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Lock-in to a small number of suppliers holding up digital government plans, committee says
MPs have told the government to cut its ties with Palantir, and end the US spy-tech firm's controversial involvement in the National Health Service's Federated Data Platform.
Warning against vendor lock-in across government, the House of Common science and technology committee said it was most concerned about Palantir, which had secured central roles in health and defense systems.
“Palantir should not have a such a significant role in the UK public sector… it is far from the only company capable of providing the data analysis ‘middleware’ required by public bodies,” the report from the Science Innovation and Technology Committee said.
The report notes concerns about Palantir’s origins as a company getting a foothold in government with security, immigration services, and defense contracts. It also describes the political musings of co-founder Peter Thiel and CEO Alex Karp.
However, it added: “Our view that Palantir’s increasing presence across the public sector represents an unacceptable point of weakness is not ideologically motivated or driven by concerns about the quality of their products. The government should retain the ability to pick and choose individual suppliers and safeguard against the risk of vendor lock-in and debilitating dependencies, particularly in areas of critical national importance such as healthcare and national security infrastructure.”
Palantir won the £330 million Federated Data Platform (FDP) contract in November 2023 after a procurement process, which NHS England, the soon-to-be-defunct health quango, maintained was open and fair. The award followed £60 million in Covid-era NHS contracts awarded without competition.
The committee recommended that the government use the February 2027 break clause in the FDP contract and either “develop an in-house replacement or seek an alternative developed by UK-owned and UK-based providers that are more compatible with UK values, and do not pursue either technical or contractual dependencies.”
The Science Innovation and Technology Committee said dependency on a small number of suppliers, locked into repeated government contracts, was one of the factors holding up delivery of the broader vision for digital government. The others included over-reliance on legacy systems, the problem of digital sovereignty and over-hype by senior politicians and industry figures.
Dame Chi Onwurah MP, Committee chair, said: “We welcome the government’s intentions to make the UK a ‘truly digital state,’ but it’s not clear how this will be delivered. Without a detailed and measurable plan, it risks falling short – but there’s still time to put this right.
“A critical part of this transformation should include reducing the UK’s dependence on a small number of big US tech companies like Palantir. Vendor lock-in isn’t inevitable, and the current position leaves us seriously exposed. The UK can and should be aiming for technology sovereignty in critical parts of our public sector and supporting domestic alternatives through smarter procurement,” she said.
The committee said the government needed to get its approach right before embarking on ambitious projects such as the digital ID scheme, expected to roll out by the end of the current Parliament. Without modernized digital infrastructure, digital ID will struggle to succeed, and to keep citizens’ data secure.
“Only once the foundations of the UK’s digital infrastructure are secure, and public trust has been gained, should the government proceed with its planned digital ID. The success or failure of this project will be a defining test of its wider digital transformation ambitions," Onwurah said. ®
English (US) ·