• UK-registered cyber firms raised more than £1 billion external investment in 84 deals

• More than 6,000 new jobs added to the UK’s 50,000-strong cyber workforce

Britain’s tech sector continues to break records as new government data shows more than 1,800 cyber security firms generated a total of £10.1 billion in revenue in the most recent financial year, a 14 per cent increase from the previous financial year.

The DCMS Annual Cyber Sector Report, which tracks the growth and performance of the UK’s cyber security industry, reveals the sector contributed around £5.3 billion to the UK economy in 2021, rising by a third on the previous year from £4 billion – the largest increase since the report began in 2018.

Employment across the industry rose by 13 per cent, with more than 6,000 new jobs created, opening up new opportunities for people up and down the UK to join the sector and share its wealth. This brings the total number of people working in cyber in the UK to 52,700.

There were 1,838 active cyber security firms in the UK in 2021. More than half are based outside of London and the South East, with cyber security showing growth in the North East and East Midlands. The report highlights this move could be a result of remote working increasing regional opportunities.

UK-registered cyber security firms attracted record levels of external investment, with more than £1 billion secured across 84 deals by companies including Bristol-based Immersive Labs, which raised £53.5 million, and London-headquartered Tessian which secured more than £52 million in funding.

Digital Secretary Nadine Dorries said:

Cyber security firms are major contributors to the UK’s incredible tech success story.

Hundreds of British firms from Edinburgh to Bristol are developing and selling cutting-edge cyber tools around the world that make it safer for people to live and work online.

We are investing in skills training and business initiatives to help the UK go from strength to strength as a global cyber power and open up the sector to people from all walks of life.

Over the last decade, the UK has established itself as a leader in areas including network security, threat monitoring and professional services which has contributed to the sector’s double digit growth last year.

Almost 300 UK-headquartered cyber security firms have offices in international markets, with 56 per cent offering their products and services in the United States and 46 per cent exporting to the European Union.

The UK attracted a number of foreign companies, with US-headquartered companies representing one in ten UK-based cyber companies, highlighting the importance of US-UK collaboration in this area to support the UK’s economic growth.

The findings come as Digital Minister Julia Lopez addresses the CyberASAP demo day today. The event gives UK academics the opportunity to showcase innovative new cyber security products to potential buyers.

Vicky Brock CEO and co-founder of Vistalworks said:

Vistalworks was originally founded in response to a Scottish government innovation challenge to find innovative technology solutions to online illicit trade.

As we’ve grown, working closely with our government agency and cyber security stakeholders has remained incredibly important.

The Cyber Runway Scale programme has enabled us to reach new public and private sector contacts, including contracts with banks and enforcement, and has helped us develop the skills and awareness we need to take our intelligence solutions to new markets and partners across the rest of the UK and beyond.

Lorna Armitage, co-founder, CAPSLOCK said:

The support of Plexal and government-funded programmes like Cyber Runway has enabled CAPSLOCK to accelerate our growth from a young startup in 2020 to the ‘most innovative cyber security SME of 2021’, as named by DCMS.

Our relationship with Plexal has given us a great platform to talk about our commitment to promoting equality and diversity in the cyber security industry. For example, we spoke to fellow Cyber Runway members about the challenges faced by female co-founders and women in cyber.

The government’s National Cyber Strategy is supporting UK firms to grow and scale up through a number of schemes including the National Cyber Security Centre Startups and CyberFirst bursary schemes, the London Office for Rapid Cyber security Advancement, and the Cyber Runway programme which helps entrepreneurs and businesses access a range of services to turn their ideas into commercial successes.

The Department for Digital, Culture, Media and Sport has launched a number of skills initiatives including the Cyber Explorers youth programme and skills bootcamps. It is boosting careers in the cyber workforce by supporting new apprenticeship standards and helping to standardise the professional cyber security landscape with the new UK Cyber Security Council.

ENDS

Notes to editors

Ipsos MORI, Perspective Economics and the Centre for Secure Information Technologies (CSIT) at Queen’s University Belfast were jointly commissioned by DCMS to analyse the UK’s cyber security sector. The full 2022 report is here.

This latest analysis builds upon the baseline UK Cyber Security Sectoral Analysis which used data from 2020 and was published in February 2021. The Cyber Security Sectoral Analysis 2021 report can be found here.

For this year’s study, the methodology was refined to improve the identification of businesses offering cyber security products and services in the UK. The cyber security sector is fast-moving and always subject to changes in products, services and market approaches.

