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?