for multiple companies to grow and in a healthy way explore and develop new products and new product types," Sir Jonathan said. "I think at Apple we've been very clear on how important it is that we have a diverse pool of talent that we can hire from."

In the midst of calls for stricter immigration laws and lower caps following Brexit, some British businesses are worrying about the impact that less immigration will have on their ability to hire skilled workers, particularly tech firms.

These fears may not be unfounded, as early figures indicate that EU migrants have already begun to desert Britain en masse, potentially including many skilled IT staff. The Institute of Directors has already warned that employers "risk losing key members of staff in positions that cannot easily be replaced from the homegrown pool available".

Digital transformation efforts are being harmed by 'Brexit paralysis', as senior IT leaders fail to make plans for the UK's EU exit, Avanade has warned.

According to the company's poll of 100 senior IT decision makers, almost half of them have no plans for adjusting their IT strategy in response to Brexit. This is in spite of the fact that nearly 70% report that they are very concerned about Brexit's potential impact.

Topping the list of concerns for IT leaders is the plummeting value of the pound, which over three-quarters of respondents fear will force them to cut costs and streamline. Two-thirds are also worried about a lack of skilled staff as stricter immigration laws come into force.

Another key concern is data protection and sovereignty. Cloud is already one of the top three priorities for more than half of IT decision makers, but the looming spectre of GDPR adds an extra layer of urgency to the issue. A report by Blue Coat last year revealed that just 2% of cloud apps are GDPR-ready, which could spell huge fines for businesses.

"Nothing kills a business faster than inertia," said Avanade's UK general manager, Darren Hardman. "Brexit has put the spotlight on certain specific issues, but the fundamental requirement for digital transformation remains the same."

"The clock is ticking, and the 41% of IT decision makers who are slowing down their IT investments should be looking nervously at the 56% of their peers who say they are accelerating," he added.

The looming spectre of Brexit doesn't necessarily spell doom for the IT industry though, as more than 65% of surveyed IT leaders said that they believed they could gain a competitive advantage if they navigated Brexit correctly.

Brexit uncertainty has reduced the amount of foreign tech workers looking for jobs in the UK, with companies based here looking less to hire them, too.

Job search marketplace Hired has released a report today which details its findings about the attitudes of foreign workers towards the UK coming out of the EU. The company took the data from its marketplace, where it has over 20,000 candidates and 850 clients in the UK. It monitored how active foreign candidates were on the platform and how clients interacted with them. It also conducted a survey of over 200 UK based candidates.

Hired found that the number of foreign candidates in the pool was less than half than what it was pre-Brexit. UK employers are also less confident in recruiting from abroad since the Brexit vote.

UK companies sending offers to candidates fell from 25% at the beginning of 2016 to just 18% a year later. The representation of foreign candidates in their total talent pool also decreased by 60% since Brexit.

Hired surveyed its UK based candidates and found that 71% said that the UK's exit from the EU tech sector would damage the tech industry. UK workers listed Brexit as their biggest concern, followed by happiness at work, personal development and salary.

77% of the workers said there would still be uncertainty a year from now and 31% anticipate it being harder to find a job in the next 12 months. 70% of the people Hired surveyed have considered leaving Britain in the wake of Brexit and they plan to move to other European cities, although North America, and Australia were also popular relocation destinations.

In addition to this, 41% of all tech workers told Hired they are less likely to start their own business in the UK as a result of Brexit.

Mehul Patel, CEO of Hired, said the company expected foreign workers to be less active on the platform as they don't know their immigration status here so they won't take a new job or move.

"What was also interesting is that we saw a 30% drop in companies asking foreign candidates to interview. Both sides, both candidates and companies, are sort of standing still right now, while there is uncertainty over what Brexit will mean" he said.

Patel highlighted that companies could look at workers from outside the EU through the tier 2 skilled worker programme and look at more home grown talent. He suggested to broaden the base of schools companies look at when hiring and look for people with the right skills but without a computer science degree, as you can test them to make sure they are capable.

