Palantir Faces the Axe as UK Reviews £330M NHS Deal

Photo: Palantir's exhibition stand at the NHS Confederation conference in Liverpool, June 2022. The display promoted the company's Covid-19 vaccination programme work and quoted the King's Fund calling its Foundry platform "a single source of truth" for the vaccine roll-out. Credit: Rathfelder via Wikimedia Commons (CC BY-SA 4.0).

Some funerals are announced as reviews. The British government is conducting a full review of Palantir's £330 million contract to run the NHS Federated Data Platform — and when the review concludes, ministers will decide whether to pull a break clause in February 2027 and end the American firm's grip on the health service's data years early. For the most valuable data contract in the history of the NHS, that is as close to a death sentence as Whitehall ever issues in public.

The review, confirmed by technology minister Liz Kendall on Times Radio and first reported by Reuters in June, is back in the headlines today — and it lands in the middle of the worst week Palantir has had in Britain since it won the deal. MPs have called the company's growing presence an "unacceptable point of weakness", campaigners have protested outside more than 40 hospitals, and the London mayor has blocked a separate £50 million Palantir deal for the Metropolitan Police. Whatever the review concludes, the direction of travel is unmistakable.

The review ministers keep calling a review

Kendall told Times Radio the government would assess whether to extend the £330 million ($441 million) deal — which runs until early 2027 — under provisions allowing the government to continue it for up to seven years, or terminate it. "The current health secretary is reviewing every single aspect of that (contract) to make sure we get the right deal for Britain," she said, pointing to concerns about patient confidentiality, public trust and reliance on a US supplier.

Junior health minister Dr Zubir Ahmed went further in April, telling MPs the contract could simply be dropped if a rival does the job better. "My north star is always patient safety and quality, and of course value for money," he said, according to The Register. "If, at the point of the break clause, we evaluate and find that there are other providers that can do the job better, then of course that needs to be looked at and reflected upon." Ahmed has also said the government will "decide later this year" whether to extend the deal — which means the clock is already ticking.

We cross-checked the £330 million figure, the February 2027 break point and the shape of the deal against Reuters' reporting, the committee's published report, The Register's award-day coverage and NHS England's own materials — and where the sources disagree, which they do on the numbers most often trumpeted, we say so below. That disagreement is part of the story.

£330 million, seven years — and a February escape hatch

The contract, awarded in November 2023 to a Palantir-led consortium, covers the Federated Data Platform: the software layer meant to join up information scattered across England's hospital trusts and integrated care boards. The headline figure — £330 million — is the potential value of the arrangement over seven years, not cash already paid. The initial term ends in February 2027, when a break clause lets the government walk away or extend.

The official numbers get stranger the closer you look. Junior minister Ahmed told Parliament in May that the National Infrastructure and Service Transformation Authority rates the programme "green" and projects benefits of £777 million — while the same authority puts whole-life costs at £1.042 billion, according to The Register. NHS England says 123 hospital trusts are live on the platform and 80 are reporting benefits, with the programme eventually intended to cover 240 trusts and integrated care systems.

Then there is the bigger number. Reuters has reported that Palantir and its partners have secured some $750 million in UK government contracts since 2020, spanning the NHS and the Ministry of Defence. A Computer Weekly analysis published this week found Palantir is the single largest supplier across 2,008 UK public-sector AI procurements — £553 million across 17 contracts, including a £240.6 million Ministry of Defence enterprise agreement and the £182 million NHS England Federated Data Platform award. That is the context in which MPs are talking about dependence, not just a contract.

Radioactive from day one

To understand why this review was always coming, you have to go back to the pandemic. Palantir began working with the NHS during Covid-19 and received some £60 million in contracts without competition — including work that later fed into the Federated Data Platform, according to The Register. The November 2023 award, made under the previous Conservative government, followed what NHS England described as a rigorous competitive procurement. Critics never believed the playing field was level, and the Good Law Project has campaigned against the deal ever since, including a legal challenge to the procurement.

The objections were never really about the software. They were about the company. Palantir supplies software to the US military and to US Immigration and Customs Enforcement — the agency behind the Trump-era deportation machine — and its co-founder Peter Thiel, an early supporter of Donald Trump, has openly criticised the very concept of a national health service. The parliamentary committee's report cited Thiel's politics and the company's "explicitly political manifesto" as evidence of what it called a "clear mismatch with UK values". Two petitions urging the government to scrap the contracts amassed more than 200,000 signatures, according to The Guardian.

Then, in May, the Financial Times reported that NHS officials had proposed granting some external staff — including Palantir personnel — broad administrative access to identifiable patient data on parts of the system. For a public that regards the NHS as a protected national institution, that single report did more damage than years of campaigning.

What Foundry actually does inside hospitals

Strip away the politics and the technology is genuinely ambitious. The Federated Data Platform is built on Palantir Foundry, and its job is unglamorous but critical: take the data trapped in hundreds of disconnected NHS systems — bed occupancy, theatre schedules, waiting lists, discharge records — and make it usable in one place. Officials credit it with improvements in waiting list management, hospital operations and discharge planning.

The performance figures are contested, which is putting it politely. Figures cited by The Telegraph credit the platform with 110,000 additional operations, a 15 per cent cut in discharge delays for long-stay patients and 6.8 per cent faster cancer diagnoses — but NHS England's own published numbers have moved around, and independent reviewers have questioned how solid the evidence behind them is. That evidential fog is exactly what the review is supposed to clear.

On data protection, the official line is firm. NHS guidance says Palantir does not control the data and is not permitted to access, use or share it for its own purposes. Ahmed told MPs the company "operates with strictly a UK-regulated contract where the NHS controls all data access". If you believe the architecture, ending the contract would be a procurement decision, not a data catastrophe — the data stays with the NHS. If you believe the critics, the dependence is the point: you cannot spend three years embedding one company's software into the operational core of a health service and then swap it out like a printer cartridge.

