Microsoft stands accused of "ripping off the NHS" during a parliamentary hearing where MPs demanded the government redirect billions in computing spending from US technology giants to British companies.
Contract Details and Allegations
The Seattle-based technology firm holds significant UK government contracts, including a five-year deal with the NHS to provide productivity tools reportedly valued at over £700 million. More broadly, the government spent an astonishing £1.9 billion on Microsoft software licences during the 2024-25 financial year alone.
The explosive allegation came from Samantha Niblett, a Labour member of the House of Commons select committee on science, innovation and technology. During questioning of Ian Murray, the minister for digital government and data, Niblett stated unequivocally: "I know for a fact how Microsoft have ripped off the NHS."
Lock-in Concerns and Taxpayer Impact
Niblett, who worked in the data and technology sector before her election to parliament in 2024, described what she characterised as Microsoft's strategy of locking in public sector customers. "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," she told the committee.
When committee chair Chi Onwurah expressed surprise at the claim, Niblett stood by her assertion, responding simply: "Well, it has."
The MP provided a specific example to support her concerns, revealing that Defra (the Department for Environment, Food and Rural Affairs) recently signed a contract renewal for Windows 10, despite the operating system being outdated. This decision has reportedly forced the department to pay additional costs for security checks because they're using an obsolete software version.
Broader Government IT Spending Concerns
Emily Middleton, the director general for digital centre design at DSIT, acknowledged serious problems with government technology procurement. She revealed that central government spends approximately £1 billion annually on cloud computing through numerous different contracts, admitting: "We know we're not getting the value for money that we should be."
Middleton highlighted the £21 billion the public sector spends every year on technology, describing "real serious fragmentation" in how these funds are allocated across different departments and services.
The allegations against Microsoft emerge amid growing concern about the UK's reliance on US technology companies. The government has recently signed memorandums of understanding and partnerships with OpenAI (creator of ChatGPT), Anthropic, and Google, prompting calls for greater "sovereign" technology capacity.
Emily Darlington, Labour MP for Milton Keynes Central, questioned why the UK depends on US firms like Palantir, which holds a £330 million contract to provide a federated data platform for the NHS, rather than supporting domestic companies. "We know that we are the second most cyber-targeted country in the world," she noted. "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."
In response, Minister Murray acknowledged 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 ensuring smaller companies aren't "locked out of the process."
The Guardian has approached Microsoft for comment regarding the allegations made during the parliamentary hearing.