He said that it was staggering so many of those asked said they are less likely to start a company here. "If those development jobs are now in Europe you can imagine that UK workers are going to try and get language skills to take advantage of jobs in Europe. The concern here is whether there will be a brain drain," he said.

Patel underlined that once the new rules are in place people will feel more confident in immigrating here and the pessimism will go away. He added: "I think innovation is driven by talent and you have to be a talent magnet. PM May has talked about the UK being a global talent magnet, mayor Khan is talking about London being a talent magnet and so I think people want that to happen, the next question is just when it happens."

Patel also pointed to the stormclouds on the horizon and underlined that there is a sense of urgency in getting the new immigration rules in place.

"The tech economy in London is doing amazingly well, but if the problems around getting the best talent to the UK isn't solved then long term it could impact how quickly this market grows," he said.

UK Prime Minister Theresa May has called a snap election for 8 June, in a bid to clear the path for Brexit.

Speaking outside 10 Downing Street this morning, May said she has "reluctantly come to this conclusion" as a way to increase her party's majority and thwart parties who plan to oppose the government's Brexit strategy.

"Division in Westminster will risk our ability to make a success of Brexit and it will cause damaging uncertainty and instability to the country," she said.

Defending her Tory government's plan to exit the single market and restrict freedom of movement, as well as negotiating the UK's own free trade deals, May said opposition parties want to undermine the UK's exit from the EU.

The Liberal Democrats want UK citizens to get a vote on the manner of the UK's departure, and the Scottish National Party (along with the Lib Dems, Plaid Cymru and Labour rebels) voted against the government's European Union Bill in Parliament in February, while it is pushing for a second Scottish referendum.

Under May, the Conservatives plan to reveal little of their negotiation strategy with the EU, and do not want Parliament to get a vote on the result of that negotiation.

The prime minister has previously said there will be no election until 2020, but her party's slim majority in Parliament was coupled with some high profile defeats in the House of Lords, where the upper house voted to guarantee the rights of EU citizens already resident in the UK - this was later rejected by the Commons.

May said: "Our opponents believe that because the Government's majority is so small, our resolve will weaken and that they can force us to change course. They are wrong."

She will need to secure a two-thirds majority in Parliament for the election to go ahead.

Read IT Pro's roundup of parties' 2015 election tech manifestos

If the Conservatives win a larger majority the government can continue to implement its IT transformation strategy, which was revealed in February after a year delay. It has recently come out strongly against the use of encryption, and the Tories won the 2015 election after reforming Whitehall IT with the creation of the Government Digital Service in 2011.

Under leader Jeremy Corbyn, Labour wants to create a 'Universal Service Obligation' to improve high-speed broadband access, and create digital passports - essentially verifiable online identities - for citizens.

In response to May's snap election, Corbyn said: "I welcome the Prime Minister's decision to give the British people the chance to vote for a government that will put the interests of the majority first.

"Labour will be offering the country an effective alternative to a government that has failed to rebuild the economy, delivered falling living standards and damaging cuts to our schools and NHS.

"In the last couple of weeks, Labour has set out policies that offer a clear and credible choice for the country. We look forward to showing how Labour will stand up for the people of Britain."

The Liberal Democrats' 2015 manifesto aimed to double R&D spending, attract foreign STEM skills as well as boost STEM education inside the UK, and grow GDS's remit to cover local government.

Responding to May's announcement, a Lib Dem statement read: "The Liberal Democrats are the real opposition to the Conservative Brexit Government and the only party fighting for a Britain that is open, tolerant and united."

A cyber attack may be behind an outage that delayed thousands from registering to vote ahead of the EU referendum, according to a Parliamentary committee.

The public administration and constitutional affairs committee (PACAC) said it could not rule out a DDoS-style attack perpetrated by a foreign power, like Russia or China, in its a nalysis of the crash affecting the UK government's Register to Vote site last June.

As a result of the outage, the registration deadline was extended from 7 June to 11.59pm on 9 June.

Unprecedented traffic was blamed for the site falling over, with the government seeing a spike in users rushing to sign up in the last weeks before the Brexit referendum.