The longest week of Palantir's British life

Whatever ministers decide, the past ten days have made the company's position materially worse. On 1 October, the "People vs Palantir" day of action saw protests at more than 40 locations across England, ending with a rally outside Palantir's London headquarters attended by hundreds of NHS patients and health workers, according to the campaign group Just Treatment. The action was part of a global week of protests across North America, South America, Europe and Australia. Several MPs turned up — Labour's Rachael Maskell, the Liberal Democrats' Martin Wrigley and independent Jeremy Corbyn among them.

The campaigners have a flair for theatre. The Good Law Project distributed spoof leaflets inside an NHS hospital warning of an "infection" in the health service — the infection, the flyers suggested, was Palantir. The Department of Health and Social Care responded with a legal threat over the unauthorised use of the NHS logo, which the campaign group called an attack on the public's freedom to criticise NHS England's decisions.

And the Financial Times has reported, citing unnamed officials, that ministers are examining British technology companies as possible alternatives to run the platform — the first concrete sign that the "develop an in-house replacement or find a UK provider" recommendation from the parliamentary committee is being taken seriously inside government. That reporting is single-sourced, and Whitehall has not confirmed it. But it fits the direction of everything else.

A Labour grandee walks through the revolving door

Palantir's response to all of this has been to hire political armour. Last month the company appointed Lord Tom Watson — Labour's deputy leader from 2015 to 2019 — as senior vice president for its UK operations, a move first reported by Bloomberg. Watson, who had been advising the firm since 2024, announced the job on X, calling Palantir "the most interesting company on the planet, doing work of real consequence". He added, with unusual candour: "Some criticism is propaganda. Some raises legitimate questions about large technology companies and sovereign control. Both require answers."

Watson has taken a leave of absence from the House of Lords and given up his parliamentary pass. Louis Mosley, Palantir's UK and Europe chief executive, said Watson would bring his "deep understanding of public policy and the digital landscape". Critics were less generous: Green MP Sian Berry called the appointment "yet another example of the corrosive revolving door between politics and big business lobbying that has no place in public life", arguing the company had "no business at all in our NHS and public services".

The revolving-door hire is not Palantir's only legal headache in Britain. In May, London mayor Sadiq Khan blocked a £50 million deal between the Metropolitan Police and Palantir after City Hall found the force had failed to run a proper procurement — a "clear and serious breach" of procedure, in the words of deputy mayor for policing Kaya Comer-Schwartz, who told Met Commissioner Sir Mark Rowley: "To date, I have not been provided with any acceptable explanation for this failure." Palantir, which called the decision politicised, is preparing to sue the mayor to get it overturned, according to The Times. A company source told the paper: "We don't take this decision lightly but we cannot stand by if procurement of our software is being politicised in this way."

Photo: Palantir's former headquarters in Palo Alto, California, photographed in 2018. The US software firm now works from Florida — but the question haunting Whitehall is whether Britain's most sensitive health data should sit on American-built software at all. Credit: FASTILY via Wikimedia Commons (CC BY-SA 4.0).

The verdict: pull the plug — and mean it this time

Here is the honest position, stripped of ministerial carefulness. The review will almost certainly end this contract. No government can survive a 70-page parliamentary report calling a supplier an "unacceptable point of weakness", two committees demanding the break clause be used, 40 hospitals' worth of protesters and its own junior minister musing about "other providers that can do the job better" — and then sign the extension anyway. The politics are settled; only the logistics are not.

But ministers should be honest about what "pulling the plug" actually means, because the procurement was botched long before it was signed. The NHS was promised federation — data staying with trusts, stitched together by clever software — and got dependence instead: three years of operational embedding, 123 trusts live, and no published migration plan for the morning after. Replacing the platform by February 2027 was always colossally optimistic; doing it while pretending the switch will be painless would be dishonest.

That is the real story for an American audience. This is one of the largest-ever reversals of a US technology contract by a foreign government — a $750 million relationship, built over six years, being unwound because a country decided its health data was a sovereignty issue. Palantir chief executive Alex Karp has argued that AI labs secretly want nationalisation to dodge lawsuits; he may soon discover what actual nationalisation-by-procurement looks like, from the receiving end. The company's software is used by US Immigration and Customs Enforcement and the Israeli military — clients Palantir is proud of. In Britain, they are the reason the contract is dying.

The technology-sovereignty argument will outlive this deal. Dame Chi Onwurah, the committee chair, put it plainly: "The UK can and should be aiming for technology sovereignty in critical parts of our public sector and supporting domestic alternatives through smarter procurement." Britain is already trying to corral the biggest AI firms with voluntary pledges — but pledges are cheap. The Palantir decision, expected within weeks, will be the first real test of whether "technology sovereignty" is a policy or a slogan. If ministers flinch, every US tech firm selling into foreign governments will know exactly how much these reviews are worth.

Sources: Reuters (June 2026 reporting on the review and the committee report); The Register (contract award coverage, May and September 2026); Computer Weekly (October 2026 public-sector AI spend analysis); The Times (Palantir's planned legal challenge to the Met Police decision); The Guardian (petition figures); The Financial Times (reported examination of British alternatives; NHS data-access proposal); Engadget; Alliance News; Pulse Today; National Technology News; NME; The Poke; Just Treatment; Good Law Project; East London Times; Healthcare Newsdesk.

By Daniel Rao. Daniel Rao covers AI, data infrastructure and the politics of technology for TechPulse USA, with a focus on how Silicon Valley's biggest contracts play out in foreign capitals.