Thousands of low-income households across England will see their energy bills reduced by up to £200 a year as the government announces £67 million to upgrade insulation in homes and install low-cost clean heating.

The funding announced today (Monday, 21 February) forms part of the government’s Home Upgrade Grant (HUG) scheme and will be allocated to local authorities across England to improve up to 4,300 low-income, off-gas grid households – which are reliant on alternatives such as bottled gas and oil to heat their homes.

Grants will pay for energy efficiency measures such as wall and roof insulation as well as new low-carbon heating systems, thermostats and room heating controls, expected to be delivered before the end of March 2023.

The money will help people who are most vulnerable to fuel poverty, who are on low incomes and living in off gas grid privately-owned homes – both rented and owner-occupied – with upgrades helping to reduce their bills and make their homes warmer.

It is the first round of funding from a total of £950 million that was allocated to the HUG scheme by the government last year and will be available over the next 3 years to 2025.

Around 1,300 jobs in the green energy sector will be supported as a result of this latest funding.

Business and Energy Minister Lord Callanan said:

This funding will make a real difference to thousands of low-income households – saving them up to £200 a year on their energy bills through upgrades like better insulation.

This is just the first round of the £950 million funding we have committed over the next 3 years and will ensure we help those most in need. It will keep more money in people’s pockets, at the same time as making homes warmer, more comfortable and greener.

The £67 million of HUG funding will go to 22 local authorities across England and builds on the Sustainable Warmth Competition in December, which saw £152 million allocated to more than 250 other local authorities to drive improvements in the energy efficiency of homes. Energy efficiency upgrades from funding announced today will be delivered before the end of March 2023.

It will further contribute to government commitments to tackle fuel poverty by ensuring that as many fuel poor households as possible achieve a minimum Energy Performance Certificate (EPC) rating of Band C by 2030. Since 2010 the number of low-income households living in the least energy efficient homes has fallen by 1.3 million.

The funding is part of the £6.6 billion the government is investing this parliament to decarbonise buildings, of which over £2 billion is aimed specifically at lower-income households. This will play a significant role in helping the UK to reach its world-leading climate change ambitions and, with upgraded insulation making it easier to keep homes warm, it will save people money on their energy bills.

It also follows the government’s recent announcement of a £9.1 billion package of support to help households with rising energy bills. This includes a £150 non-repayable rebate in Council Tax bills for all households in Bands A-D in England and £144 million of discretionary funding for local authorities to support households who need support but are not eligible for the Council Tax rebate.

There will also be a £200 discount on household energy bills this Autumn for domestic electricity customers in Great Britain, which will be paid back automatically over the next 5 years – spreading the cost of the increase in the energy price cap, given the financial pressures households across the country are facing.

These new measures are on top of the existing £21 billion support the government is providing for the cost of living this financial year and next. This includes reducing the Universal Credit taper rate, raising the National Living Wage, freezing alcohol and fuel duties and providing targeted help with energy bills.

In the Heat and Buildings Strategy and Net Zero Strategy, it was announced that £950 million had been committed for the Home Upgrade Grant as part of the 2021 Spending Review process across the next 3 years.

The Home Upgrade Grant provides energy efficiency upgrades and low-carbon heating to low-income households living off the gas grid in England to tackle fuel poverty and meet net zero.

The worst performing low-income, off gas grid homes, ranging from Energy Performance Certificate (EPC) Bands D to G, are eligible to receive upgrades under HUG.

Regional spread of latest HUG funding:

• Greater London £9,573,062
• North-West £8,699,940
• Yorkshire £1,179,679
• East £7,314,161
• North-East £3,587,843
• East Midlands £1,439,532
• West Midlands £3,760,894
• South-East £18,836,741
• South-West £12,698,436

Lead local authorities receiving funding:

• Blackpool Council £8,699,940
• Bristol Council £3,640,592
• Ealing London Borough £8,375,983
• Oxfordshire County Council £2,199,587
• Portsmouth City Council £16,234,654
• Sedgemoor Council £1,699,700
• Tees Valley Combined Authority £2,976,848
• Three Rivers District Council £603,190
• West of England Combined Authority £5,031,652
• York Council £497,863
• Castlepoint £2,483,400
• Central Bedfordshire £1,650,950
• Great Yarmouth £2,576,621
• Hartlepool £610,995
• Leicester City £598,732
• Plymouth Council £2,254,202
• Redbridge London Borough £1,215,330
• Sevenoaks Council £402,500
• Sheffield City Council £681,816
• South Derbyshire £840,800
• Walsall Metropolitan Borough Council £1,251,900
• Warwick £2,508,994

Huge progress is already being made to increase the energy efficiency of UK homes. In 2010, just 14% had an Energy Performance of C or above, however it is now at 46% and rising, with the social housing sector up from 18% in 2008 to around 66%. Energy efficiency improvements are one of the most effective ways to save money on energy bills at a time of rising global gas prices.

