UK government cuts Palantir costs, moves refugee housing tech in-house

The UK Ministry of Housing, Communities and Local Government (MHCLG) has replaced its Palantir IT system for the Homes for Ukraine scheme with an in-house solution, saving millions of pounds annually. The original system, initially provided for free by Palantir before incurring contracts worth £4.5m and £5.5m, was deemed less flexible than the new internal platform. The replacement, operational by September 2025, aims to reduce reliance on external suppliers and improve data control, a move welcomed by critics of Palantir’s public sector contracts but noted by experts as requiring significant civil service investment.

Palantir UK government Homes for Ukraine IT procurement in-house technology Palantir UK Ministry of Housing Communities and Local Government Homes for Ukraine National Audit Office Terence Eden Emma Logan Rob Miller politics

The MHCLG described the new in-house system as "more flexible" and capable of meeting "high standards" of security. Coco Chan, a senior digital leader on the project, stated the department set a precedent by moving a complex live system in-house, thereby reducing reliance on external suppliers. Terence Eden, a former government technology advisor, described the move as a step towards "sovereign technology," arguing the Civil Service can outperform private companies like Palantir when given suitable resources.

Palantir stated it was proud to have supported the scheme, noting it stood up a solution in nine days that enabled the safe resettlement of over 157,000 refugees. Palantir also clarified that its software is used for broader military support, demining, war crime investigations, and school safety in Ukraine, and argued the change demonstrates there is no risk of vendor lock-in.

The Homes for Ukraine scheme was established in March 2022, less than a month after Russia's full-scale invasion. To set this up quickly, then-Conservative government ministers accepted an offer from Palantir to build a system to administrate the scheme, based on its Foundry platform, for free for six months. Subsequent 12-month contracts were awarded, with the National Audit Office noting concerns about the firm's practice of offering a zero- or nominal-cost initial offer to gain a commercial foothold.

The report noted the Government's chief commercial officer informed Palantir of his concern about this practice, arguing it was contrary to public procurement principles requiring open competition. Palantir maintains government guidance suggests running pilots of systems and asking if they can be supplied for free. The NAO report also said there was a desire to replace the Palantir system.

Emma Logan, deputy president of BCS, The Chartered Institute for IT, told the BBC there were clear advantages to building some digital services in-house. But she said "external specialists can bring experience, specialist skills, and the ability to put large teams in place quickly, which can be particularly important for urgent national programmes". Rob Miller, of Public Digital, added that the government should not just consider whether to curb reliance on big tech "but how quickly it is willing to invest in the capability to do so."