The UK government terminated the £27 million post-Brexit border software contract with US data analytics company Palantir, citing budget pressures, according to transparency disclosures reported by Financial Times.
The decision to end the contract, which was intended to develop a “border flow tool” to manage post-Brexit disruptions, was communicated in a September 2023 meeting, reports FT.
The meeting, attended by Sir Alex Chisholm, then the Cabinet Office’s permanent secretary, and two unnamed senior Palantir executives, revealed that the contract termination was due to budget constraints rather than dissatisfaction with Palantir’s service.
Instead, the government plans to develop an in-house model to handle the border flow data.
Palantir’s three-and-a-half-year contract, which expired in late March, involved deploying its software to analyze data on the movement of goods and people at the border.
The contract’s end comes amidst ongoing delays in the government’s post-Brexit trade border project, which has faced significant setbacks and escalating costs.
Palantir’s involvement with the UK government has not been without controversy. The company, co-founded by billionaire tech investor Peter Thiel, has secured numerous government contracts, especially during the Covid-19 pandemic, where it provided critical data analytics services to the NHS.
These services included decisions on ventilator distribution and predicting hospital demand.
Despite securing a £330 million contract from NHS England in November to develop a new patient data platform, Palantir has faced criticism from medical trade unions and NHS staff regarding its suitability to manage national health data systems.
Amnesty International and data privacy campaigners have also expressed concerns over the potential monetization of health data.
Founded in 2003 with backing from the CIA, Palantir has built its business through contracts with US intelligence, military, and police forces.
However, its work with the US Immigration and Customs Enforcement agency led to internal dissent within the company, with over 200 employees protesting its role in immigration crackdowns.
The UK border flow contract was initially awarded in August 2020, following a free trial of Palantir’s Foundry software provided to the Cabinet Office.
Documents obtained by Financial Times under FOI laws revealed that former MI6 chief Sir John Sawers facilitated a meeting between Palantir CEO Alex Karp and then-Cabinet Office permanent secretary Sir John Manzoni in 2019.
In the September 2023 meeting, Palantir expressed concerns over the government’s shift to an in-house system. However, civil servants assured that adequate data controls would be in place to mitigate associated risks.
The Cabinet Office declined to comment on whether the in-house solution would result in cost savings, citing “commercial sensitivities.”
Last month, the UK’s public spending watchdog reported that delays in the post-Brexit trade border project could increase costs to at least £4.7 billion.
In response to the contract termination, Palantir stated, “We are proud to have supported the UK government in helping to manage the smooth flow of goods and people following the EU exit. The partnership ran its full contractual term.”