But while PACAC's own investigation into the affair recognised the "exceptional surge in demand" among citizens to register their rights to vote, it also said the crash "had indications" of being a DDoS attack, pointing to the timing of the traffic and the sheer volume of applications - with 515,000 being made on the day of the failure.

"Although the Committee has no direct evidence, it considers that it is important to be aware of the potential for foreign interference in elections or referendums," it said, adding that foreign states' motives for such an attack could be to influence how people vote.

"The US and UK understanding of 'cyber' is predominantly technical and computer-network based," PACAC's report read. "Russia and China use a cognitive approach based on understanding of mass psychology and of how to exploit individuals. The implications of this different understanding of cyber-attack, as purely technical or as reaching beyond the digital to influence public opinion, for the interference in elections and referendums are clear."

The Cabinet Office refuted the suggestion that the website was hacked, with a spokesperson saying: "There is no evidence to suggest malign intervention."

They added: "We have been very clear about the cause of the website outage in June 2016. It was due to a spike in users just before the registration deadline. We conducted a full review into the outage and have applied the lessons learned. We will ensure these are applied for all future polls and online services."

PACAC's report does not cite any sources for the hacking allegations. It comes after the US openly accused Russia of interfering in its presidential election, with security agencies blaming Russian hacking for President Donald Trump's surprise victory.

Among other allegations, the US blamed Russia for the release of thousands of Democratic National Committee emails, which WikiLeaks published. Former President Barack Obama ordered an investigation into Russia's alleged involvement.

Since then, Germany and France have sounded alerts about cyber attacks during elections.

At the time of the Register to Vote crash, sources close to government told IT Pro the outage occurred because the website's infrastructure was unable to cope with the huge traffic demands.

It was hosted on an in-house private cloud that could not scale to accommodate the volume of visits. The Government Digital Service, which developed the application along with contractors, did not build in any failover capacity, so when the site fell over, users were not redirected to another instance of the site.

Cyber security firm Veracode's EMEA solution architects manager, Paul Farrington, said the government must ensure it is able to protect future elections from hackers.

"Hacking an entire election is near impossible, but should digital elections be successfully implemented, any cyber criminal hoping to create suspicion and disrupt the result of an election could achieve this simply by affecting just a small number of votes," he said.

"While today we can't be sure as to whether a cyber attack has indeed denied citizens their democratic right, it is yet another reminder of the importance of robust cyber defences to plug vulnerabilities and defend against such potential dangers."

The government today triggered Article 50, meaning the UK will leave the European Union by 29 March 2019.

Prime minister Theresa May's letter notifying the European Council of the UK's intention to leave triggers an exit negotiation process that will conclude with the UK's departure from the EU, which it has been a member of since 1973.

Julian David, CEO of tech industry trade body techUK, said: "The European Union and the UK government now have a responsibility to work together to secure a deal that supports the jobs and livelihoods of citizens across the UK and the EU."

Pointing to the digital sector's fast growth it now accounts for 16% of GVA and 24% of UK exports, as well as three million jobs David added that the negotiations require a "smooth conclusion" for the industry to thrive.

"A chaotic Brexit that results in the UK falling back on World Trade Organisation rules will benefit no one," he said.

Following the Leave vote last June, a TechUK survey of members found that 70% were optimistic about the UK's future after Brexit, down from 93% last March.

Much doubt remains over the UK tech industry's future prospects outside the EU. With years of negotiations ahead, May has ruled out remaining in the single market and appears to be pushing for a hard Brexit.

Ending freedom of movement means it will be harder for UK firms to access foreign talent from the EU and a lack of access to the single market could harm exports if tariffs are imposed on trade.

"Whether you are selling goods online or providing a service made up of technology components that reside in different countries, the cost overhead will only increase if the UK sits outside of a EU Digital Single Market," said Ross Mason, founder of MuleSoft, an application integration platform.

