These past six months have seen an unprecedented amount of change in the world with which we were familiar. Almost overnight, we have had to adapt to a new reality. Family members have been separated for long periods of time, offices still lie empty, commercial sectors have collapsed and businesses have ground to a halt. And the long-term effects of the Coronavirus are still unknown. The challenges we have all faced since March really are unequalled in most of our lifetimes.
At Democracy Counts, we have faced the same challenges as countless other business during these uncertain times. Amongst all the bad news, we thought it may be an idea to share some better news, the story of how we have adapted to COVID-19 amongst the backdrop of so much change. We’re also conscious that we are now working with many Councils to help them plan their May 2021 elections – the first major elections that will be run amidst the pandemic. Therefore it seems only right that we explain a little more about what we’ve done as a business and how we’re able to assist others mitigate the risks of this terrible disease.
UK-wide lockdown
The first significant incursion of the Coronavirus into Europe caused Italy to impose a lockdown on 9 March 2020 – although most of Western Europe continued to operate as usual, albeit with a cautious eye on events in Italy and beyond. However just a week later, on 16 March the Democracy Counts Board announced that, in the interests of staff safety, all non-essential work-related travel would be ceased. It was also announced that all office-based staff would commence a trial of home-working that week.
As part of our ISO 22301 accreditation, we are aware of the threats to business continuity; we have planned for them and are prepared for them.
By the end of that week, we had assured ourselves that we could continue our Client Care activities without interruption and without reducing our service levels to clients. We therefore announced that we would be extending our home-working practices to all Democracy Counts staff on 19 March.
The following Monday, 23 March, the UK Government announced the nation-wide lockdown.
As businesses across the UK scrambled to relocate their operations to more home-based environs, trying to secure laptops, set up remote working policies and enhance bandwidth, our staff were answering client queries as usual, having already been working from home for several days. We also communicated escalation procedures to all our clients if they did experience any drops in service provision quality, using their assigned Client Services Manager as their first point of contact. We are pleased to confirm that no issues were reported by any users.
Economic impacts
The economic impacts of COVID-19 are not yet fully known – and are unlikely to be fully quantifiable until the economy returns to normal, whenever that may be.
There are undoubtedly some comparisons to the 2008 economic downturn: long-term uncertainty; short sharp economic collapse; and various government-led stimulus packages to help the economy react to the short-term shocks.
However, there are some key differences that make the 2020 issues more complex and, as a result, potentially far more reaching. Firstly, in 2008 the fundamental economic structure remained unaffected – consumers could still spend and trade continued operating in the same way as before. In 2020 however, lockdown reduced high-street spending and redirected consumer commerce online; plants closed, affecting supply chains; demand reduced and job losses were felt across the board. In the UK the economy plummeted by 20.4% in April 2020 alone – the largest single month drop since records began. In addition to the economic impacts, there was also, of course, the health-related impact of the Coronavirus itself upon those affected – either directly or indirectly.
Governments across the globe adopted varying stimulus packages for businesses and workers in an attempt to contain the economic damage caused. In the UK the Chancellor, Rishi Sunak, announced the Coronavirus Job Retention Scheme in March 2020, which allowed employers to stand down workers but claim government grants to cover 80% of their wages, up to £2,500 per month. Recent estimates put the total value of the support package at £190bn.
In recent figures published by the ONS as the lockdown started to ease in the summer, 95.3% of business across all sectors reported to have used government-assisted funding since March 2020 to ensure the ongoing viability of their operations.
Furthermore, the impact on bottom lines has become quickly evident. Of those businesses surveyed by the ONS, 63.9% reported suffering decreases to their turnover, with 21.8% of organisations stating that turnover had been impacted by over 50%. Whilst the retail and service sectors were undoubtedly hit hardest, even professional and technical sectors (within which group we would consider ourselves) saw significant impacts – with almost 60% reporting turnover decreases.
At Democracy Counts, our stable business model has meant that we have not had to access any government funding, nor have we placed any staff on furlough. Indeed, we have actually continued to take on staff during this period to support our continued growth in the electoral services market. We have even re-employed staff who had been due to leave but whose new employment was impacted upon by the lockdown. We have also not seen any impact upon our turnover – in fact we have increased our client base significantly since March, with seven new local authorities joining us since March. This surge of new clients is in fact our second-largest increase in a quarter since we started operations in 2009. All of these are signs of a robust and thriving business.
Unlike many of the other software providers in the UK EMS market, we do not rely on third party providers for the provision of any of our products or services – therefore supply chain issues, and other consequential impacts of the lockdown, did not affect our ability to continue to provide any of our core offerings. As a result, our clients experienced no interruption or disruption to the products and services upon which they rely.
Cyber security
As with most instances of national or international crisis, the COVID-19 pandemic has coincided with a rise in organised criminal activity. It is noteworthy, however, that the focus of criminal activity seems to have shifted into organised cyber-attacks, with PwC estimating that there has been an 80% increase in ransomware leaks in the UK since the imposition of lockdown on 23 March.
There are many potential reasons for this. PwC speculate that a reduction in consumer spending means that organised crime groups that traditionally go after credit card details are now seeking new income streams and are focusing instead on businesses and large corporations. The speed with which organisations have had to shift their operations from office to home-based working has accelerated this trend, with security vulnerabilities that had previously been undetected now being more readily exploitable by criminal groups.
At Democracy Counts, we have always taken cyber and infrastructure security seriously and have held Cyber Essentials accreditation for some time. However, as part of our ongoing process of security systems review and improvement, we recently undertook an extensive external audit of our systems and were awarded the Cyber Essentials Plus accreditation in June – certifying the resilience of our infrastructure to withstand any external threats or attacks.
Our insistence on security and encryption has also provided assurance to our clients during this time of rapid workplace redeployment. Our Electoral Management System, Elector8, is the only product in the UK market that encrypts electoral data whilst at rest – meaning that should someone exploit any vulnerabilities within a local authority network, then the details of citizens in their electoral database would remain inaccessible and secure.
Part two, which looks at how we've adapted our ways of working and our client services, as well as looking forward to what the next months may bring, will be published on 18 September.