The UK extended a contract with Palantir by an extra year and an additional £5mn to support its Homes for Ukraine programme, underlining the government’s reliance on the controversial US tech group.
The Ministry of Housing, Communities and Local Government (MHCLG) confirmed in a Freedom of Information request that it had exercised an option to extend Palantir’s contract in September 2024, taking the total value of payments to £15mn — more than the £10mn figure previously reported to parliament.
While the additional payments appeared in the department’s spending data, it did not separately publish a notice recording its decision to extend the contract or the new value of the deal.
The contract extension shows the government’s dependence on Palantir for the delivery of major public programmes.
Ministers are under growing pressure to reduce their dealings with the US tech company following scrutiny of its ties to the US defence sector and the Trump administration’s immigration crackdown.
The FT reported last week that ministers have identified UK technology companies they hope might be candidates to take over the NHS’s £330mn Palantir-built data platform, as they consider applying a break clause in the contract next year.
Defence minister Lord Vernon Coaker has also told parliament that the government was sounding out alternative suppliers for Palantir’s MoD contract.
As early as 2023, a National Audit Office report on the Homes for Ukraine scheme said government officials acknowledged they “should plan to move away from Palantir”. MHCLG said that it started building an in-house alternative in “the summer of 2024”.
The NAO also noted that the government had abandoned the usual competitive procurement process in favour of quickly rolling out the support for Ukrainian refugees.
Palantir initially provided the IT system for the Homes for Ukraine programme free of charge. In September 2022, the company secured a one-year contract for a fee of £4.5mn.
A senior UK official raised concerns at the time about Palantir’s contract.
Gareth Rhys Williams, the government’s chief commercial officer who oversaw procurement, wrote to Palantir in February 2023 “noting his concern about the practice of offering services to public sector customers for a zero or nominal cost to gain a commercial foothold, contrary to the principles of public procurement which usually require open competition”.
A Palantir spokesperson said: “Clearly, the urgency of the situation meant that time was of the essence and moving fast helped deliver Ukrainians to safety more quickly.”
Local authorities complained the software was initially difficult to use and had not been sufficiently tested, the NAO report also noted.
In September 2023, Palantir secured a £5.5mn contract to extend its services to MHCLG for another year.
The FOI request by accountability and research group Aria reveals that the government then exercised an option to extend the original contract again from September 2024 to September 2025 at a cost of an extra £5mn, bringing the total paid to Palantir to £15mn.
Palantir said: “We’re proud to have stepped up to support the emergency resettlement of Ukrainian refugees after war broke out, and to have stood up a solution in just nine days, which helped to bring 131,000 of them to safety in the UK.
As the programme shifted from being about processing the monthly arrivals of thousands of people to managing a more static population, we helped the government to transition on to its own system.”
An MHCLG spokesperson said: “The Homes for Ukraine scheme needed a digital service to be built and operated quickly so we could help Ukrainians fleeing conflict find safe accommodation with UK hosts immediately.”
“As the programme moved to a steadier service, we created an in-house platform to better meet the longer-term needs. The extension option in the contract was used to ensure we had enough time to build the in-house system, and all spending on this has been published.”
The department moved to an in-house alternative in September 2025, called Share Homes for Ukraine data.
In April this year, MHCLG said it had saved “millions of pounds a year in running costs” by moving to an “in-house model” after the end of Palantir’s contract.
Dame Chi Onwurah, a Labour MP who chairs the House of Commons science and technology committee, said: “Our dependence on Palantir, and a small number of other US tech companies, is a serious vulnerability that must be addressed.”
“The government must do more to urgently develop domestic alternatives — without them, the UK will struggle to secure the technological sovereignty and control over critical public infrastructure that it needs.”
On Tuesday, the Financial Conduct Authority said a “time-limited proof of concept” contract worth £375,001 with Palantir, to test whether the company’s AI systems could help fight financial crime, had come to an end.