Serco awarded new £322m contract despite “damning” test and trace report

Serco has been awarded a new contract by the Department for Health and Social Care worth up to £322m to continue providing test and trace services just days after a report found that the largely privatised scheme is still missing its targets.

The contract will see the company continue to provide operation, administration, cleaning and security services at around 20% of sites in England and Northern Ireland, including a mixture of drive-through, walk-in and mobile testing centres.

Serco currently runs almost a quarter of the testing sites and half the ‘tier 3’ contact tracers who phone the contacts of people who have tested positive. The new contract is a 12-month agreement with an option of a six-month extension.

Commenting on the news announced by the outsourcing giant this morning, Justin Madders said: “We have a new face in charge of the health service but it’s the same old story with the Tories handing out mega contracts to the failing Serco.”

Sajid Javid has been appointed as the new Health Secretary, replacing Matt Hancock who resigned on Saturday after footage emerged of the Conservative minister breaking his own public health restrictions with an aide earlier this year.

The shadow health minister added: “Just days after a damning report into test and trace’s failures, the government confirms it is business as usual by handing out more taxpayers’ money to this ineffective and inefficient company instead of supporting local public health teams to do this work.”

In a report published on Friday, the National Audit Office found that of 691 million quick-result tests distributed to people across England with the aim of helping people return to work, only 14% had been registered.

The watchdog found that NHS test and trace, which has been allocated a budget of £22.2bn, underspent by more than £8bn following a slump in demand for testing in January and February this year during the most recent national lockdown.

It also concluded that despite large sums spent on the system, which has a budget exceeding that of the Department for Transport, it still had “low or variable” compliance with a minority of symptomatic people requesting a test or self-isolating.

But it said the amount of paid time contact centre staff spend speaking to people who should self-isolate remains low, adding: “The utilisation rate for its contact-tracers and other contact centre staff… has generally remained well below the 50% target, peaking at 49% in January 2021 and falling to around 11% in February.”

The progress update on the test and trace service from auditors also reported that, during a surge of coronavirus cases in December last year, only 17% of people received tests results within 24 hours against a target of 90%.

Despite criticism of the use of contractors, the report published last week said test and trace had “spent £372m on agency and contractor staff and £195m on consultancy fees, compared with £52m on permanent and seconded staff”.

Commenting on the report, chair of the public accounts committee Meg Hillier said that it was “deeply disappointing” that the test and trace system was struggling with many of the same problems that were identified earlier this year.

The latest NAO report follows one from the cross-party public accounts committee on test and trace, published in March, which said it is “unclear whether its specific contribution to reducing infection levels… has justified its costs”.

“NHS test and trace needs to get to grips with some fundamental parts of the process, such as its timeliness in reaching contacts for all the tests it provides, people coming forward for tests when they have symptoms, and compliance with self-isolation,” Hillier said.

Labour has repeatedly urged the government to “ditch” its approach to the test and trace system. The party has argued against the reliance on outsourcing in favour of local council and local public health teams conducting tracing.