The number of UK data breaches and victims has gone down in the past year, but the cost of the most serious incidents has risen significantly, a government-sponsored report shows.

The average cost of the worst breach for large organisations is £600,000 to £1.15m, up from £450,000 to £850,000 a year ago, according to the 2014 Information Security Breaches Survey.

The report, launched at Infosecurity Europe 2014 in London, was conducted by PricewaterhouseCoopers (PwC) and sponsored by the Department for Business Innovation and Skills.

The cost of data breaches for smaller businesses with fewer than 250 employees has roughly doubled to between £65,000 and £115,000, up from £35,000 to £65,000 a year ago.

This is despite a slight decrease in the number of organisations being hit, down to 81% of large organisations from 86% a year ago and 60% of small businesses, down from 64% a year ago.

The median number of breaches suffered by large organisations fell to 16 from 21 a year ago, while the number decreased to six for smaller businesses, down from 10 the year before.

Despite these dips, 55% of about 1,100 respondents said they expect more security incidents in the coming year.

Science minister David Willetts said: “Although there are some positive and encouraging signs, the fact that the cost of the worst breaches has increased so much indicates there is still work to do.

“This report is a reminder of the economic cost of cyber breaches, and the UK government takes this very seriously.”

For this reason, the government committed £860m to its cyber security programme for the five years to 2016, said Willetts.

Threats outside and in The study found that attacks from outsiders continue to cause the most security breaches, and malicious software is increasingly the means used for such attacks. But the focus seems to have shifted back towards large organisations, with 55% reporting attacks by an unauthorised outsider, compared with 33% of smaller organisations. The 2014 Information Security Breaches report is a reminder of the economic cost of cyber breaches David Willetts, science minister Nearly three-quarters of large organisations suffered from infection by malicious software, compared with 45% of smaller organisations. More than one-third of large organisations were the target of denial-of-service (DoS) attacks, while only 16% of smaller organisations suffered such attacks. Nearly one-quarter of large organisations detected that outsiders had successfully penetrated their network, compared with 12% of smaller organisations. Although 16% of large organisations reported that outsiders had stolen intellectual property or confidential data, only 4% reported the loss of such data. The study found that staff-related breaches had dropped significantly compared with a year ago, but staff continue to play a key role in security breaches. While 58% of large organisations reported staff-related breaches, down from 73% the year before, only 22% of smaller organisations reported staff-related breaches, down from 41%. However, 31% of the worst security breaches in the past year were caused by inadvertent human error and 20% by deliberate misuse of systems by staff. Chris Potter, IT risk assurance partner at PwC, said: “This means just over half of the worst breaches involved members of staff.”