Louise Haigh has signalled that the government could end Palantir’s work with the NHS as Labour’s annual conference opened in Liverpool on Sunday, warning that Britain must build domestic AI capabilities rather than become “in hock” to foreign technology companies.

Haigh, Chancellor of the Duchy of Lancaster, told Labour delegates that the government would take a “deliberate approach” to deploying AI in public services, while ensuring the public remained in control and benefited from technological advances. She said ministers would build sovereign capabilities and support the UK technology sector.

The comments come as pressure grows on the government to terminate Palantir’s £330 million contract to operate the NHS Federated Data Platform (FDP). The seven-year agreement, signed in 2023, includes a break clause that could allow the NHS to end the arrangement in February 2027.

In July, the Health and Social Care Committee urged ministers to begin preparing for a replacement supplier, citing concerns over public trust, data security and the effectiveness of the FDP. Committee chair Layla Moran said the government should “crack on with preparations to find an alternative” before spring 2027.

The committee said NHS England had been unable to establish that the FDP was responsible for improvements in NHS performance because other variables had not been controlled for. It further noted that some NHS trusts already had capabilities exceeding those offered by the platform, meaning alternative systems could potentially be deployed across the health service.

Palantir has disputed concerns about the FDP’s effectiveness, saying its software has helped NHS trusts deliver 117,000 additional operations, reduce discharge delays for long-stay patients by 14 per cent and improve the number of patients receiving a cancer diagnosis or exclusion within 28 days by five per cent. The company has said NHS trusts control how the software is used and that NHS data remains in the UK.

Scrutiny of Palantir extends beyond its NHS contract, with the company holding more than £600 million in UK public-sector agreements covering areas including defence, financial regulation and policing. In May, London mayor Sadiq Khan blocked a proposed £50 million Metropolitan Police contract with Palantir after City Hall raised concerns over procurement procedures, value for money and potential dependence on the company’s systems.

The government’s wider approach to Palantir is being considered as Labour members push for an NHS contract cancellation, citing the company’s work with US immigration authorities and the Israeli military. Palantir has defended its work with the NHS and said its technology is helping public services manage data and improve outcomes.

Andy Burnham is expected to review the NHS contract if he becomes prime minister, while any decision to exercise the break clause would need to be communicated to Palantir before the agreement automatically renews.

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