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The UK National Data Strategy: a new strategy for a new beginning?

On 9 September 2020 the Government published its new national data strategy for consultation. This follows EU policy reviews in the key areas of cloud computing and AI along with the publication of its own data strategy in February of this year, raising important questions about alignment with the bloc post-Brexit.

In the midst of what is being described as the “fourth industrial revolution”, many will be interested to know how  the UK’s strategy will fit with an increased national reliance on technology growing importance of data in Artificial Intelligence solutions, Brexit and the recent decision of the Court of Justice of the European Union in Schrems II. (Read our article on Schrems II here). In particular, if data really is “the driving force of the world’s modern economies”, then how can we ensure that we harness those opportunities while still protecting individual rights and freedoms? Indeed, with the data economy now accounting for 4% of our national GDP, can we really afford not to?

In this article we examine the Government’s proposals for the national data strategy, including reading between the lines on what it’s likely to mean for business.

Champions of international data flows?

One of the key aspects of the new strategy is the facilitation of international data flows, a topic which has assumed added significance in light of recent legal and political developments. With Brexit negotiations appearing to be at an impasse and the UK’s status as an adequate jurisdiction hanging in the balance, the ability to receive EEA originating data after the transition period without additional safeguards is in jeopardy.

At the same time, judicial abolition of the Privacy Shield framework by the CJEU in Schrems II is already causing complications in the transatlantic data corridor. Many UK based organisations are scrambling to implement additional safeguards to accommodate transfers of personal data to the US, but there’s even a question as to whether continued reliance on those established safeguards will be possible going forward.

Clearly, regulatory uncertainty is bad for business. The ability to move data across jurisdictional lines has become increasingly integral to business decisions, affecting not just relationships with external service providers and business partners but also intragroup data sharing. In a truly global world driven by technical solutions and in a nation now boasting the largest data market in Europe, the Government appear to have accepted that complacency here could be disastrous.

Consequently, the Government has made some initial indications of the framework it expects to rely on in order to ensure that key data flows remain uninterrupted. While we can presumably expect more detail to follow in the coming months, the Government appears to be eyeing the following solutions to data localization constraints:

  • The creation of new regimes, approaches and tools -In order to circumvent existing obstacles to freedom of movement, the Government has pointed to the use of new framework solutions. One example of this is the use of data trusts, a concept which found its feet during the ICO’s AI review. Another possibility and one which has been suggested before, is the establishment of UK approved Model Clauses which would function in the same way as Standard Contractual Clauses currently (although perhaps not indefinitely) endorsed by the European Commission.
  • Government-led data adequacy assessments – The Government had already agreed to adopt existing adequacy decisions of the European Commission, meaning no new formalities for transferring data to jurisdictions deemed to offer adequate protection. However, in order to make continued use of this method without relying on European decision-making, the Government will have the means to conduct its own data adequacy assessments. Having the ability to formalise such arrangements at the national level should, at least in principle, allow the UK to both strengthen and simplify ties with countries offering a similar level of data protection.
  • Trade negotiation bundling – Implicit in the new strategy is the suggestion that free movement of data may be intertwined with wider free-trade discussions. While some will be understandably wary of the time implications of this, the Government appears to be focussed on utilising discussions inspired by Brexit as a vehicle for obstacle-free movement. With EC adequacy decisions having already been awarded to New Zealand and Japan, the sights appear to be set on Australia and the US as other key data markets.

Wholly private sector developments?

Much of the new strategy is designed to encourage positive private sector development, along with hoped improvements to data-driven trade, innovation and the economy. However, data use within the public sector also appears set for change. In particular, one of the positive consequences of the pandemic has been a period of forced modernisation for public authorities and government institutions in the ways that they use data at their disposal.

Firstly, more advanced solutions driven by AI have found a valued role in the pandemic, helping to predict mutations in the virus’s structure, assess the viability of effective treatments and identify the best candidates for clinical trials. With such high stakes, we can expect to see increased use of such tools moving forwards on a more sector-agnostic basis.

Secondly, the importance of having access to accurate health data and the ability to usefully employ those data cannot be underestimated. Having seen the potential benefits of more efficient, targeted usage of health data, the Government is looking at the ways in which legal barriers apply to the pharmaceutical and life sciences industries with a view to lifting perceived and existing barriers.

As a result, the Government’s proposals identify the following means of improvement across the public sector:

  • Risk aversion and bureaucracy. Research suggests that, rather than formal barriers to data sharing, reluctance is driven by perceived risk and red tape. As a result, the Government will be seeking to encourage cultural changes within the sector with a view to addressing negative behavioural tendencies. Where there are legal barriers to data processing, then it’s likely that we will see greater use of national level derogations provided by the GDPR.
  • Data standardisation. Another barrier to effective data usage within the public sector is the variation in datasets, their accuracy and reliability. With the consequences of relying on inaccurate data now potentially far overreaching ordinary concerns of inefficiency, the Government has identified the interoperability of data sets as a key concern and will now be looking to drive standardisation across the sector.

To Brexit and beyond?

Whether you operate in the private or public sector, the new National Data Strategy is likely to bring changes in the way organisations process data and share it with others. While the strategy remains under consultation and may be subject to revision, the clear indication is that the UK will be looking to adapt the regulatory framework that has been in place since the implementation of GDPR. In particular, the free movement of data internationally appears to have become inextricably linked with the UK’s trading position and any arrangements that will be reached over the coming months. Meanwhile, the public sector can expect to see significant changes as part of a Government led process to replace legacy systems with future-proofed infrastructure and to “build on the permissive approach to data sharing”.

Alongside regulatory developments related to the processing of personal data, the increased value and application of non-personal data is also likely to be a key driver of change moving forwards. In a sector dominated by corporate behemoths, any governance regimes applying to technology providers and digital markets will have to be capable of carefully balancing sensitive issues, perhaps most notably related to derivative economic benefit, competition and data ethics. In addition and in light of the impact of Covid, the harnessing of data and technology-based tools in preventing societal harm and injustice also appears to be firmly set on the agenda.

For more information about the implications of the UK National Data Strategy on your organisation or for any advice on how you can stay ahead of the curve, then please don’t hesitate to contact one of our specialists who would be glad to assist you.