Microsoft stands accused of having 'ripped off the NHS' during a parliamentary hearing where MPs demanded a significant shift in the government's multi-billion-pound computing budget from US tech giants to British companies.
Allegations of Overcharging and Vendor Lock-In
The sharp criticism was levelled by Samantha Niblett, a Labour member of the House of Commons select committee on science, innovation and technology. During a session on Wednesday questioning Ian Murray, the minister for digital government and data, Niblett stated unequivocally: "I know for a fact how Microsoft have ripped off the NHS."
Niblett, who has a background in the data and technology sector, pointed to the scale of the government's dealings with the Seattle-based firm. This includes a five-year deal with the NHS to provide productivity tools reportedly valued at over £700 million. Furthermore, in the 2024-25 financial year alone, the wider government spent a staggering £1.9 billion on Microsoft software licences.
She described a pattern of behaviour where the public sector gets locked into long-term contracts. "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," Niblett told the committee.
Broader Concerns Over UK Tech Sovereignty
This allegation emerges amidst a series of high-profile partnerships between the UK government and other US technology firms, including memorandums of understanding with OpenAI, the creator of ChatGPT, Anthropic, and Google. MPs on the committee expressed a pressing need for the UK to develop greater "sovereign" technology capacity and to award more contracts to smaller, domestic providers to avoid over-reliance on a handful of foreign corporations.
To illustrate her point about poor value and lock-in, Niblett provided a specific example. She claimed that Defra (the Department for Environment, Food and Rural Affairs) had recently signed a contract renewal for the now-outdated Windows 10. This decision has allegedly forced the department to pay extra for security checks because it is using an obsolete operating system.
"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," she added.
Government Acknowledges Fragmentation and Value Concerns
In response, Minister Ian Murray acknowledged it was a "good question" but did not directly address the claim that Microsoft had overcharged the NHS. He stated that the Department for Science, Innovation and Technology (DSIT) is working to coordinate digital strategy and procurement across government departments.
This sentiment was reinforced by Emily Middleton, the director general for digital centre design at DSIT, who was also giving evidence. She highlighted the severe fragmentation in public sector technology spending, which totals £21 billion annually.
"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."
The debate widened as Emily Darlington, the Labour MP for Milton Keynes Central, questioned why the UK relies on US companies like Palantir—which holds a £330 million contract to provide a data platform for the NHS—over home-grown alternatives.
"We know that we are the second most cyber-targeted country in the world," Darlington 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."
Concluding the session, Murray affirmed the need to build greater domestic capabilities and avoid situations where "you’re stuck with Microsoft all the way through." He conceded that "There’s more to be done in terms of procurement" and "making sure the smaller companies are not locked out of the process."
