Microsoft has “ripped off the NHS”, it was alleged in parliament on Wednesday, as MPs called on ministers to divert more of the government’s multibillion-pound computing budget away from US technology companies and towards British alternatives.
The Seattle-based firm’s UK government contracts include a five-year deal with the NHS to provide productivity tools reportedly worth over £700m, while the wider government spent £1.9bn on Microsoft software licences in the 2024-25 financial year alone.
The allegation against Microsoft was made by Samantha Niblett, a Labour member of the House of Commons select committee on science, innovation and technology, who said during questioning of Ian Murray, the minister for digital government and data: “I know for a fact how Microsoft have ripped off the NHS.”
Niblett, who worked in the data and technology sector before being elected to parliament in 2024, did not provide further evidence, but when the committee chair, Chi Onwurah, voiced surprise at the claim, she said: “Well, it has.”
After describing the government’s multibillion-pound deals with Microsoft, Niblett said it “speaks to the … power of Microsoft to lock in public sector … customers and then sort of entice them with cheap deals, and then you’re locked into a contract and then you’re charged exponential amounts”.
A spokesperson for Microsoft said the NHS buys its services through a national pricing framework negotiated by the UK government, “ensuring both transparency and value for money” and that its partnerships provide “measurable benefits”.
“The UK government chooses to spend its technology budget across a variety of suppliers and Microsoft is privileged to be one of them,” they said.
The claim comes after a series of deals by the government with other US technology companies including memorandums of understanding and partnerships with the maker of ChatGPT, OpenAI, the AI company Anthropic, and Google.
MPs on the select committee said the UK needed to develop greater “sovereign” technology capacity, award more contracts to smaller, local providers, and be less reliant on deals that resulted in government departments becoming locked into services with US firms.
Explaining more about her understanding of Microsoft’s deals with the government, Niblett said: “I have heard that Defra [the Department of Food and Rural Affairs] recently signed a contract renewal for Windows 10, which is now out of date. And that has now resulted in them having to pay more for security checks because they’re using a very, very old version of Windows.
“I just wonder how much scrutiny and attention is given to what seems like a good contract in the first instance, getting locked in with a single provider then ends up essentially ripping off the taxpayer.”
Murray replied to her that it was a “good question”, but did not address the claim that Microsoft had “ripped off the NHS”. He said that the Department for Science, Innovation and Technology (DSIT) was trying to coordinate digital strategy and buying of digital services across the government.
“We know there is real serious fragmentation in the £21bn the public sector spends every year on technology,” added Emily Middleton, the director general for digital centre design at DSIT, who was also giving evidence in the committee’s inquiry into the “digital centre of government”.
“Central government spends about £1bn a year on cloud [computing],” said Middleton. “That’s done through a whole host of different contracts. We know we’re not getting the value for money that we should be.”
Emily Darlington, the Labour MP for Milton Keynes Central, asked Murray why the UK relied on US companies such as Palantir, which has a £330m contract to provide a federated data platform for the NHS, rather than UK companies.
“We know that we are the second most cyber-targeted country in the world,” she said. “Building our UK industry and capability is great for our economy, but also is really important for public confidence and really important for our security.”
Murray said the answer was to build greater capabilities here in the UK and to avoid situations where “you’re stuck with Microsoft all the way through”.
“There’s more to be done in terms of procurement,” he said. “There’s more to be done in terms of making sure the smaller companies are not locked out of the process.”
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