The NHS is facing a legal challenge over a deal with Silicon Valley data-mining company Palantir.

The company, founded by Peter Thiel, inked a deal with the NHS early in the pandemic to offer its data mining services for a Covid-19 data store which would help predict need for additional supplies and hospital capacity around the country. Google was subsequently dropped from the data store.

Palantir was awarded the contract on a temporary basis for the sum of £1, but this was extended in December last year and is now worth £23.5m.

OpenDemocracy filed a request for judicial review on Wednesday alleging that NHS England did not consider the impact the new deal would have on patients and the public by performing a new Data Protection Impact Assessment, something the NHS denies.

An NHS spokesman said: “The company is an accredited supplier to the UK public sector, the NHS completed a Data Protection Impact Assessment in April 2020, and an update will be published in due course."

Palantir does not store any of the data which runs through its aggregation and analytical system and the NHS says it anonymises data before it is analysed on Palantir’s platform.

On the same day the lawsuit was filed, The Bureau of Investigative Journalism released emails obtained under freedom of information laws which show Louis Mosely, the head of Palantir's British operations, and NHS officials had been meeting as far back as summer 2019.

It comes as several contracts awarded during the pandemic have been put under a microscope as critics fear rushed deals with companies run by politician's acquaintances may have permanently impacted procurement, leading to less transparency and limiting competition.

Kailash Chand, former Deputy Chair of the British Medical Association and Professor of Health and Wellbeing at Bolton University, said that the contract was a “massive issue” because it may impact the public’s perception of the NHS at a critical time in the pandemic.

Dr Chand said: “As we’ve seen, there is already mistrust amongst ethnic minority communities in terms of racism in the NHS, and the government has been insensitive to their needs.

“The secrecy around what the government is doing with NHS data, working with companies like Palantir, will damage what trust is left amongst ethnic communities, for migrants, and in the NHS family as a whole.

“It makes it difficult for people like me to convince ethnic minority people that this is being done in their best interests. The fear is also that it is part of the government’s agenda in turning healthcare into a profitable business.”

Palantir does not store any of the data which runs through its aggregation and analytical system and the NHS says it anonymises data before it is analysed on Palantir’s platform.

Palantir did not respond to request for comment.