How will businesses be impacted by the government's strategy for promoting better use of data to improve its own work and to boost the wider digital ecosystem?
On 18 May 2021, the UK's Department for Digital, Culture, Media and Sport (DCMS) published its response to the recent consultation on its National Data Strategy (announced in September 2020, as we reported).
The strategy sets out the UK government's plans for promoting and facilitating the use of data, built on the recognition that data is an asset that "used responsibly, can deliver economic and public benefits across the UK". The government's ambition is to "harness the power of data to drive growth and innovation, fuel new jobs and businesses, support scientific research, revolutionise the public sector and create a fairer society for all".
We have reviewed the government's response to the consultation with a view to highlighting how implementation of the strategy and delivery of the five missions could affect private sector businesses.
Respondents emphasised that the strategy should benefit "everyone, everywhere". Fairness in data is one aspect; fairness from data is another, using data analytics to promote inclusion, tackle social inequalities, and promote post-pandemic "levelling up". The importance of a high level of public support for the use of data was also emphasised. The government plans an ongoing, transparent dialogue with the public and stakeholders as the implementation of this strategy proceeds, and announced the creation of a new body to support that objective, the National Data Strategy Forum.
In relation to using data to "build back better" after the pandemic, the response reiterates plans to invest in connectivity across the whole UK, as well as current and planned initiatives to boost data literacy in the workforce and in university curricula.
Data can also support the drive to "build back greener". The government plans to use the international platform of this autumn's COP26 conference to highlight the role of digital and data technology in contributing to decarbonisation.
Five missions feedback
The strategy is structured around five missions (discussed below), which sit across four pillars identified as the basis of effective data use: foundations, skills, availability and responsibility.
'Unlocking the value of data held across the economy'
There was consensus in the consultation feedback around the need for better data availability, but a divergence of views on the appropriate level of government intervention to achieve it.
The government's response highlights various "data foundations" initiatives to promote data compatibility and frameworks to facilitate effective, resilient and secure data sharing between businesses. It also mentions that the government is investigating how standards, financial incentives and new data-sharing approaches from data intermediaries could support greater availability of data across the economy, including "data stewardship". The Information Commissioner's Office (ICO)'s revised data sharing code has been laid before Parliament (part of its formal ratification process). A new data sharing information hub has been created by the ICO. These initiatives are intended to support fair, lawful and transparent data sharing between businesses, while protecting people's personal information.
However, it does not appear that the UK plans to create an overarching regulatory framework for the data ecosystem similar to the EU's recently announced draft Data Governance Act (discussed in this Insight).
The response document briefly confirms the government's previously announced plans for smart data legislation that will extend its power to require participation in smart data initiatives. Existing smart data examples include open banking (in which participation was mandated) and data sharing to support customers switching between utilities providers (which has grown organically).
The response confirms that a report from the newly formed Smart Data working group will be published "in the next few months". That report is expected to contain recommendations around smart data initiatives, including guidance for data portability initiatives and recommendations on standardisation, no doubt helping to shape the smart data legislation in due course.
'Securing a pro-growth and trusted data regime'
Respondents emphasised the need for effective data protection law that protects privacy and security and fosters public confidence, but which is also sufficiently flexible to remain fit for purpose in the face of rapid technological change.
The government's response highlights the scope to "capitalise on our independent status and repatriated powers" but also raises the need to "maintain interoperability" with other regimes for businesses which operate across borders. It welcomes the European Commission's draft data adequacy decision to ensure continued seamless data transfer between the UK and EU.
There are no signs in the document of any radical departure in the UK's data protection regime from the legacy GDPR framework.
'Transforming government's use of data to drive efficiency and improve public services'
Drawing on the consultation response, the government will prioritise developing standards and assurance to support data access in the public sector, and cross-government initiatives for data sharing and "joined up analysis".
The government's approach will continue to be informed by standards from other bodies, including the British Standards Institute, the ICO and the Centre for Digital Built Britain (which is leading the UK's groundbreaking National Digital Twin programme). Digital skills will be developed across the civil service, working towards a "culture of digital literacy".
'Ensuring the security and resilience of the infrastructure on which data relies'
The experience of the pandemic has highlighted the paramount importance of cybersecurity and the vital nature of many aspects of digital activity - from education to managing critical national infrastructure. The response highlights that data infrastructure is included as a sector for mandatory notification under the new investment control regime introduced by the National Security and Investment Act 2021.
The interrelation of data security with the Integrated Review of Security, Defence, Development and Foreign Policy to build resilience against risks to UK infrastructure is also mentioned. The protection of government data in transit and when stored externally are both highlighted as areas where the government will be taking more action.
More widely, the response refers to a security framework for managed service providers and digital supply chain security, being developed by DCMS with the National Cyber Security Centre for the general digital ecosystem. Finally, the response highlights that sustainability is being integrated into government-owned digital systems and services, as well as cloud services procurement.
'Championing the international flow of data'
"Ambitious data provisions" will be an aspect of the UK's future trade agreements, to ensure safe and secure international data flows for British businesses. An announcement is promised soon by DCMS on the countries which will be prioritised for post-Brexit data adequacy arrangements with the UK.
The response refers to work underway with the ICO to develop pragmatic data transfer mechanisms, including developing the UK's own standard contractual clauses (SCC) for international data transfer (the issue that generated the the CJEU's Schrems II decision in 2020 and subsequent reforms at EU level).
Work with the ICO also includes a new expedited process for the approval of "binding corporate rules" for data transfer under the UK GDPR, and guidance on the use of codes of conduct and certification schemes.
Osborne Clarke comment
Although much of the emphasis of the National Data Strategy is on public sector activities, it will also shape the data ecosystem in the UK. The work of bodies such as the Centre of Data Ethics and Innovation, the Office for Artificial Intelligence, and the ICO, sits within this wider context and can have a direct impact on the private sector. Greater availability of public sector data for private businesses is clearly to be welcomed. Smart data initiatives could have a very material disruptive impact, with both obligations placed on market incumbents and opportunities created for new entry and innovation.
We have previously highlighted the importance of the need for public engagement and consultation in relation to digital innovation in these often fast-moving areas. This is particularly the case where regulation is being shaped around new ideas and technological capabilities where ethical or societal norms are still emerging and not yet settled.
Indeed as the new bodies, strategies and guidance outlined in the National Data Strategy are advanced, there will undoubtedly be further opportunities to feed into the detail of many of those aspects.
Originally published 28 May 2021
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