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UK ended Palantir post-Brexit border deal over ‘budget pressures’

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The UK government pulled the plug on a £27mn post-Brexit border software contract with US data analytics company Palantir because of “budget pressures”, according to transparency disclosures.

In a meeting in September last year, the Cabinet Office told Palantir it would be “terminating the contract” awarded in 2020 to develop a “border flow tool” designed to help manage disruption following the post-Brexit transition period.

The decision was taken “due to budget pressures, not because of dissatisfaction with the service”, according to a readout of the meeting obtained by the Financial Times under Freedom of Information laws.

Instead, the government indicated it would develop an “in-house model”, according to the notes of the meeting, which was attended by Sir Alex Chisholm, then the Cabinet Office’s permanent secretary, and two unnamed senior executives at Palantir.

Palantir’s three-and-a-half-year contract to deploy its software in order to gain insights from data on the movement of goods and people at the border expired in late March and has not been renewed. 

The government’s move comes as its programme to build a post-Brexit trade border continues to be hit by delays, and points to Palantir’s uneven progress in securing UK state contracts.

The company’s foray into the UK has drawn controversy. It accelerated during the Covid-19 pandemic, when Palantir positioned itself as the go-to data analytics provider for the NHS, from helping to decide how to distribute ventilators to predicting demand at hospitals.  

Palantir, co-founded by billionaire tech investor Peter Thiel, has won hundreds of millions of pounds’ worth of government contracts since the pandemic. Its clients include the Ministry of Defence and the Department for Housing, Levelling Up and Communities.

In November, NHS England awarded Palantir a £330mn contract to develop a new patient data platform.

Medical trade unions and NHS staff have voiced concerns over the suitability of Palantir to run national health data systems, as well as the dangers of the service relying on a single private company for critical functions.

Amnesty International, the human rights advocacy group, and data privacy campaigners have asked for assurances that Palantir will not seek to monetise health data via the contract. 

Founded in 2003, Palantir was originally backed by the CIA and built its business through contracts across intelligence, military and police forces in the US. 

The use of Palantir’s software by the US Immigration and Customs Enforcement agency as it cracked down on undocumented immigrants proved controversial at the company itself, with more than 200 employees confronting chief executive Alex Karp in 2019 over the matter, according to The Washington Post. 

The UK border flow contract was awarded in August 2020, with Palantir having originally provided the Cabinet Office with a free trial of its Foundry software.

In 2019, former MI6 chief Sir John Sawers helped set up a meeting between Karp and Sir John Manzoni, then permanent secretary at the Cabinet Office, according to documents obtained under FOI laws by news website openDemocracy. 

In the meeting with Chisholm in September 2023, Palantir raised concerns over the government’s proposal to move to an in-house system, according to the meeting notes.

But civil servants said the government was working to ensure “that the correct data controls are in place in its solution, mitigating any associated risk”, show the notes.  

The Cabinet Office declined to comment citing “commercial sensitivities”. It did not address whether or how the government would be able to save money by building an in-house solution.

The UK’s public spending watchdog last month said delays would in part push up the costs of the project to build a post-Brexit trade border to at least £4.7bn.

Palantir said: “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.”

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