Brexit will produce other complications. The EU's General Data Protection Regulation (GDPR) will come into force in the UK in May 2018 but Brexit will be just a year later, and the UK's withdrawal from the EU will mean this law no longer applies. To continue trading with the EU, the UK must draw up similar legislation once it has left, but there is doubt over what that future data protection policy will look like. The UK's data watchdog, the Information Commissioner's Office, has simply said: "The UK will continue to need clear and effective data protection laws, whether or not the country remains part of the EU."

NetApp's chief privacy officer, Sheila FitzPatrick, said UK businesses must prepare for GDPR regardless and improve their data protection policies in order to trade outside the UK post-Brexit.

"UK companies should not wait for an official UK government framework for data protection," she said. "Instead, businesses need to set their own approach. This means auditing the most stringent compliancy requirements in the countries where they do business with, and then working to meet those regulations."

Startups, meanwhile, are already feeling the affects of Brexit, according to a Tech London Advocates study last week that found 12% of London entrepreneurs have lost potential funding as a result of uncertainty surrounding the leave vote.

Chris McCullough, CEO of London scale-up RotaGeek, a staff scheduling tool, called for UK negotiators to focus on Britain remaining open to business and talent.

But he added: "Personally, Brexit won't change how we do business - especially not in terms of hiring. Hiring the best people, regardless of where they come from, is one of the most important building-blocks for innovation and success in the tech-industry.

"Great things happen in difficult environments. People fear uncertainty but there is a great opportunity in it - now is a time to become more focused."

On the negotiations, TechUK's David said: "Both sides must remember that a good deal for tech is a good deal for everyone. A new relationship must be forged that not only works for today's economy, but for tomorrow's digitally-enabled world."

One in 10 London startups has lost funding since the Brexit vote, according to research published today.

A total of 12% of the capital's entrepreneurs have had investors withdraw from or refuse to contribute to funding rounds since the UK voted to leave the EU last June, London startup body Tech London Advocates' survey of 220 of its members revealed. It also found that a third have found it more difficult to grow their businesses since the referendum.

While 52% of the UK voted to leave the European Union last June, 60% of London's population voted to remain. For startups specifically, access to the EU's single market allows them to market products abroad more easily, and the freedom of movement within the EU offers greater access to tech skills that are hard to find within Britain.

Tom Adeyoola, founder and CEO of Cambridge and London-based Metail, a fashion fitting app for online shoppers, said: "We have seen the fallout from the decision to leave the European Union firsthand. Prospective employees have opted to move to other European firms, or have even chosen to stay abroad rather than return to the UK with one current staff member deciding to accelerate taking a professorship because he felt that research funding would be restricted once Britain leaves the EU.

"The government must work to mitigate the damage from leaving the European Union to startups across the UK, guaranteeing access to international workers, research funding and investment to protect the UK tech industry."

60% of respondents told Tech London Advocates that once Article 50 is triggered it would damage London's position as a global tech hub. Around a quarter believed the capital would feel little impact. A KPMG report released this week found that despite Brexit, London is still the world's fifth most attractive tech hub after Tokyo, New York, Shanghai and Beijing no change from its position in the accountancy firm's 2015 report.

KPMG's head of the technology sector, Tudor Aw, said: "Despite the uncertainty presented by Brexit and other economic factors, the UK and London has not lost its shine when it comes to its technology pedigree."

But almost a third of Tech London Advocates respondents said that since the Brexit vote, employees have expressed concerns about visa rules and regulations. Another 15% had seen customer deals collapse around uncertainty over the UK's future.

While the government has declined to guarantee the rights of EU citizens currently living in the UK post-Brexit, a quarter of startups surveyed by Tech London Advocates said foreign workers comprise up to 25% of their workforce, and 22% of respondents increased the ratio of international workers to between a quarter and half of their staff.

The research comes a day after government quango Tech City UK published its Tech Nation 2017 report detailing the state of the UK's digital industries. With a mix of data from 2016 and 2015, the report found that London digital investment hit 2.2 billion last year, and that tech workers can expect an average salary of 51,000.

