Preparing for the 2025 UK Cyber Security and Resilience Bill: NIS2 alignment and regulatory impact on businesses

Executive Summary

The UK's forthcoming Cyber Security and Resilience Bill (“The Bill”) represents a pivotal moment in the nation's cyber security growth. Announced in the 2024 King's Speech, this legislation signals a strategic shift towards modernising digital defences whilst maintaining operational compatibility with European standards. If you operate across UK and EU jurisdictions, understanding the alignment between this Bill and the EU's NIS2 Directive is crucial for developing integrated compliance strategies that will protect your organisation whilst reducing regulatory burden.

The Current Regulatory Landscape

The Network and Information Security Directives (NIS and NIS2) seem to have provided the foundation for UK cyber security governance, which will enable regulatory pressure on Critical National Infrastructures (CNIs) to manage risk and threat in the evolving technology and threat landscape. The urgency of this modernisation became starkly clear in a 2024 report, when nearly three quarters of medium and large businesses report having experienced some form of cyber security breach or attack in the last 12 months.

High-profile incidents like the 2023 ransomware attack on ION Group disrupted trading and clearing operations for many financial institutions. This highlights the serious consequences of inadequate cyber security in critical financial infrastructure and the need to implement better protection against cyberattacks.

The National Cyber Security Centre (NCSC) dealt with 430 incidents requiring assistance in 2024, up from 371 the previous year, highlighting the escalating threat landscape that makes regulatory reform essential.

The Bill aims to modernise the UK approach, similar to the EU's NIS2, driven by rising threats and outdated regulations derived from the EU's original NIS Directive, according to the UK Government. This modernisation instils a more robust and resilient cyber security framework, enabling you to better protect your assets and operations.

Core Provisions of the Cyber Security and Resilience Bill

Expanded Scope and Coverage

The Bill significantly broadens the regulatory net, by protecting more digital services and supply chains, with more stringent reporting requirements that will enhance your collective security posture. This expansion mirrors NIS2's broader coverage of 'Essential' and 'Important' entities, creating a harmonised approach that will give you confidence when working with suppliers and partners across both jurisdictions.

The Bill will apply to approximately 1000 Managed Service Providers (MSPs), data centres above 1 MW capacity (or 10 MW for enterprise facilities), according to the Government. It also introduces the concept of Designated Critical Suppliers (DCS) – the UK's equivalent to high-impact supply chain providers under NIS2. This expansion provides a more secure digital ecosystem, reducing exposure to supply chain risks and enhancing your overall cyber security resilience. Once designated as a DCS, these suppliers are brought within the scope of core cyber security requirements and incident reporting obligations under the UK Cyber Security and Resilience Bill. This fills a regulatory gap not fully covered by the EU’s NIS2 Directive for third-party ICT providers.

Binding Technical Standards

A cornerstone of the new legislation is the elevation of the NCSC's Cyber Assessment Framework (CAF) to binding status (thus becoming a legal requirement), providing clear, authoritative guidance on cyber security standards.

This framework will be closely aligned with The European Union Agency for Cybersecurity (ENISA) and NIS2 guidance, ensuring consistency in cyber security standards across the UK and EU. If your organisation already follows ISO 27001 (2022), ISO 27002, or NIST frameworks, you will have a significant compliance advantage, as these standards align closely with the CAF requirements. This means your existing investments in cyber security standards will pay dividends under the new regime.

Supplier Risk Management

The Cyber Security and Resilience Bill introduces robust new requirements for supplier risk management as a core part of its regulatory framework. This marks a significant shift from previous approaches, embedding supply chain security directly into law for critical infrastructure and digital service providers.

Key Provisions on Supplier Risk Management:

1. Stronger Supply Chain Duties

• Operators of Essential Services (OES) and Relevant Digital Service Providers (RDSPs) will be legally required to manage cyber risks across their supply chains.
• These duties will include:
  • Formal evaluation of the cyber defences of key contractors and service providers.
  • Embedding security expectations into supplier contracts.
  • Implementing processes for auditing, vetting, and improving supplier practices.
  • Ensuring that vulnerabilities in suppliers do not undermine essential or digital services.

2. Designation of Critical Suppliers

• Regulators will have the power to designate certain suppliers as 'Designated Critical Suppliers' (DCS) if their goods or services are so vital that a disruption could significantly impact essential or digital services.
• Once designated, these suppliers will:
  • Be subject to the same core security and incident reporting obligations as OES and RDSPs.
  • Need to meet strict security requirements and report incidents directly to regulators.
  • Remain under this designation only if their operations are not already regulated under other cyber resilience laws.

 3. Regulatory Oversight and Adaptability

• Regulators are empowered to proactively investigate vulnerabilities and enforce compliance, including through cost-recovery mechanisms.

The Secretary of State can update supply chain and risk management requirements via secondary legislation, ensuring adaptability to emerging threats.

Incident Reporting Requirements

Both regulated organisations and designated critical suppliers must:

• Report serious cyber incidents within 24 hours.
• Submit a comprehensive, detailed report within 72 hours of the original alert.
• Notify affected customers if an incident may impact them.

This process aims to accelerate containment and improve transparency across the supply chain. It also streamlines your compliance obligations if you operate across both jurisdictions and means you will receive coordinated support from multiple agencies during incidents. This also aims to improve your recovery prospects and reduce operational impact.

Reports must be submitted simultaneously to:

• The relevant sector regulator (the authority overseeing your industry, e.g., financial services, energy, healthcare), and
• The National Cyber Security Centre (NCSC)

This dual reporting ensures both the regulator, and the NCSC are promptly informed, enabling coordinated response and sector-wide threat awareness. In some cases, if the incident also involves a personal data breach, a separate notification to the Information Commissioner’s Office (ICO) may be required.

Strategic Alignment with NIS2

The alignment between the UK Bill and NIS2 is particularly evident in several key areas, with material benefits for your organisation. Both frameworks emphasise supply chain risk management, with the UK's DCS concept filling a gap where NIS2 already applies obligations to third-party ICT providers. The incident management timelines are identical, and both frameworks place significant emphasis on business continuity and recovery planning. This convergence enables your organisation to develop integrated compliance strategies that satisfy both regulatory regimes whilst reducing duplication of effort and cost.

Practical Steps for Compliance Readiness

To prepare for the new legislation, you should:

1. Engage early : Stay updated on forthcoming regulatory requirements, attend consultations, and align with sectoral and jurisdictional guidance.
2. Conduct a comprehensive scope assessment to determine whether your organisation is covered by the Bill and identify the relevant jurisdictions that apply, particularly if you have UK and EU entities. Design a control framework aligned with the UK’s Cyber Security Bill and NIS2. Both these legislations are similar in terms of objective, so a common control framework would enable efficient compliance.
3. Budget proactively: Based on the control framework, perform an assessment, develop an action plan, allocate resources for compliance updates, incident tooling, personnel, and regulatory fees.
4. Enhance your incident response plans: Incorporate 24-hour notification and 72-hour full reporting processes. Regularly test their effectiveness to ensure seamless compliance with multiple jurisdictions’ reporting requirements.
5. Fortify supply chain governance: Identify critical suppliers and reflect resilience in contracts and periodically assess them on regular basis.

By taking a strategic approach to compliance preparation, you can transform regulatory obligations into competitive advantages that protect your organisation and enhance your market position in an increasingly competitive digital marketplace. Early action will be essential to ensure your readiness when the legislation comes into force.