Government has allocated a total of £1.1 billion to the Home Upgrade Grant, with delivery taking place from early 2022 to March 2025.

Local authorities that received HUG grants from the £152 million under the Sustainable Warmth Competition in December 2021.

Sustainable Warmth is a funding opportunity that launched in the summer of 2021 to bring together 2 fuel poverty schemes, with delivery taking place from early 2022 to March 2023:

1. Local Authority Delivery scheme Phase 3: £278 million for low-income households heated by mains gas through a third phase of Local Authority Delivery (LAD) funding.
2. Home Upgrade Grant Phase 1: £152 million available to support for low-income households off-gas through the Home Upgrade Grant (HUG).

A consultation has been launched with telecoms firms on proposed legal instruments to control the use of Huawei in UK networks.

UK telecoms providers have already begun to remove Huawei from the UK’s 5G networks following the government’s announcement in July 2020. As the next step in this process, the government is now required by the new Telecommunications (Security) Act to consult with industry on the proposed measures which would bring these controls on Huawei onto a legal footing.

In November the Act became law – giving the government the legal mechanism to restrict the use of high risk vendor equipment in public networks where deemed necessary and proportionate in the interests of national security. The new powers will ensure UK mobile networks remain safe and secure as 5G becomes progressively more embedded in our national infrastructure, industries and daily lives.

The legal instruments the government is consulting on are known as a ‘designated vendor direction’, which contains requirements that public telecoms providers would need to follow regarding use of Huawei equipment and services; and a ‘designation notice’ which categorises Huawei as a high-risk vendor.

The consultation will last for four weeks and is only open to public communications providers which would receive the direction, and Huawei, as the proposed designated vendor.

The direction, subject to the consultation, legally requires telecoms operators to:

• Remove all Huawei equipment from 5G networks by the end of 2027.
• Not install Huawei equipment in 5G networks, effective immediately upon the issuing of the final direction.
• Remove all Huawei equipment from the core of telecoms networks by 28 January 2023.
• Not install sanctions-affected Huawei equipment in full fibre networks, effective immediately upon the issuing of the direction. This includes any equipment for which the supply chain or manufacturing process has been altered due to the impact of US sanctions.
• Reduce the share of Huawei equipment to 35 per cent of the full fibre and 5G access (i.e. non-core) networks by 31 July 2023, six months later than previously announced due to the difficulties providers have faced during the pandemic.
• Remove Huawei high data rate intra-core and inter-operator transmission equipment – hardware which sends data across a network without processing it – from all networks by 31 December 2025.

Digital Secretary Nadine Dorries said:

The government is committed to ensuring the security and resilience of our phone and internet networks. Last year we brought in new laws to protect UK infrastructure from high-risk vendors and issue tough sanctions on providers which fall short of our high security standards. This consultation marks the next step in removing the risks posed by Huawei.

In July 2020 the government announced it would hold a technical consultation with full fibre operators regarding their use of Huawei equipment.

Following the conclusion of that technical consultation, the government worked with the National Cyber Security Centre to analyse responses. As a result, the proposed direction includes a ban on the installation of sanctions-affected equipment in full fibre networks, effective from the issuing of the designated vendor direction for Huawei.

The government considers that preventing any future installation of this equipment addresses the national security risk posed by Huawei in full fibre networks, but it will consider views from consultees before reaching a final decision.

This is not expected to impact the roll out of faster broadband. The telecoms industry remains committed to the government’s target of bringing gigabit broadband to at least 85 per cent of the UK by 2025.

The NCSC has been consulted throughout the drafting of the consultation documents and the government has given due consideration to the NCSC’s advice.

ENDS

Notes to editors

• The targeted consultations are being conducted in accordance with sections 105Z3 and 105Z9 of the Communications Act 2003, as amended by the Telecommunications (Security) Act 2021, for the Secretary of State to consult public communications providers which would be subject to a proposed designated vendor direction, relating to the use of Huawei equipment and services in the UK’s public telecoms networks, and Huawei as the proposed designated vendor.
• Responses to these consultations will be taken into account in decisions by the Secretary of State regarding any designated vendor direction or designation notice relating to Huawei. The government must work with providers and vendors to ensure that public networks are as secure as they can possibly be.