Tech City UK painted a bright picture of the state of UK tech, but admitted that its own survey found a desire within the technology sector to work with government to navigate Brexit's challenge of access to skills.

Shaw, of Tech London Advocates, said: "By working with government, we can help shape a Brexit that ensures London retains its position as the tech capital of Europe and an important epicentre for global tech with high levels of investment and a world-class skills base."

Digital salaries in the UK are nearly 50% higher than the national average, while tech sector investment is more than double that of European rivals, according to government startup quango Tech City UK's latest annual research.

Tech workers can expect to earn 51,000, 44% higher than the national average, according to Tech City UK's Tech Nation 2017 report, while investment from venture capitalists (VCs), government and other sources amounted to 6.8 billion in 2016, much higher than France, the nearest rival with 2.4 billion.

Jobs in the tech sector numbered 1.64 million in 2015, according to the quango's research, which in part relied on Business Structure Database figures from 2015, meaning some of the data, including some jobs figures, does not account for the impact of the Brexit vote.

However, that data charted a 22% rise in digital sectors' turnover between 2011 and 2015 to hit 170 billion, with its contribution to the economy growing by a third over the same period to reach 97 billion.

"Tech Nation 2017 gives the clearest indication yet that the UK possesses unrivalled digital tech specialisms. The digital economy is growing twice as fast as the wider economy, with an economic output of close to 100 billion per year," said Eileen Burbidge, Tech City UK chair, and Gerard Grech, Tech City UK CEO, in a foreword to the report.

Citing statistics from PitchBook, a database tracking VC, private equity, and M&A activity, Tech City UK also found that the UK tech sector received 6.8 billion in funding over 2016, a period in which Britain voted to leave the EU.

While 2.2 billion of that money was invested in London firms, 4.6 billion boosted firms elsewhere in the UK.

London's annual digital turnover was more than four times as high as the next most productive though, hitting 56 billion compared to Reading's 12.5 billion. However, other regions experienced high year-on-year growth in turnover, with Dundee recording 171% growth, Sunderland 101% growth, and Bristol and Bath 87% growth.

"What really excites me most is the incredible growth tech is delivering across the whole of the UK," said Julian David, CEO of tech industry trade body techUK.

"In 2016, 68% of digital tech investment was outside London, showing tech is leading the kind of balanced economic growth the country is in need of. The government's Industrial Strategy wants to promote growth across the UK and support local clusters it's clear that tech is leading the way so an Industrial Strategy for tech is an industrial strategy for the whole economy."

Tech City UK's report also mentioned Brexit without focusing on it admitting that its 2,700 survey respondents, who also informed the data, "were unequivocal" about the need to keep strong access to EU skills talent and outside investment as the UK leaves the union.

Intel Security's EMEA CTO, Raj Samani, said that while he welcomed the growth in digital skills, the UK must improve its ability to grow its own talent, with a Global Information Security Workforce Study conducted last year pointing to a 1.5 million-strong cybersecurity skills gap worldwide by 2020.

"The truth is that traditional education is not preparing individuals for cybersecurity jobs," he said. "In addition to redirecting the curriculum to focus further on cybersecurity, we need to look beyond higher education to train people for the profession in order to keep up with the growth rate of digital jobs."

The report added that respondents had stressed the need for a way forward balancing the UK's exit priorities with the tech industry's reliance on foreign talent. It read: "As the UK begins the process of leaving the European Union, the tech sector has highlighted the importance of being able to recruit highly skilled staff from the EU and around the world.

"Businesses have made several suggestions for action in this area and the government and the tech sector should work closely together to find the right approach for both non-EU and EU immigration. Tech City UK continues to work closely with the Home Office in order to help ensure that the UK continues to attract tech talent from all over the world."

Prime Minister Theresa May has ruled out the possibility that the UK will retain single market membership, and Brexit ministers are allegedly trying to push a view that leaving the EU with no trade agreement, a situation in which the UK would fall back on World Trade Organisation rules, would be workable, according to the Guardian.

