Skip to main content

NHS Procurement: Palantir Contract

Volume 831: debated on Thursday 22 June 2023

Private Notice Question

Asked by

To ask His Majesty’s Government, in light of the contract awarded to Palantir, what plans it has to ensure that NHS contracts are procured through a public and transparent tender system as outlined in the Procurement Bill.

All NHS contracts are procured using correct procedures. This is a new transition contract with Palantir, with new and improved contract terms, including robust exit and transition schedules to support transition from Palantir to the new federated data platform supplier. This contract includes additional terms, such as termination for convenience and a six-month break clause. The contract was procured by a compliant and transparent direct award tender process, using a Crown Commercial Service framework agreement.

My Lords, it is not the first closed contract used that way, particularly for Palantir, since 2020. Ministers deliberately excluded the NHS from the new rules in the Procurement Bill, giving the Secretary of State for Health the powers to create regulations, resulting in untransparent closed contracts such as the £24 million Palantir contract just granted. Unlike every other public body and government department, senior NHS leaders are excluded from any restrictions when they move to providers, as happened last year when two senior staff moved to Palantir. These NHS practices are the exact opposite of what the Government hope to achieve in the Procurement Bill. Will Ministers please reconsider bringing the NHS under the Procurement Bill?

This was a very sensible move to ensure that the tender process we are going through at the moment allows us to transition to whoever wins the federated data platform. That is a sensible way to do it. It was done according to the Crown Office pre-tendering framework agreement, which is very transparent and well set out. It is normal in these situations that, when you need transition arrangements, you do not want hospitals left in the lurch. You need a transition so that, whoever wins the new bid, hospitals are safe in the meantime.

My Lords, it is quite easy to invent rules to get away from competitive tender and do direct awards. It goes back to the Horizon Post Office scandal, which is still there 30 years on. Why is this contract exempt from competitive tendering? What is the benefit? Given that the Procurement Bill requires it, why are the Government not doing it?

As I said, there is a very clear benefit. We are going through the process of a very large £500 million contract for a data platform that will be key to the NHS. Everyone agrees on the importance of data in health work, but we want to make sure that we have an open process so that suppliers have a chance to win the contract. In any circumstance, you need to make sure that transition arrangements are in place; otherwise, the current supplier is the one most likely to win—if there is a concern about ongoing procedures. By having a transition arrangement in place—clearly, transition can work only with the current supplier—you are making sure that there is an open process for new bidders to come in.

My Lords, the reason the Minster is able to call this contract “sensible” is that it follows on from a contract given to Palantir that was already granted without tender. This is compounding one after another. To return to my noble friend’s original point, can the Minister tell your Lordships’ House why all other public services will be subject to a Procurement Bill that hopes to deliver transparency, fairness and ethical purchasing, yet his department is exempting itself from the Bill?

This went through the long-term plan in 2019, and the idea behind it all—it was debated a lot as the Health and Care Act went through—was to provide an approach which allows the flexibility in place here. What we are doing here is very good: I do not think anyone would want to see hospitals left in the lurch and the impact that would have on waiting lists. This makes sure that we have a robust situation in place so that we have an open tender, which we are going through the process of right now to get the best solution for the NHS—something which I think we all want.

My Lords, my noble friend will recall that the review led by the noble Lord, Lord Carter of Coles, and followed up by Professor Briggs with the Getting it Right First Time programme, has made significant improvements in how the NHS procures its services. During the debates on the Procurement Bill—I hope my noble friend will say that this will indeed be taken up in the NHS—we talked about the promotion of innovation through public procurement. I wonder whether the Getting it Right First Time programme could be a mechanism for that, by bringing evidence-based innovation to the attention of procurement managers across the NHS.

I thank my noble friend. This is absolutely about enabling innovation: the data platform is there so that providers can use it to innovate. We all hear about AI, and AI depends on data. This puts in place a data platform that AI can use. It can also be used for scheduling appointments—currently done in 32 hospitals—and for the dynamic discharge of waiting lists. All those applications can work in place only if we have an open tender process, which is exactly what we are doing here, while making sure that transitions are in place so that no hospital is left in the lurch in the meantime.

My Lords, one of the issues raised during the passage of the Procurement Bill and, certainly, in the context of transparency, efficiency and getting value for money, was the keeping of some 118 million items of PPE in storage in the People’s Republic of China, at a cost of millions of pounds to British taxpayers. I have also raised this directly with the Minister. Can he give us an update as to what has happened to those items? Will they stay in storage? Are we continuing to pay and, if so, at what cost, or are we going to dispose of them? What lessons have we learned from that?

As I said in a previous Answer, we are in the process of disposing of those contracts. On many occasions, it is easy to look with hindsight. Noble Lords may remember that, at the time, there was a massive rush and countries were gazumping each other to get hold of PPE. It was very much the feeling of this House, and all the people in the UK, that we had to desperately contract suppliers to do it. Did we make mistakes? Yes. Were we right on more than 90% of occasions? Absolutely. To keep the front line going, we needed to order more than 9 billion essential items, and we did so using the very system that we are talking about here in respect of Palantir. There are circumstances—Covid is a prime example—where it is appropriate to do those sorts of direct awards. That notwithstanding, I think we all fundamentally agree that an open, transparent and competitive tendering process will always be preferable.

