Coventry Council renews Palantir AI deal despite mounting criticism
And it’ll cost 50% more this time round
Coventry City Council has renewed a contract with US data analytics firm Palantir Technologies for a second year, despite opposition from councillors, trade unions and campaigners.
Documents obtained under the Freedom of Information Act show the Labour-run authority signed a new one-year agreement in February 2026, extending what had initially been a 12-month pilot scheme.
The original deal, agreed in February 2025 and signed in September, saw the council pay £500,000 for the development of a "strategic AI platform" designed to reduce administrative workloads.
The renewed contract will cost £750,000.
Council officials say the software has already demonstrated "material potential" to improve efficiency, particularly in children's services, where it has been used to transcribe and summarise case notes for social workers.
A spokesperson told The Nerve the system could "free up social workers and professionals to spend more time supporting Coventry residents".
They added that the agreement was deliberately structured with annual decision points to review performance and value.
The council said its latest assessment considered four key areas, including financial impact, governance, strategic alignment with AI policy, and public confidence.
However, critics argue the rising cost and ethical concerns surrounding Palantir outweigh any operational benefits.
MP: Renewed deal is ‘a betrayal’ of Coventry residents
Zarah Sultana, the MP for Coventry South, described the renewal as "a betrayal of every resident in this city".
She accused the company of playing a role in controversial US immigration enforcement policies and alleged links to military operations abroad.
"This is a company that has helped ICE [US Immigrations and Customs Enforcement] tear migrant families apart, generates kill lists for the Israeli military and is quietly embedding itself across our public institutions – including the NHS and Ministry of Defence. And our Labour-run council has chosen to hand them more public money."
Local councillor Grace Lewis of the Green and Independent Alliance said she was "deeply concerned" about the implications of the deal, warning that it raised questions about "who controls our data, our services, and ultimately the direction of our public institutions."
Labour MP Clive Lewis also criticised the move, saying outsourcing decision-making tools in children's services risked undermining democratic accountability.
"These are decisions that should be made by trained, experienced social workers embedded in their communities - not by an algorithm," he said.
Palantir focuses on potential
Palantir said it was "excited" to continue working with Coventry Council.
The company pointed to the potential for AI to reduce paperwork and improve outcomes for vulnerable children and those with special educational needs.
"The signs so far are extremely promising," a spokesperson said.
The renewed contract comes amid broader scrutiny of Palantir's role in the UK public sector.
The company has secured more than £500m in government work, including a £330m contract with NHS England to build a Federated Data Platform linking health data across services.
That deal has also faced criticism from politicians.
Earlier this month Chi Onwurah, who chairs the Science, Innovation and Technology Select Committee, dismissed Palantir Technologies's suggestion that criticism of its multimillion-pound NHS contract is ideologically driven.
She said the real issues relate to transparency, value for money and data security.
Her remarks followed comments from Palantir's UK executive vice-chair, Louis Mosley, who urged ministers not to yield to what he called ideologically motivated campaigners while officials considered invoking a break clause in the deal.
The contract focuses on building the NHS Federated Data Platform (FDP), an AI-enabled system intended to connect health data across services in England.