Amazon chief executive Andy Jassy beamed as he met Keir Starmer in Downing Street’s garden to announce £40bn of UK investments in June. Starmer was equally effusive, gushing: “This deal shows that our plan for change is working –bringing in investment, driving growth, and putting more money in people’s pockets.”
Four months later, and the tech company was left scrambling to fix a devastating global outage on Monday which left thousands of businesses in limbo – and shed light on the UK government’s reliance on its cloud computing business: Amazon Web Services (AWS).
Figures compiled for the Guardian hint at the British state’s increasing reliance on the services of the giant US internet group, which has also drawn criticism from unions and politicians about working conditions within its logistics and internet retailing business.
AWS has won 189 UK government contracts worth £1.7bn since 2016 – during which time it has invoiced about £1.4bn, according to the figures compiled by Tussell, a public procurement intelligence firm.
The research group added that “35 public sector authorities currently use [AWS] services across 41 contracts worth a combined £1.1bn. Key ministerial departments have contracts with the company such as the Home Office, DWP, HMRC, [the Ministry of Justice], the Cabinet Office and Defra.”
Tim Wright, a technology partner at the law firm Fladgate, said: “That’s a very significant exposure and its pretty ironic considering how the FCA [Financial Conduct Authority] and the PRA [Prudential Regulation Authority] have repeatedly highlighted the dangers of concentration risk in cloud service provision for regulated entities for a number of years.
“Recent moves by HM Treasury, the PRA and FCA to establish direct oversight of ‘critical third parties’ aim to address precisely the risk of outages like that suffered by AWS, yet until significant diversification or sovereign cloud adoption occurs, the UK government’s own stance shows an uncomfortable contradiction with the very resilience principles regulators have advocated.”
The House of Commons’ treasury committee has written to the economic secretary to the Treasury, Lucy Rigby, to ask why the government had not yet designated Amazon a “critical third party” to the UK’s financial services sector – which would expose the tech firm to financial regulatory oversight.
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The committee chair, Meg Hillier, said that Amazon had recently told the committee that financial services customers were using AWS to support their “resilience” and that AWS offered “multiple layers of protection”.
More than 2,000 companies worldwide were affected by this week’s outage, according to Downdetector, a site that monitors internet outages, with 8.1m reports of problems from users including 1.9m reports in the US, 1m in the UK and 418,000 in Australia.
Among the UK government contracts, only HMRC said it was affected. It said that customers were “having problems accessing our online services”, and urged them to call back later as its phonelines were busy.
Many of the sites were restored after a few hours, but some experienced persistent problems throughout the day. By Monday evening, Amazon said all of its cloud services had “returned to normal operations”.
Meanwhile, unions have long questioned if the track record of the business regarding working conditions at its huge warehouses should rule it out of government contracts.
Andy Prendergast, national secretary of the GMB union, said: “Amazon has a truly terrible track record on treating workers fairly.
“Shocking conditions in warehouses lead to mass ambulance callouts, staff complain they are treated like robots and worked until they drop and – despite being one of the richest companies on the planet – paid poverty pay until workers went on strike for six months.
“In this context, for it to trouser almost £2bn of public money is a disgrace.”
AWS did not provide a comment. A spokesperson for Amazon’s fulfilment centres said that the “vast majority” of ambulance callouts at its sites were not “work related”.