TechUK's David said: "With Article 50 being triggered next week, the report shouts loud and clear that tech should be a priority in the Brexit negotiations. TechUK has been working productively with government so that they know what is needed for our digital economy to continue its meteoric rise.

"We'll need continued access to international talent, a watertight agreement on UK-EU data flows and continued support for research and innovation in the UK."

IT contractors' daily rates are growing even as Britain heads towards a hard Brexit, according to new research.

One in five contractors' rates are increasing, according to accountancy firm Nixon Williams' survey of 600 contractors that compared the first half of 2016 to the second half, after 23 June's vote to leave the EU.

Nixon Williams found that more rates are increasing than decreasing, with 20.5% seeing their rates rise compared to 16.6% whose rates fell post-June.

The 20.5% whose rates increased after the Brexit vote beats the 19.4% whose rates grew before it. The percentage of respondents whose rates fell after Brexit - 16.6% - was lower than before the referendum too, when it stood at 18.6%.

Derek Kelly, CEO of Nixon Williams, said: "The fear was that the EU referendum result would send the jobs market into a tailspin, and that contractors would be first to feel the pain. Even though IT is often regarded as a discretionary spend, technology is key to increasing worker productivity. In that respect, IT contractors are likely to find that demand for their skills holds up well this year."

The survey also found that just 30% of IT contractors were downbeat about the UK's prospects outside of the EU, with the vast majority optimistic or neutral about it.

Contractors seem to be faring better than full-time staff, with the UK's average engineering salary falling from 55,709 to 45,964 last October, according to figures from Balderton Capital.

"Employers are likely to be reticent to commit to permanent hires, and any business transformation projects related to Brexit will be of limited duration and require highly specialised skills, making them ideal for contractors," said Kelly.

The figures also come as public sector bodies prepare to crack down on those who will be affected by the HMRC's IR35 legislation, which seeks to tax contractors as full-time staff.

Public bodies will be responsible for enforcing IR35 among their contractors from next month, and it will target contractors who pay themselves through dividends via their own companies, thereby avoiding National Insurance payments. IR35 will tax them as regular employees, meaning they could lose up to 25% of their earnings.

But those with in-demand skills, like cybersecurity, can charge more to make up for the shortfall in earnings. Kelly added: "Skills shortages in this key area are predicted to worsen this year, which means that cybersecurity professionals are likely to see more frequent multiple contract offers and bidding wars for their skills."

GV, the venture capital arm of technology giant and Google parent Alphabet, has invested 20 million into a UK technology startup, providing a means for businesses to offer cross-border payment services to their customers.

Currencycloud, a UK based payments service that has just set up shop in the US, has already received investment from firms including Notion Capital, Sapphire Ventures and Japanese technology company Rakuten.

This is certainly good news for the UK technology startup scene, as overall investment recently fell to its lowest point in five years, blamed largely on the turbulence created as a result of the Brexit vote last year.

According to a report by Beauhurst, UK startups received 3.6 billion in investments in 2016, down 12% on 2015 figures, with the total number of annual deals also falling by 18%.

Google's stake brings total investment in Currencycloud to 44 million, which will be used to support its global expansion, which already counts Klarna, Travelex, Standard Bank and Azimo among its customers. The company revealed $25 billion in payments had so far been sent through its infrastructure in over 200 countries.

CEO Mike Laven said: "Currencycloud provides a set of multi-currency payment and conversion tools that are helping hundreds of companies globalise fast. We are seeing massive and increasing demand for these services, with volumes growing over 150% last year."

Initially launched in 2012, Currencycloud provides a platform for business wanting to offer international payment services without the need for complex and expensive infrastructure. It also provides a means for companies to build apps and services using its currency APIs.

"We believe in empowering developers by making it easier for them to add scalable services to their products, ideally with simply APIs," said GV general partner Tom Hulme. "Currencycloud is the leader in providing cross-border payment services in this manner, a real need as companies globalise."

Despite acknowledging a dip in sales as a result of the vote to leave the European Union, Laven remained optimistic that business would continue to thrive, and is preparing to seek a licence to operate within the EU if it becomes necessary after Brexit negotiations.

