"Microsoft overcharged NHS", say MPs as they slam £700 million deal

Highlights

• Microsoft's five-year NHS contract worth over £700m alongside £1.9bn in annual government software licences questioned in parliament.
• MPs call for greater "sovereign" technology capacity and fairer procurement processes.
• Concerns raised over vendor lock-in tactics that leave government departments paying inflated costs for outdated services.

The allegation emerged during parliamentary questioning on Wednesday when Samantha Niblett, a Labour member of the science and technology select committee, directly challenged the government's spending priorities.

She claimed Microsoft uses aggressive tactics to lock public sector customers into long-term contracts before charging "exponential amounts" once committed.

"Microsoft have ripped off the NHS," Niblett stated, highlighting how the company secures initial deals with attractive pricing, only to trap government departments into expensive, ongoing arrangements.

The row centres on substantial financial commitments. Microsoft holds a five-year deal with the NHS valued at over £700m for productivity tools, while the government spent £1.9bn on Microsoft software licences during 2024-25 alone.

Niblett cited examples of poor purchasing decisions, noting that the Department for Food and Rural Affairs recently renewed a contract for outdated Windows 10 software, subsequently forcing them to pay additional security costs. She questioned whether sufficient scrutiny applied to contracts before departments became locked into single suppliers.

Calls for sovereignty

Government officials acknowledged concerns about fragmentation. Emily Middleton, director general for digital centre design, confirmed the public sector spends approximately £21bn annually on technology through various contracts without achieving proper value for money.

MPs also raised cybersecurity anxieties, noting the UK ranks as the world's second most cyber-targeted nation. Emily Darlington questioned why Britain relied on foreign corporations like Palantir, which holds a £330m NHS contract rather than developing homegrown alternatives.

Minister Ian Murray recognised the problem, saying the government must avoid situations where departments become permanently dependent on single providers. He committed to improving procurement processes and ensuring smaller British companies access government contracts.