Burnham's first week: digital ID scrapped, Palantir out of the NHS and a UK-first line on AI

Andy Burnham has been Prime Minister for two days and the technology policy of his government is already recognisably different from the one it replaced. Five decisions taken or confirmed since he entered Downing Street on 20 July will shape the public sector technology market that employs a large share of this country's IT contractors.

Digital ID

The national digital identity scheme is dropped. The programme, projected at £1.8 billion over three years and scheduled to launch in 2029, was the largest single new technology project in the previous administration's plans and had begun to draw specialist contractors into its early design phases. The government says the money and the attention will go to the cost of living instead. For the identity, security and platform specialists who expected the scheme to underpin demand into the next decade, the pipeline has closed before it opened.

Palantir and the NHS

Palantir Technologies will be kept off NHS contract rosters. The company holds the £330 million Federated Data Platform contract, which comes up for renewal in 2027, and the Prime Minister's position follows the one he took as Mayor of Greater Manchester from 2017, where he kept the company out of the region's health data. The practical question for the market is what replaces the platform, and who builds it. A domestic replacement for a national data platform on a 2027 timetable would be one of the largest health technology procurements of the decade.

A UK-first AI strategy

The government's artificial intelligence strategy is to be rewritten around British ownership, data centre sovereignty and the protection of UK jobs from displacement, pivoting away from reliance on American providers. The detail is not yet published. The direction is clear enough to matter to contractors in two ways: public sector AI programmes will favour domestic suppliers and domestic infrastructure, and the specialists who can build on those rather than on the largest US platforms will be in demand.

Social media and VPNs

The government's response to the consultation on online safety requires social media platforms to prevent VPN use among under-16s. The Technology Secretary, Liz Kendall, has said that VPNs have legitimate privacy and security uses and will not be age-gated or banned. The obligation falls on the platforms, which will need to build the detection. It is a niche, but a niche that will hire.

Employer National Insurance

The fifth decision is the one not taken. Burnham criticised the rise in employer National Insurance to 15 per cent while he was in Manchester, and was asked on Newsnight in June whether he would reverse it. He declined to pledge a review. The Chancellor appointed on 20 July, John Healey, has not been asked yet. The contractor bodies preparing their Budget submissions have put the reversal at the top of their lists, and will find out on 28 October whether the new government's criticism of the measure extends to changing it.

Two days is not a record. It is a direction, and for the public sector technology market the direction is towards fewer very large programmes, more domestic supply, and a data platform procurement that nobody had planned for.