What the New Cyber Security and Resilience Bill Means for SMEs

On 12 November 2025, the Cyber Security and Resilience (NIS) Bill was introduced in Parliament. This is one of the biggest updates to the UK’s cyber security legislation in recent years. Although the reforms are aimed at strengthening national infrastructure, the implications reach far beyond energy providers, utilities and government bodies. SMEs play a critical role in supply chains and digital service delivery, which means the new Bill affects them too.

The message is clear. Cyber security expectations are rising across every sector and size of organisation. SMEs that prepare early will strengthen their resilience, protect revenue and position themselves as trustworthy partners in a more regulated landscape.

What the Cyber Security and Resilience Bill Changes

The Bill updates the existing Network and Information Systems Regulations 2018. The UK government now recognises that cyber risk is interconnected. A vulnerability in any part of the supply chain can become a national issue. As a result, the Bill introduces several key changes.

Broader Scope of Organisations in Scope

The updated legislation now includes:

• Data centres
• Managed Service Providers
• Providers of electricity load control, including smart appliances and EV charging
• Digital infrastructure providers previously outside the regime

This expansion reflects how critical digital supply chains have become.

Stronger Penalties

Cyber attacks cost the UK an estimated £14.7 billion per year. Under the new Bill, penalties for failing to meet required security standards will increase, encouraging organisations to strengthen their controls.

Stricter Incident Reporting

In-scope organisations will need to report significant cyber incidents to the NCSC within 24 hours and provide a full report within 72 hours. Customer notification requirements are also expected to tighten, improving transparency and speed of response.

Greater Supply Chain Oversight

Regulators will be able to designate certain suppliers as critical. These suppliers will be required to meet higher cyber security standards and may be subject to audits and tighter contractual obligations.

Increased Regulatory Powers

The Secretary of State will have authority to issue directions to regulated organisations during national security events. Regulators will also gain enhanced enforcement powers.

Why SMEs Need to Take Notice

Many SMEs assume the Bill only applies to large organisations, but the supply chain impact is significant. Most regulated entities rely heavily on smaller providers for technology, services and support. As security requirements increase, those expectations will cascade down.

1. Rising Supply Chain Requirements

SMEs may soon face new obligations from clients, including:

• Security questionnaires
• Demonstrating compliance or certification
• Faster reporting obligations
• Contractual commitments around cyber resilience
• Potential third-party assessments

Organisations will choose suppliers that can provide assurance.

2. Increasing Risk to Smaller Businesses

As larger organisations become more secure, attackers often shift focus to easier targets. SMEs can unknowingly become the weakest link if they lack controls, monitoring or staff training.

3. Impact on Business Continuity and Reputation

A breach can cause:

• Operational downtime
• Loss of customer trust
• Financial damage
• Contract termination
• Regulatory attention if clients are affected

Even without being formally in scope, SMEs face growing commercial and reputational risk.

4. Competitive Advantage

Cyber maturity is becoming a differentiator. SMEs with strong security controls will have an edge in winning contracts and building long-term relationships.

5. Preparing for Future Regulation

The Bill has been introduced but not yet passed. Requirements may evolve, and the scope could widen. Early investment helps avoid costly last-minute remediation.

What SMEs Should Do Now

1. Understand Your Risk Exposure

• Review the services you provide and identify which clients are regulated
• Assess your digital footprint and attack surface
• Map dependencies within your own supply chain

2. Strengthen Baseline Cyber Security

Follow proven frameworks such as Cyber Essentials or Cyber Essentials Plus. Key elements include:

• Patching and vulnerability management
• Multi-factor authentication
• Secure access control
• Regular backups
• Employee awareness training
• Incident response planning

3. Prepare for Higher Customer Expectations

Speak with your clients about their cyber requirements. Understand what evidence they will need from you and update contracts where necessary.

4. Monitor the Evolving Landscape

Keep up to date with:

• NCSC guidance
• Sector-specific regulatory updates
• Government announcements

5. Treat Cyber Security as a Business Risk

Cyber security is no longer just an IT responsibility. Boards should consider:

• Ongoing investment in security
• Cyber insurance
• Continuity planning
• Staff training and awareness

Final Thoughts

The Cyber Security and Resilience Bill is designed to strengthen national cyber defences. However, its impact will be felt throughout the entire UK economy, including SMEs that supply, support or integrate with regulated organisations.

The good news is that taking action now will not only reduce risk, but also improve your competitive position. SMEs that invest in resilience will become trusted, reliable partners in a more stringent digital environment.