Getty ImagesMillions of pounds have been saved by replacing a Palantir IT system which helps to find homes for Ukrainian refugees with one built by its own experts, a government department has said.
The Homes for Ukraine scheme matched people fleeing the conflict with offers of accommodation - a complex task Palantir initially supported for free but which grew to cost millions.
The Ministry of Housing, Communities and Local Government (MHCLG) said its new system was "more flexible" and could meet "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 set up in in March 2022, less than a month after Russia's full scale invasion.
Through a website, backed by an IT system, those who had a rent-free space in their home or a separate residence could to offer it to refugees.
In order to set this up quickly, then-Conservative government ministers accepted an offer from Palantir to build a system to administrate the scheme, based on its Foundry platform, for free for six months.
In a 2023 blog post, Palantir described the challenge of combining data from multiple government systems containing tens of thousands of visa applications and hundreds of thousands of accommodation offers.
Subsequent 12-month contracts were awarded - one worth £4.5m and another £5.5m, according to a National Audit Office report.
The report notes the Government's chief commercial officer informed Palantir of his concern about the firm's practice of offering a zero- or nominal-cost initial offer to gain a commercial foothold.
This, he argued, was contrary to public procurement principles requiring open competition.
Palantir maintains government guidance suggests running pilots of systems and asking if they can be supplied for free.
The NAO report also said there was a desire to replace the Palantir system.
Dnipropetrovsk Regional State AdministrationThe current phase of the Russian invasion continues to destroy buildings and kill people in UkraineCoco Chan, a senior digital leader of the Homes for Ukraine project, said in a blog a system built on an existing commercial platform had been replaced with one created in-house.
The blog did not name the platform in question, now known to have been Palantir's Foundry tech.
"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 moving a complex live system to an in-house set up, reducing reliance on external suppliers.
That message may be particularly welcome those who have criticised Palantir and its contracts across UK public services - including with the NHS, the Ministry of Defence (MoD), the Financial Conduct Authority and 11 police forces.
Some argue the firm's success is because its tech is badly needed and works well.
But others contend Palantir's involvement with US immigration enforcement and Israel's military, as well as the beliefs of its two most prominent founders, make it an unsuitable partner.
There are also concerns the UK is relying too much on large US tech suppliers.
Terence Eden - who alerted the BBC to the MHCLG blog - said the development of an in-house alternative to Palantir's tech was an important step towards 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.
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Emma Logan, deputy president of BCS, The Chartered Institute for IT, told the BBC there were clear advantages to building some digital services in-house.
But she said "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 tech experts - added that the government should not just consider whether to curb reliance on big tech "but how quickly it is willing to invest in the capability to do so."
Palantir told the BBC its Homes for Ukraine system formed 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 firm also said the change to a new system showed there was no risk of firms being locked into using its own.
The MHCLG said it initially needed a system which could be ready within days but, in seeking a "steadier service", later created an updated platform to meet the programme's longer-term needs and bring down costs.
Its replacement system was operational by September 2025.
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Ukrainian refugeesRefugees and asylum seekersWar in UkraineArtificial intelligence
