SIT Committee urges Palantir exit in push to finish US cloud grip
MPs on the Science, Trade and Know-how Committee have known as for a “interval of over-correction” to interrupt the cycle of provider lock-in and foster a home UK cloud ecosystem via obligatory re-competition and open supply requirements.
One notable measure advisable within the report – Rewiring the state: Delivering digital authorities – is that the UK authorities ought to train the break clause with Palantir and the Federated Knowledge Platform (FDP) within the NHS and publish a completely costed exit plan by the tip of 2026.
Elsewhere, the report highlights a “lack of competitors” in authorities cloud spending, which totals about £10bn per 12 months. It cites the March 2026 HM Income & Customs (HMRC) contract with Amazon Internet Providers (AWS) as a major instance of market failure. AWS was the only bidder for the 10-year, £472m deal, regardless of issues over restrictive licensing practices.
In the meantime, the report recommends the institution of a unit to observe and disseminate digital authorities finest practices from the European Union (EU), together with how member states encourage the event of sovereign alternate options to incumbent suppliers.
Harmful ranges of lock-in
The report warns that the UK public sector’s heavy reliance on a small group of US-based expertise suppliers – particularly Microsoft, AWS and Palantir – creates harmful ranges of provider lock-in and systemic fragility.
The committee’s report argues that these dependencies, usually pushed by proprietary software program and sophisticated, opaque contracts, undermine competitors, hinder innovation by small and medium-sized enterprises (SMEs), and expose the federal government to important operational dangers, together with potential knowledge entry by the US underneath the Cloud Act.
To deal with such vulnerabilities, the committee recommends a complete technique to attain “expertise sovereignty” and that the federal government ought to prioritise open supply alternate options and mandate {that a} outlined proportion of procurement budgets go to UK-based startups.
Key interventions embrace exercising the break clause for the NHS FDP, implementing a rigorous cloud consumption dashboard to observe provider energy, and legally requiring public our bodies to favour open requirements over proprietary programs to make sure the federal government retains the power to make strategic decisions impartial of dominant incumbents.
Key suggestions within the report
Federated Knowledge Platform: The federal government ought to decide to exercising the February 2027 break clause within the Palantir FDP contract and develop an in-house alternative or search another from UK-owned and UK-based suppliers, with a completely costed exit plan for the FDP revealed by the tip of 2026.
Knowledge entry and transparency: The federal government should verify the character of Palantir’s entry to affected person knowledge, the statutory foundation for this authorisation, when and by whom it was authorised, and whether or not the data commissioner was consulted.
NHS single affected person report: The federal government ought to prioritise utilizing UK-owned and UK-based suppliers to develop and implement this and award all contracts via open and clear procurement processes.
Ministry of Defence and Palantir: The federal government should set out the explanations for awarding a £240m Ministry of Defence contract to Palantir with no aggressive tender course of.
Procurement and SMEs: Central departments and public our bodies must be required to spend an outlined minimal proportion of their expertise procurement budgets on merchandise from UK-based and UK-owned startups and SMEs, with quarterly progress updates revealed.
Ending provider lock-in: The Authorities Digital Service (GDS) ought to produce a method to finish provider lock-in, together with targets for provider diversification throughout departments and public our bodies, with quarterly reporting.
Cloud consumption dashboard: The federal government’s promised cloud dashboard ought to embrace a breakdown of contract awards by firm, their worth, particulars of break clauses, particular licensing phrases, and a value-for-money evaluation.
All of Authorities cloud contract: The federal government ought to element how this contract will forestall provider lock-in, together with its engagement with the Competitors and Markets Authority (CMA) and the way it will embed a pro-competition strategy.
Know-how sovereignty technique: The federal government ought to outline expertise sovereignty. The definition must be reviewed yearly, and it ought to set out how the federal government intends to assist sovereign alternate options to incumbent suppliers.
Open supply within the Procurement Act 2023: The federal government ought to use the replace to this act to require public sector our bodies to prioritise open supply instruments and expertise over proprietary choices.
Knowledge entry contingencies: The federal government ought to element its contingencies for safeguarding residents’ knowledge ought to the US set off knowledge entry provisions underneath the Cloud Act 2018, and share related influence assessments.
Monitor EU digital authorities initiatives: As a part of the federal government’s “wider reset” in relations with the EU, DSIT ought to set up a unit to observe and disseminate digital authorities finest follow from, with a remit to interact with European Fee and member state-level our bodies, particularly to give attention to how the EU and member states develop sovereign different suppliers.
