In December 2020, UKCloud’s virtual “Powered by Partnerships” event welcomed Nicky Stewart, Commercial Director at UKCloud, for a Q&A session on the UK government’s Social Value Model, UK data as a national asset and the threat posed to data sovereignty by overseas hyperscalers.
The full 40 minute interview can be watched on-demand here and a condensed transcript is detailed below.
Question 1: The UK’s national digital strategy announcement in September 2020 recognised the importance of data as a national asset, placing the onus on UK public sector to harness that potential. How do you see this playing out?
The UK public sector holds enormous quantities of data and it was recently estimated that the value of health patient data alone is in the region of £10 billion. The UK government has been publishing open data sets for years but much of that data is of poor quality with inconsistencies or duplications and has been as much as 10 years out of date.
The national data strategy was put out for consultation in September 2020 and has five key missions:
- To unlock the value of data across the economy
- To secure a pro-growth and trusted data regime
- To transform government’s use of data to drive efficiency and improve public services
- To ensure the security and resilience of the infrastructure on which data is kept
- To champion the international flow of data
Those missions are underpinned by four pillars:
- Data foundations
- Data availability
- Data responsibility
The overarching message is about being responsible with data and generating trust. The strategy is underpinned by a plethora of actions; about 38 in total but they do not necessarily match the ambition of the missions. There is nothing there about understanding the value of data which is going to be key in going forward. There have been some issues recently where the public sector has not been monetising data properly and, just to put that back in context, there is a £10 billion estimate for health data alone. The NHS recently gave Amazon free access to NHS data and whilst it wasn’t patient data it was still data and that has a value.
We have a great high-level national data strategy with a huge amount of uncertainty which means that government is going to have to be agile and ready to deliver against multiple plans, depending on how things pan out next year. Data has been the domain of the elite for decades, in the sense that there are very few people who understand it / have the skills to interpret it or who can store it. There are huge global companies who are streets ahead of everybody else when it comes to understanding the power of data, so government really needs to use the national data strategy to take the helm and make sure that the UK citizens and the UK economy gets the real benefit from this, ensuring it isn’t lost offshore.
Question 2: Do you believe that the UK’s data is currently out of our own hands and if so, do you think that this poses a significant threat in the post-Brexit era?
A lot of the UK’s data is not in the UK’s hands. It is estimated last year that 92% of the western world’s data is in the US. It is also estimated that the top three global cloud providers (known as hyperscalers) have more than 50 percent of the global market, meaning there is a vast amount of data spread amongst a very few entities.
Nobody should underestimate the importance of data. An example of how critical data is shown by looking at the impact of Brexit. In a no deal situation there is going to be the potential loss of law enforcement access to law enforcement data. What law enforcers in the UK have been able to do in real time currently could take up to four months. Data is crucial and we should not underestimate the complexity of it. Knowledge is power and in the 21st century data is knowledge.
Data sovereignty recognises that existing cloud offerings are dominated by non-EU providers. They hold significant market power and large amounts of capital and, at the same time, Europe is seeing growing international tensions and trade conflicts right across the globe. Europe is looking to maintain permanent data sovereignty over EU data. It is looking at data availability so it needs trustworthy, secure, transparent data infrastructure, that can be used to exchange and process data. It will develop a digital ecosystem that allows for the development of benefits of products, helping European companies and business models scale up and be globally competitive. If the UK does nothing, it is in danger of falling behind Europe and the rest of the world.
The EU have launched a project known as GAIA-X which aims to build data infrastructure for Europe. It is a huge project with 300 companies already on board, including BMW, Bosch, Orange and Amadeus.
Question 3: You’ll be aware that recently the UK government announced measures outlining an emphasis on public procurement to deliver social value. The idea behind this is to encourage healthier competition to deliver better outcomes for society whilst also levelling the playing field for smaller UK businesses. What priorities do you think UK businesses have to adopt to meet the Social Value Model?
Social values have been around with us since the beginning of 2013, in the form of the Social Value Act 2012. This act built on the sustainable procurement model, which was used during the 2012 Olympics, leaving some lasting legacies which benefitted the people of London. The Social Value Act is looking at every pound that government spends and examining the wider societal and economic benefits. Social value will be mandated for all central government procurements with effect from the 5th of January 2021. It will feature a minimum of 10% of the evaluation criteria so companies that are wanting to do business with government, including digital companies, are going to need to get their heads around this and wrap their arms around it quickly.
On the back of the digital announcement in September, a procurement policy note was issued by the Cabinet Office which sets out the key themes of social value and what the policy outcomes are. The main key theme is of course centred around the recovery from Covid-19 and, what is it that the supplier is doing to enable the UK or a local community to recover economically or in terms of well-being?
The next theme is tackling economic inequality. In other words, it is the levelling up agenda so you’re looking at localism as well as the broader economy. The third one is important, particularly for technology businesses and it evolves around fighting climate change and providing equal opportunities for all. It will be down to buyers to determine which aspects of the themes are important to them.
The Cabinet Office came out to tender a few weeks ago with a new mega cloud compute framework which is for hyperscale public cloud. It is asking bidders to talk very specifically about how they are going to bring social value to that contract and even more specifically, how they are prioritising climate change, which obviously you would expect for cloud providers because there’s been quite a lot of controversy recently about the amount of carbon generated by datacentres.
It is important that the supply community gets their head around this very quickly. We hope that the buyers are getting their heads around this very quickly and we’re going to be sensible about it as well but it’s all relatively new to large swathes of the community. I think it might be a little bit bumpy for the first few months until it settles down and becomes business as usual.
Finally, government has long said that procurement is one of the most important economic interventions that it can make and that has been great to hear. They are now putting their money where their mouth is.