Cost Savings from Replacing Palantir System in Refugee Housing
Millions of pounds have been saved by replacing a Palantir IT system that facilitated housing placements for Ukrainian refugees with a platform developed internally by government experts, according to a UK government department.
The Homes for Ukraine scheme, which matches individuals fleeing the conflict with accommodation offers, initially received support from Palantir free of charge. However, as the scheme expanded, the costs associated with Palantir’s involvement grew to millions of pounds.
The Ministry of Housing, Communities and Local Government (MHCLG) stated that its new system is "more flexible" and complies with "high standards" of security.
Palantir said it was proud to have supported the scheme and "stood up a solution in just nine days, which enabled the safe resettlement of more than 157,000 refugees".
Homes for Ukraine was established in March 2022, shortly after Russia launched a full-scale invasion of Ukraine.
Through a dedicated website supported by an IT system, individuals offering rent-free accommodation, either within their homes or separate residences, could register to host refugees.
To expedite the setup, Conservative government ministers at the time accepted Palantir’s offer to build a system to administer the scheme, using its Foundry platform, free for six months.
In a 2023 blog post, Palantir described the challenge of integrating data from multiple government systems, which included tens of thousands of visa applications and hundreds of thousands of accommodation offers.
Following the initial free period, the government awarded two subsequent 12-month contracts to Palantir, valued at £4.5 million and £5.5 million respectively, as reported by the National Audit Office (NAO).
The NAO report highlights that the Government's chief commercial officer expressed concerns about Palantir’s practice of offering zero- or nominal-cost initial contracts to establish a commercial presence, which conflicted with public procurement principles requiring open competition.
Palantir maintains that government guidance encourages running pilot projects and inquiring whether systems can be supplied free of charge.
The NAO report also noted a desire within government to replace the Palantir system.
Coco Chan, a senior digital leader on the Homes for Ukraine project, wrote in a blog that the original system built on a commercial platform was replaced by one developed in-house.
The blog did not specify the platform, but it is now known to have been Palantir’s Foundry technology.
"Longer term, we wanted to replace the platform with a more flexible technology solution, enabling [MHCLG] to save significant support costs, control the system data and code," Chan wrote.
She added its in-house replacement was "already saving MHCLG millions of pounds a year in running costs".
Towards 'Sovereign Technology'
According to Chan, the department set a precedent by migrating a complex live system to an in-house platform, thereby reducing reliance on external suppliers.
This development may be particularly welcomed by critics of Palantir’s contracts across UK public services, including the NHS, Ministry of Defence (MoD), Financial Conduct Authority, and 11 police forces.
Some argue that Palantir’s success stems from the necessity and effectiveness of its technology.
Others express concerns due to Palantir’s involvement with US immigration enforcement, Israel’s military, and the personal beliefs of its two prominent founders, which they consider make it an unsuitable partner.
There are also broader concerns about the UK’s dependence on large US technology suppliers.
Terence Eden, who brought the MHCLG blog to the BBC’s attention, stated that developing an in-house alternative to Palantir’s technology is a significant step towards achieving more "sovereign technology."
"When given suitable resources the Civil Service can often outperform private companies like Palantir," the former government technology advisor said.
Eden added MHCLG had created a "better, easier to use, and cheaper" system.
Emma Logan, deputy president of BCS, The Chartered Institute for IT, told the BBC that building some digital services in-house has clear advantages.
However, she noted that "external specialists can bring experience, specialist skills, and the ability to put large teams in place quickly, which can be particularly important for urgent national programmes."
Rob Miller of Public Digital, a consultancy founded by former government technology experts, added that the government should consider not only reducing reliance on big tech but also how quickly it is willing to invest in the capability to do so.
Palantir told the BBC that its Homes for Ukraine system was part of a "multi-faceted effort to help Ukraine in the face of Russian aggression."
It added this included "the use of our software for military support, demining, investigation into war crimes and provision of pupils with safe access to schools".
The company also stated that the transition to a new system demonstrated there was no risk of firms being locked into using Palantir’s technology exclusively.
The MHCLG explained that it initially required a system that could be deployed within days but subsequently sought a "steadier service" by developing an updated platform to meet the programme’s longer-term requirements and reduce costs.
The replacement system became operational by September 2025.
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