Implications of the UK Ransomware Payment Ban for Public Sector ICS Environments

The UK government’s new policy to ban public sector organisations from paying ransoms to cybercriminals is a pivotal shift in the national cybersecurity landscape. Announced in July 2025, this move is aimed at cutting off the financial incentives for ransomware attacks targeting hospitals, councils, and other public bodies. While the intention is strategic, the implications for OT cybersecurity—particularly in ICS environments used in public utilities and infrastructure- are significant.

Why This Matters for OT Security

Operational Technology (OT) systems—such as those controlling water treatment, energy grids, and transport—are often part of the public sector. Many of these systems:

• Run legacy platforms with limited patching options.
• They are exposed to third-party supply chains and remote access vectors.
• Have limited segmentation between IT and OT layers.

A successful ransomware attack can halt physical processes, damage assets, and endanger public safety. With ransom payments banned, these systems must be hardened further—there’s no financial fallback.

Risk-Based Analysis Using IEC 62443

IEC 62443-3-2 recommends conducting a risk assessment to prioritise which systems require protection based on potential operational impact. For public sector OT environments, this involves:

1. Identifying zones and conduits (IEC 62443-3-3).
2. Evaluating the likelihood and impact of compromise across systems.
3. Defining target security levels (SL-T) that reflect safety, environmental, and continuity risks.

Zones supporting public safety or critical services should be designed to meet SL 3 or higher, requiring strong access control, authentication, and monitoring.

The ICS Threat Landscape in the UK

ICS and OT networks in the UK face persistent threats from both cybercriminal groups and nation-state actors. Key characteristics of the current threat landscape:

• Ransomware-as-a-Service (RaaS) models make ICS environments attractive, especially in public infrastructure, where downtime has a real-world impact.
• Groups like LockBit, Black Basta, and Akira have previously targeted UK water, energy, and local authority systems.
• The NCSC and CPNI have repeatedly warned of state-sponsored actors (including those from Russia, China, and Iran) probing energy, transportation, and health infrastructure.
• Third-party remote access (often via OT support contractors) is frequently exploited as an initial entry point.
• Increasing use of commercial ICS/OT devices with cloud connectivity creates new attack surfaces.

Attackers often conduct long-term reconnaissance, remain dormant, and then deploy destructive payloads—making recovery difficult and expensive if not well-prepared. UK ICS operators are also seeing more “double extortion” tactics, where attackers not only encrypt files but also steal data to pressure organisations into paying.

*The changing share of attack vectors over the past four years.

Investing in Cybersecurity Costs Less Than Paying Ransom

The average ransomware demand against public sector entities in the UK has reached six to seven figures per incident. That’s before counting:

• Recovery costs.
• Business continuity losses.
• Reputational damage.
• Regulatory fines (especially under NIS2).

By contrast, building basic cybersecurity hygiene—segmentation, access control, backups, and detection—typically costs a fraction of a single ransom demand.

£100,000 spent on preventive controls is far cheaper than £1.5M lost in ransom + recovery + downtime.

Cybersecurity is now an operational cost of running OT—not an optional insurance.

*How prevention costs compare to ransom and recovery expenses

Key Mitigations Required (Beyond “Don’t Pay”)

Instead of relying on ransom payment as a last resort, public sector bodies must invest in:

1. Backup and Recovery (NCSC 10 Steps / IEC 62443-2-1)

• Fully offline, immutable backups of OT configurations and logic.
• Regular validation of restore procedures.

2. Segmentation and Access Control (IEC 62443-3-3 SR 5 & 1)

• Physical and logical separation between OT and IT networks.
• Strict access control, MFA for remote sessions.

3. Logging, Monitoring, and Anomaly Detection

• Use passive monitoring for OT.
• Log integrity and availability events (required by IEC 62443-2-4).

4. Incident Preparedness and Drills (NIS2 & IEC 62443-2-4)

• Create response plans that do not rely on ransom decryption keys.
• Test them regularly with tabletop and red/blue team exercises.

Sector-Specific Case Study (UK Water Utility)

In 2023, a UK water supplier experienced a ransomware attack that disabled its SCADA systems for 48 hours. Had the ransom payment been banned then, operations would’ve stalled longer. Applying IEC 62443-2-1 guidelines—particularly strong incident response, offline backups, and vendor response SLAs—could have cut downtime to under 24 hours.

Aligning with NIS2 and UK Regulations

Under NIS2 and OES incident reporting rules:

• Ransomware incidents affecting essential services must be reported within 72 hours.
• The ban on ransom payments will likely shape enforcement expectations. Authorities will expect demonstrable resilience, not reactive payments.

This elevates the importance of compliance with IEC 62443-2-1 (policy, roles, incident management) and -2-4 (secure integration by vendors).

Final Thoughts

The ransomware payment ban signals a clear policy shift: recovery, not ransom. For public sector OT and ICS operators, this means stronger engineering discipline, regular drills, and alignment to standards like IEC 62443, NIS2, and NIST SP 800-82r3.

Spending on proactive cybersecurity controls is not only more effective—it’s cheaper than crisis recovery.