29 October 2020

This article is by John Lister and originally appeared in The Lowdown

It appears nothing succeeds more than failure. Serco, one of the two corporations with key contracts to deliver the shambolic UK “test and trace” system has picked up another extension to its contract of up to £400m amid devastating new figures on how poorly the service is performing. The failures continue despite employing an army of management consultants on daily rates of up to £7,000: just 15% of test results are being returned within 24 hours, and only 46% of close contacts reached.

And while under-funded NHS trusts face the deadly combination of a second uncontrolled wave of Covid infections with winter pressures, together with financial penalties if they fail to reach performance targets set by NHS England bureaucrats, failing Serco has proudly announced a big increase in profits above its projections for the year, promising that the extra cash will be shared out with investors.

Health Minister Helen Whately has confessed that the contracts for the test and trace service explicitly contained no penalty clauses to deter Serco and call centre operator Sitel from failing to deliver, claiming – falsely – that “Contractual penalties are often unenforceable under English law.”

But even this level of ineptitude in ensuring the public sector secures value for money in its huge spending on the response to Covid 19 is minuscule in comparison to the colossal sums that are unaccounted for in the whole test and trace system, where according to Tussell, which monitors contracts, the government can only account for a third of the £12 billion budget so far.

There are real questions to answer on the actual costs: £12 billion is equivalent to £179 per head of the UK population of 67 million. How could this much have been spent?

To the cost of contracts of up to £400m for Serco and almost the same for Sitel must be added costs of setting up and running the parallel part-private Lighthouse laboratories and NHS labs, and of course procurement of the testing kits themselves. 

We know that there have been false starts on this, with £20m wasted on one consignment of testing kits from China, but we don’t know how much the basic tests are costing as ministers hand out fresh preliminary contracts for a £100 billion “moonshot” project supposedly to deliver 10m tests a day by early 2021.

We also know that hundreds of millions, and quite possibly billions from the £15 billion allocated to purchase PPE have been misspent on contracts awarded without due process to small start-up companies and firms with no relevant expertise, some linked to the Tory Party, or Tory donors. The Good Law Project working with EveryDoctor is mounting a legal challenge to the contracts awarded to three of the biggest beneficiaries – companies specialising in pest control, a confectionery wholesaler and an opaque private fund owned through a tax haven.

In this latest issue of The Lowdown we also question the value for money of NHS England’s secretive deal to secure use of private hospital beds, equipment and staff, as NHS bosses issue a new framework contract for up to £10bn over 4 years.

With the vast majority of the £31.9 billion Covid spending on health services flowing not to the NHS but into various private sector companies, and the National Audit Office review of Covid spending not due until the end of the year, we need to demand our politicians and NHS leaders at national and local level reveal where all this money is going, and what we get for it.

Health workers, already feeling the strain of another Covid surge as winter sets in, need and deserve answers – with action as demanded by Labour to remove incompetent management and contractors, and prosecution of any proven corruption.