Fusing the NHS: Digital Austerity and Infrastructural Dependence in the Remaking of the British Welfare State

Since the 2000s, governments worldwide have undertaken projects of digitalization of state bureaucracies and welfare states (Collington 2021). In the 2020s, however, those projects have accelerated and extended, driven by the digitalized life during covid-19 pandemic, mounting state budget constraints, and the explosion of AI technology monopolized by US (and Chinese) Big Tech. This paper analyses those dynamics by focusing on the case of UK reforms in the health system between 2020 and 2025 and the growing role of Palantir technologies. Through an analysis of parliamentary debates, policy documents, news sources and expert interviews, we reconstruct the discursive policy frames and policy reforms phases through which Palantir technologies came to restructure the infrastructure of the British health system. Using constructive institutionalist lenses, we argue that the necessity to steer the health service efficiently under the covid-19 emergency (Mirowski 2013), was leveraged to facilitate Palantir’s entry into the NHS. In 2020, during the pandemic crisis, Palantir Foundry platform was indeed contracted - nominally on a free basis - to merge data and improve allocation efficiency of hospital resources. In the post-pandemic context, this temporary role was converted into permanent infrastructural entrenchment. Drawing on the narrative imperative to make the NHS sustainable - in a country marked by ageing population and sluggish economic growth - Palantir secured a £480 million government contract to provide a permanent national platform unifying data across all British health system and offering algorithmic tools. While the government narrated the measure as boosting NHS sustainability through “doing more, with less” - thus rescuing the health service - we argue that this consists in an unprecedented change for the NHS. First, it marks an enormous systemic retrenchment of the health service, as it gets locked-in in Palantir’s platform (Srnicek 2017), thus hollowing out public state capacity long-term (Collington and Mazzuccato 2022). Second, this project seems to involve a ‘digital austerity agenda’ couched in technological solutionism, where NHS funding and staffing problems are handled as an issue of efficiency rather than lack of resources. Moreover, the deployment of algorithms in a sector as delicate as health, risks inserting opaque discriminations within this system. Third, this reform entrenches a severe infrastructural dependence on a US tech company in a critical sector, thus raising concerns for national sovereignty. Finally, there is a risk for Palantir’s NHS involvement to be part of a broader arrangement aimed at the creation of a British defence AI industrial cluster (Schwarz 2025), leveraging British data.