Digital and technology businesses in the North are taking on a record number of apprentices and graduates in an attempt to plug the growing skills gap, according to a new skills audit.

The audit from trade body Manchester Digital found that over half of surveyed businesses had taken on new apprentices in the past year, 80% of whom met employee expectations.

Local universities supply talent to half of all technology businesses in the north-west, while 25% are actively running their own graduate schemes.

"It is great to see so many businesses in the region investing in their talent pipeline and taking on more apprentices than before," said Katie Gallagher, managing director at Manchester Digital.

"In time for National Apprenticeship Week, our audit has shown apprenticeships provide value for the vast majority of employers and we are seeing more parents and potential candidates viewing tech apprenticeships as a high quality alternative to university."

When asked about the impending introduction of an apprenticeship levy on UK employers, which is designed to help fund new apprenticeship schemes, over 80% of companies believed it would provide a boon to business.

Content production, consultancy, design agencies, cloud and ISP providers, and digital agencies make up the majority of the businesses targeting a new generation of talent, 83% of which have reported growth in the past 12 months.

But it's not all good news, as the number of vacancies still outpaces the availability of new talent. Development and client facing skills have become the most sought-after qualifications for new starters, yet these two areas are proving the most difficult to fill.

This is a particular issue for developer skills, as the work often requires specific knowledge or insight of specialist code or platforms. In terms of languages, over 40% of respondents highlighted Javascript and PHP as the most difficult roles to find developers for, followed by Python at 28% and Magneto at 24%.

Britain leaving the EU also remains a concern, as despite expectations that businesses would increase the amount of talent being sourced from outside Europe following the Brexit vote, the majority have yet to do so. In fact the number of businesses securing international talent outside of the region has dropped to 18% since 2016.

The growing talent deficit has meant 20% of businesses in the region have been forced to turn away work as a result.

"With as many as a fifth of the regions digital businesses turning down work due to a talent shortage, and with no immediate solution in sight, it is imperative that employers look further down the talent supply chain and structure their recruitment strategies to allow for apprenticeships," said Gallagher.

The UK's data protection authority is launching an inquiry into whether voter's personal data is being misused in political campaigns.

The Information Commissioner's Office (ICO) has also approached Cambridge Analytica, a company which uses big data to "model target audience groups and predict the behaviour of like-minded people".

The company gathers personal data from various sources and builds profiles of individual and their political inclinations. The Observer last week claimed that the firm played key roles in both the US election and Britain's vote to leave the EU.

An ICO spokesperson said: "We have concerns about Cambridge Analytica's reported use of personal data and we are in contact with the organisation."

They added: "We are also conducting a wider assessment of the data protection risks arising from the use of data analytics, including for political purposes, and will be contacting a range of organisations. We intend to publicise our findings later this year."

A spokesman for Cambridge Analytica sent IT Pro a statement saying that it is in touch with the ICO and "happy to demonstrate to the ICO that we are compliant with the UK and EU data law."

He added: "Cambridge Analytica did not do any work (paid or unpaid) for the Leave.EU campaign. In 2015 the company was in discussions to potentially work with them. That work did not go ahead."

The Observer also claimed that US billionaire Robert Mercer, who gave funding to President Donald Trump's election campaign and who is a long time friend of Nigel Farage, part-owns Cambridge Analytica, and encouraged its use it to provide advice for the Leave campaign on how to target swing voters via Facebook.

Cambridge Analytica has denied it has played any role during the referendum campaign, which it would have had to declare to the Electoral Commission.

On the website Campaign, Cambridge Analytica explained how it had helped Ted Cruz win the Iowa Caucus in February 2016.

"CA was able to provide the campaign with predictive analytics based on more than 5,000 data points on every voter in the United States," it said. "From there, CA's team of political consultants and psychologists guided the campaign on what to say and how to say it to specific groups of voters."

In Europe, companies are not allowed to use third party data without seeking consent, whereas in the US this is the norm.