UK intelligence oversight in crisis amid budget cuts and rising threats, report finds

The UK Parliament’s Intelligence and Security Committee (ISC) has published its comprehensive annual report, examining the country’s national security architecture and the activities of the intelligence community.

The document, the first report of its kind published since 2023, details the operational challenges and evolving threat perceptions faced by agencies such as MI5, MI6 (SIS), and GCHQ, while presenting striking data on serious shortcomings in oversight mechanisms.

The report stated that at a time when state-sponsored threats, the terror threat, and cyberattacks are simultaneously on the rise, the Committee responsible for overseeing these activities on behalf of Parliament has reached a point where it “cannot fulfill its statutory functions.”

Oversight mechanism in a resource crisis

One of the most notable sections of the report highlights that while the budget and staff numbers of the British Intelligence Community have rapidly increased, the Committee that oversees them has been forced to downsize.

According to the document, while the intelligence agencies’ budget has increased by £3 billion annually compared to 2014, the Committee’s budget has decreased by 23% in real terms over the same period.

Similarly, while MI5, GCHQ, and other security units have doubled their staff numbers, the Committee’s staff has been reduced by 40%.

Committee members emphasized that this is not merely an administrative issue but a direct blow to Parliament’s ability to scrutinize “activities conducted in secret and funded by the public purse.”

The report asserted that the Committee should have an independent office and that the Cabinet Office’s control over Committee staff is “unacceptable.”

The China threat and the “Whole-of-State” approach

The Committee described the threat posed by China to the UK’s national security as “comprehensive and complex.”

The report claimed that Chinese intelligence is “almost certainly the largest intelligence apparatus in the world” and that it targets UK interests in an “aggressive and prolific” manner.

Highlighting Beijing’s use of a “whole-of-state” approach, the report alleged that state-owned enterprises, academic institutions, and even ordinary citizens “can be co-opted into espionage and interference operations.”

The Committee found the British government’s strategy against this threat to be inadequate, stating that the pace of policy development is far too slow compared to the scale of the threat.

The report included the following statement regarding the government’s China policy:

“I welcome the Government’s attempt to respond to our Report. However, to imply, as the Government has, that our findings are out of date is misleading. We have monitored and noted all relevant developments throughout the Report, up to two months before publication. Given the glacial pace at which the Government’s China policy has evolved, this has not been difficult to do.”

The Committee criticized the government’s reluctance to include China in the “Enhanced Tier” of the Foreign Influence Registration Scheme (FIRS) under the new National Security Act.

Details on Russia and Iran

The document also claimed that threats from Russia and Iran remain at a high level, asserting that Russia has “embarked on sabotage campaigns across Europe to destabilize Western support for Ukraine.”

It was noted that in May 2024, the UK expelled the Russian military attaché and removed the diplomatic protection from several Russian-owned properties.

Iran, meanwhile, was alleged to be “continuing its plots to assassinate and kidnap dissidents on UK soil.”

Terror threat at a “serious” level

The terror threat level in the UK was stated to remain at “SUBSTANTIAL.” It was disclosed that MI5 and the police have thwarted 43 late-stage terrorist plots between March 2017 and March 2025.

According to the report, the primary threat in the country continues to be Islamist terrorism, while the threat from Extreme Right-Wing Terrorism (ERWT) also persists.

It was stated that the conflict between Israel and Hamas has had a “galvanizing effect” on extremist groups in the UK, and organizations like Al-Qaeda and ISIS are using the situation for their own propaganda.

The terror threat related to Northern Ireland has been downgraded to “SUBSTANTIAL,” but it was noted that groups like the New IRA maintain their intent to attack and that pressure from security forces must be sustained.

Crisis in meetings with the Prime Minister

The report also documented the breakdown in relations between the Committee and the Prime Minister. It was noted that from its establishment in 1994, the Committee held regular annual meetings with the Prime Minister for 20 years, but the last meeting took place in December 2014. This disconnection, lasting over a decade, was said to have weakened the oversight mechanism.

However, the report mentioned that the new Prime Minister, who took office after the July 2024 general election, has taken steps to change this situation and has requested a meeting with the Committee. The Committee described this initiative as “positive engagement.”

Legislative and authority debates

The Committee stated that it actively participated in the processes for the 2023 National Security Act and the 2024 Investigatory Powers (Amendment) Act. It was emphasized that during the changes to the “Triple Lock” mechanism, the Committee objected to the broad powers proposed by the government regarding the delegation of the Prime Minister’s authority, ensuring that stricter safeguards were added to the law.

Furthermore, it was criticized that the Memorandum of Understanding (MoU) signed under the 2013 Justice and Security Act is outdated.

It was noted that intelligence activities are increasingly being shifted to policy departments (such as the Investment Security Unit), but these units fall outside the Committee’s oversight jurisdiction.

The Committee called on the government to remain committed to its promise of “oversight of the full range of intelligence and security activities.”

“Artificial intelligence has increased the volume and impact of cyberattacks”

The report also touched upon the activities of GCHQ and the National Cyber Security Centre (NCSC), warning that artificial intelligence is being used to increase the volume and impact of cyberattacks.

It was predicted that state-sponsored actors and cybercriminals could use AI tools to launch more sophisticated attacks. Ransomware attacks, in particular, were identified as the most immediate threat to the UK’s critical national infrastructure.

The report also drew attention to the cyber-espionage activities of the China-based “APT31” group targeting British MPs and the Electoral Commission, as well as the “hack-and-leak” operations of the Russia-linked “Star Blizzard” group.

Financial data in the report indicated that the total budget for the British Intelligence Community (MI5, SIS, GCHQ) was approximately £4.9 billion in the 2023-24 fiscal year.