My Lords, the £25 million contract awarded this week is a drop in the ocean compared with the £480 million that is on its way. The scope of the federated data platform is vague, but there is no doubt that the data it stores will be both vast and sensitive, so it is vital that any procurement process is fair and transparent and enables the public to engage with it so that the system works as intended. However, 48% of adults, when asked, said that they were likely to opt out if it was introduced and run by a private company. This would have a catastrophic impact on the quality of NHS data, which is an extremely valuable resource. Do the Government recognise this as a risk? How will they ensure that we have public faith in the process?

The noble Baroness is correct: public confidence is vital, particularly in the case of data, where we are concerned about privacy. We are arranging a briefing of noble Lords so that everyone can have the opportunity to understand what we are talking about here, which is almost like the plumbing of the system. The NHS maintains primacy of use—it is the only organisation allowed to use it—and privacy will be maintained at all times. It is much better to think of whoever wins this contract—we do not know who they are—as just the technology provider, like Microsoft, for instance. We use private sector companies for technology all the time. The key thing is that the provider is protected. That is the NHS, and no one else can get access.

My Lords, the Minister talked about the plumbing, but is it not the case that, with this further contract, which has had no tendering, Palantir’s Foundry system is further embedded in the federated data platform of the NHS, and what we are effectively seeing is what the Doctors’ Association UK calls a “monopoly lock-in” that is therefore a shoe-in for the award of the next contract?

Actually, it is the opposite. It absolutely lets bidders know that, when we are assessing who the best bidder is, we are looking only at who is the best provider. We do not need to have any concerns at all about continuity or risks because we are giving them plenty of time to get their new contract and systems in place. We do not need to worry about any services being lost in the meantime.

My Lords, Palantir is a data analytical company. It wants our data. In cases where it has been in business with other people, it has used that data and sold it under the surveillance capital model. Is the Minister absolutely confident that we are safe in entrusting all of the NHS’s data to an American company? It seems to me that that is not in the best interests of a not-for-profit organisation such as the NHS.

Yes. I really appreciate having this opportunity to state categorically that the NHS will remain the data user here. The data controller will remain in place for each individual institution; sometimes it is the GP and sometimes it is the hospital. Fundamentally, everyone’s data will be allowed to be used only by the NHS in these circumstances. There are no circumstances in which Palantir—or any other supplier should it win—will have access to see individuals’ data.

My Lords, health service data is incredibly valuable. The Minister should, and probably does, understand the sensitivity of Palantir in this context. The Minister said that the quality of the contract was the only criterion. Where does price come into it? How can we build in protections against predatory pricing by the sitting tenants of contracts, who create an effective monopoly?

I think I said that we wanted the best supplier to win; I will check and correct the record if I mentioned quality only. Quality is very important because the contract has to be good, of course, but the price has to be right as well. There are a number of criteria. Again, we will hold a session so will be able to take noble Lords through the whole process. I am confident that, at the end of that process, people will feel confident that we have reached a decision on the best supplier across all the criteria.

My Lords, press coverage of this contract has indicated that an alternative British consortium was prepared for this contract. Can the Government confirm whether they examined alternative bidders, in particular British ones, given that the issue of trust in the use of data is an important one? As the noble Baroness remarked, trust in Palantir as a supplier is absent from substantial chunks of the NHS.

Again, it is important to say that the whole point of this transition arrangement was to allow us to have an open bidding process across loads of suppliers, knowing that, when they were able to put their solution in place, their transition arrangements were in place. That opened up the field to British suppliers and suppliers from around the world. We have had an open process, which has been going on for a number of months now and continues. We expect a contract award around autumn time and I can assure the noble Lord that we have looked at a whole range of suppliers to make sure that we get the best outcome.

My Lords, can the Minister confirm something that he said in a previous answer: namely, that whoever wins the federated data platform contract will not have the right to use any NHS data outside the terms of that contract? Secondly, assuming that the current provider, Palantir, does not get the contract, will the NHS put in place by the end of this transition period procedures to ensure that all the data and access that Palantir had is removed safely so that there is no ongoing situation?

I thank the noble Lord for giving me an opportunity to clarify that absolutely. The answer is yes on both counts. If Palantir is not successful in winning the contract, no data will remain on its systems; it will be transferred over completely and, as the noble Lord says, whoever ends up winning the contract will be allowed to use that data only in an NHS context—that is, in no other context at all.

My Lords, can the Minister clarify when he expects the large contract of nearly £500 million to be awarded?

Round about autumn time. Currently, we think that the contract will be awarded in September and then finalised. The new database should in place by April. Having this transition arrangement until June gives us a safety net to make sure that everything is in place.

My Lords, I welcome the opportunity of a meeting to discuss data security. Can the Minister say whether it is anticipated that that security will go beyond what is currently being established in legislation going through Parliament? If it will be stronger, why are the other protections not stronger?

I am sorry; I am not sure that I completely followed the question. It is fundamental here that everyone’s data is strongly protected in the best possible terms. As I say, we will arrange in the next few weeks a meeting where we can answer all the questions that noble Lords have and have the experts in the room as well.