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MoD Payroll Hack: Defence Secretary Reveals Contractor’s Identity Amidst Allegations of Chinese Cyber Attack



Defense Secretary Grant Shapps has identified the contractor managing the Ministry of Defense system that was compromised in a cyberattack attributed to China, according to Sky News. China has rejected these claims, labeling them as "completely fabricated."

By Faye Brown and Alix Culbertson, political correspondents

Tuesday, May 7, 2024, 7:

Defence Secretary Grant Shapps has announced the identity of the contractor responsible for managing the Ministry of Defence's payroll system, which was compromised in a cyberattack attributed to China.

Mr. Shapps informed the parliament that Shared Services Connected Ltd (SSCL) is the contractor involved, and in light of the recent cyber attack—a claim which China has refuted—their operations are undergoing a government-wide review.

Politics Live: Government hints at 'hostile entity' in Defense Ministry cyberattack, declines to specifically blame China

The government official initially refrained from identifying the payroll service provider, but informed members of parliament that there are indications of "possible shortcomings" which "could have facilitated the malicious entity" in obtaining the banking information of military personnel and veterans.

Responding to the situation, John Healey, the shadow defence secretary from the Labour Party, stated that the government needed to address "numerous significant inquiries." He further highlighted that Shared Services Connected Ltd is responsible for handling core payroll and additional business services under a contract with the Ministry of Defence (MOD).

Mr. Shapps responded, "The contractor he mentioned, SSCL, is indeed the correct one."

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"I have asked the Cabinet Office for a comprehensive evaluation of their activities throughout the government and inside the Ministry of Defense, which has already begun."

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Sky News reported yesterday evening that China's government successfully infiltrated the payroll system of the Armed Forces.

China has dismissed the allegations as "utterly false and defamatory."

The hack revealed the names, addresses, and banking information of active members and some veterans from the Army, Royal Navy, and RAF.

SSCL operates as a branch of Sopra Steria, a technology firm headquartered in Paris. It is the leading supplier of business support solutions to the UK government, military, and the Metropolitan Police Service.

According to its website, the organization offers payroll, HR, and pension services to 230,000 active military members and reservists, as well as two million veterans. It assures a completely safe and secure service, with data protection at the highest standards.

Previously, Rishi Sunak declined to directly accuse China of cyber hacking, but he noted that Beijing possesses "fundamentally different values from ours" and is behaving in a manner that is increasingly authoritarian and assertive internationally.

Government participation cannot be discounted

Addressing Members of Parliament, Mr. Shapps mentioned that the possibility of government participation in the issue should not be dismissed. He refrained from specifying China as the involved party, citing that disclosing the identity of the suspected perpetrator would compromise national security.

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Ex-leader of the Conservative Party, Sir Iain Duncan Smith, expressed to the Politics Hub with Sophy Ridge that there is a reluctance to accurately label China's true nature.

He mentioned that the Foreign Influence Registration Scheme allows for the possibility of classifying them in the enhanced tier, indicating they are a threat. He strongly advised the government to take this action swiftly.

Former armed forces minister Mark Francois criticized the decision to avoid naming Beijing, urging the government to take a stronger stance against China.

He informed the House of Commons, "This is going to cause great concern among service members, their families, and veterans.

"They feel insulted that the government apparently indicated last night that China was involved, but then lacked the courage to affirm this in the House today, presumably because the Foreign Office called and advised against it."

Mr. Shapps stated that the government took "all possible measures" to prevent any premature disclosure of the">king incident until he could address parliament. He explained that the focus was on shutting down the system and guaranteeing that staff received their salaries "before we approached this chamber."

"We definitely had no intention of sharing or discussing the story publicly. However, given the high number of individuals potentially affected, it was nearly inevitable that people would discuss it, and I think that's how it became known to the public."

Further Reading: Officials appear uncomfortable as the state refrains from openly blaming Beijing. Beijing represents a 'persistent' risk to cybersecurity in the West.

He stated: "A comprehensive inquiry has been initiated, involving assistance from the Cabinet Office and the input of external specialists, to assess the contractor's possible shortcomings and to reduce the likelihood of such occurrences happening again in the future."

Mr. Shapps stated that as many as 272,000 members of the service could have been impacted by the data breach and outlined an eight-point strategy to assist and safeguard those who might be affected.

Preliminary inquiries indicate that there appears to be no data stolen, however, as a safety measure, the impacted military members have been notified.

Mr. Shapps emphasized that the payment network operates as "an independent system, entirely distinct from the MoD's main network."

He expressed his regret to "the individuals impacted by this incident," noting that "this should never have occurred."

A representative from the Chinese embassy in London refuted claims that China was involved in a hack of the Ministry of Defence, stating that the embassy had already addressed these allegations on March 25 and March 27.

He charged the UK with making cyber security a political issue and asserted that there was no concrete proof of China infiltrating the Ministry of Defence's networks.

Sky News has reached out to SSCL and Sopra Steria seeking their response.

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