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Fallout from Ukraine – the local government response and the cyber threat


Dan Humphreys, Associate Director

In council offices across the country, councillors and officers with already overwhelming workloads are assessing how they can help with the fallout of the horrific war in Ukraine. As the world watches with revulsion at the actions of the Russian state and military, governments and NGOs are delivering aid and supporting the dispossessed people of Ukraine.

The impacts for local government are numerous. As with past wars such as in Syria, councils will step up to the plate to house refugees and support their communities to aid the local humanitarian response. This war will also put further strain on already stretched finances – both for council services and the communities that they serve. Energy, food and some commodity prices had already been on the rise but the sanctions and market reactions will drive them all higher still. Councils will see internal bills and wage pressures rise while residents and businesses will also be hit requiring further support. Fluctuations in the stock markets could also have adverse impacts on local government pension funds requiring some short to medium term topping up from Town Hall reserves and revenue budgets. It’s a perfect storm and coming off the back of two years of pandemic pressures it is not a rosy picture.

One other significant concern that is rising due to the Russian invasion of Ukraine is that of cyber-attacks. Modern warfare is and will continue to be conducted in part through such attacks and councils should ready themselves for further attempts to hit their digital and IT functions.

This is by no means a new problem. Data from Iese, the Public Sector Transformation social enterprise, tells us that there are already 158,000 cyber-attacks every hour and that 48% of companies have been hit by Ransomware. Of those companies 13% have paid ransoms averaging a cost of $840,000. 88% of UK companies have suffered breaches. 92% of malware is delivered by email.

This is by no means restricted to the private sector as the experience of the NHS, Redcar and Cleveland Council and Hackney Council show us. The ‘WannaCry’ attack on the NHS resulted in additional costs of nearly £100m, costs to each Trust of £906,000 and the cancellation of 19,000 appointments.

For the attacks on the two local authorities in 2020 it is estimated that it cost each council £10m. As well as the financial impact on council budgets there is also an impact on the residents who the councils serve. Service disruption wouldn’t necessarily impact on services such as bin collections or street sweeping but the progress of applications for housing, financial or social care support can be. There is also the potential for sensitive data to be stolen requiring large ransom payments or running the risk of the data being sold on the dark web.

Councils across the country have done fantastically well in adopting more and more ways of embracing the digital revolution in the past decade. This has improved service efficiency and effectiveness while helping to soften the blow of budget cuts. It’s vital that this innovative mindset is allowed to flourish even further but the threat of cyber-attacks is growing and needs to be taken seriously.

To find out more about how Cratus supports local authorities via its Advisory service please follow this link.

Fallout from Ukraine - the local government response and the cyber threat