UK Government Faces Scrutiny Over £1.7 Billion Cloud Dependency Following AWS Outage

Substantial Government Cloud Investment

The UK government has committed approximately £1.7 billion to Amazon Web Services through 189 contracts since 2016, according to analysis compiled by public procurement intelligence firm Tussell. Sources indicate that AWS has invoiced around £1.4 billion during this period, revealing significant financial exposure to the cloud provider.

Substantial Government Cloud Investment
Regulatory Warnings and Oversight Gaps
Global Outage Impacts
Labor Concerns and Contract Awards
Strategic Implications

Reports show that 35 public sector authorities currently utilize AWS services across 41 active contracts valued at a combined £1.1 billion. Key ministerial departments with agreements include the Home Office, Department for Work and Pensions, HM Revenue & Customs, Ministry of Justice, Cabinet Office, and Department for Environment, Food & Rural Affairs.

Regulatory Warnings and Oversight Gaps

Analysts suggest this dependency creates tension with regulatory guidance. Tim Wright, technology partner at law firm Fladgate, stated: “That’s a very significant exposure and it’s pretty ironic considering how the FCA and PRA have repeatedly highlighted the dangers of concentration risk in cloud service provision for regulated entities for a number of years.”

The House of Commons’ treasury committee has reportedly written to Economic Secretary Lucy Rigby questioning why Amazon hasn’t been designated a “critical third party” to UK financial services, which would subject the company to financial regulatory oversight. This comes despite Amazon’s claims to the committee that financial services customers use AWS to support their “resilience” with “multiple layers of protection.”

Global Outage Impacts

This week’s AWS outage affected more than 2,000 companies worldwide, according to monitoring service Downdetector, which recorded 8.1 million problem reports including 1 million in the UK. Among government services, HMRC confirmed customers experienced problems accessing online services, with phone lines overwhelmed by increased demand.

Amazon reportedly restored most services within hours, announcing by Monday evening that all cloud operations had “returned to normal.” However, some organizations experienced persistent problems throughout the day, highlighting the widespread impact of the disruption., according to recent developments

Labor Concerns and Contract Awards

Unions have raised additional concerns about the government’s relationship with Amazon. GMB union national secretary Andy Prendergast stated: “Amazon has a truly terrible track record on treating workers fairly. In this context, for it to trouser almost £2bn of public money is a disgrace.”, according to industry reports

The criticism references working conditions in Amazon warehouses, including mass ambulance callouts and worker complaints about treatment and compensation. A spokesperson for Amazon’s fulfilment centers reportedly responded that the “vast majority” of ambulance callouts were not “work related.”

Strategic Implications

Analysts suggest recent moves by HM Treasury, PRA and FCA to establish direct oversight of ‘critical third parties’ aim to address precisely this type of outage risk. However, experts indicate that until significant diversification or sovereign cloud adoption occurs, the UK government’s cloud strategy appears to contradict resilience principles advocated by its own regulators.

The situation highlights the complex balance between leveraging cloud efficiency and maintaining operational resilience, with the recent outage serving as a stark reminder of the concentration risks inherent in modern digital infrastructure dependencies.