Revealed: Serco under fire over fresh £90m COVID-19 contract
Firm in charge of England’s ‘track and trace’ now responsible for supporting vulnerable people during the pandemic. MPs and campaigners say the decision is ‘outrageous’.
Outsourcing giant Serco have been awarded a multimillion-pound contract by the Department for Work and Pensions to provide emergency contact centre services for vulnerable people who are self-isolating during the coronavirus outbreak, an investigation by openDemocracy can reveal.
Serco has been promised an initial fee of £45.8 million but this could rise to as much as £90 million. The government published details of the contract only on 30 April – more than a month after it had awarded the contract and after work had already begun.
The global contracting firm plays a central role in the UK’s pandemic response despite coming under heavy criticism for its work so far.
The contact tracing system - which Serco is leading - launched this week but is not expected to be fully operational until the end of the June. Last week, Labour called for an investigation after it emerged that Serco had accidentally shared the email addresses of hundreds of contract tracers.
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Responding to openDemocracy’s investigation, opposition MPs have demanded that the government explain why Serco has been given another major contract – and this time one that makes the company responsible for giving crucial support to the most vulnerable citizens. Serco itself has declined to comment.
Serco landed the DWP contract for an “emergency capacity contact centre” through an existing framework agreement with the department. It is unclear whether other companies were allowed to bid for the works.
openDemocracy asked the government to clarify the procurement process and the scope of works that Serco is carrying out – but the DWP declined to answer our questions. Instead, the department has insisted we raise a freedom of information request, a lengthy process with no guarantee of an answer.
There are serious questions about Serco
The government has been criticised for handing out COVID-19 contracts worth more than £1 billion to private-sector firms without tenders. British manufacturers accused another company, Deloitte, of being “useless” after the consultancy was charged with procuring personal protective equipment (PPE).
Serco, which sponsored an event at last year’s Conservative Party conference, has also faced heavy criticism for its role in the UK’s pandemic response.
Serco is overseeing the crucial track-and-trace system that has been launched today. But people it has recruited to work as contact tracers have already complained about a lack of training and guidance.
Earlier this month, Serco was condemned after it accidentally shared the contact details of 300 contact tracers. The error has led to calls for an urgent investigation into the “alarming” incident.
Rachel Reeves, the shadow Cabinet Office minister, wrote to Michael Gove, her counterpart in government, that it was “particularly troubling that a company that is being trusted with some of the most sensitive work in our national effort against the virus seems to struggle with the most basic aspects of data privacy”.
The contact-tracing data breach was not the first fiasco in Serco’s contributions to the government’s pandemic response. In April the company was in the news over concerns about delays at the drive-in COVID-19 test centres that it was managing. At one test site, key workers were left waiting for two hours in hot weather, unable to leave their vehicle or even open the windows.
At the beginning of May, the Daily Mirror exposed a company subcontracting for Serco on the National Shielding Helpline that was pressurising workers to abandon social distancing rules. The subcontractor had asked workers to sign waivers clearing it of blame if they became sick.
Serco is a major plank of British government outsourcing. Among other things, it runs six prisons, an immigration removal centre and the sleeper train from London to Scotland.
The FTSE 100-listed firm is no stranger to controversy. In 2018, Serco sparked fury after it emerged that it planned to evict hundreds of asylum seekers from private accommodation in Glasgow without court orders. Last year, the company was fined almost £23million in a settlement with the Serious Fraud Office over claims it had overcharged the government for electronic tagging.
Serco has also received numerous NHS contracts, detailed in a report co-published by the University of Greenwich and We Own It this week. The report’s authors conclude that Serco’s record is “dotted with failures”.
In 2018, the firm was criticised after it emerged that its breast-cancer screening hotline – set up after some 450,000 women did not receive due invitations to attend important screenings – was being run by call handlers with only one hour’s training.
Such difficulties have not hit Serco’s bottom line. The London Stock Exchange-listed contractor posted revenues of £2,836.8 million for the 2018 financial year, and an underlying profit of £93.1 million. Its chief executive officer, Rupert Soames, is brother of former Tory MP Nicholas Soames.
Despite the ongoing shutdown in the UK, Serco has continued to pick up numerous public-sector contracts.
openDemocracy checked the government’s ‘contract finder’ database and found that this month Serco was selected as one of five suppliers to join a framework agreement worth £1.5 billion with the Crown Commercial Service, which works predominantly on behalf of the Ministry of Defence. The company also won new contracts for waste collection and street cleaning.
Last December the Department for Business, Energy and Industrial Strategy awarded a £455,000 contract to Serco to provide “Emergency Response training”. This specified that from February this year, Serco would provide the department with essential training in managing the fallout from “major domestic economic shocks” and crises within the energy, nuclear, chemical postal and space industries.
‘Putting profits first’
The DWP’s decision to award Serco the contract to run contact centres for vulnerable people – and a wider lack of transparency about COVID-19 contracts – has caused concern amongst opposition MPs and campaigners.
Labour’s Helen Hayes MP, shadow minister for the Cabinet Office, called on the government to “publish the full details of all contracts entered into as part of its COVID-19 response.
“Public confidence is critical to the delivery of an effective response to COVID-19,” Hayes told openDemocracy, “but there are serious questions about Serco, in particular after they were fined by the Serious Fraud Office and more recently accidentally exposed the data of 300 newly recruited COVID-19 contact tracers.
“The government has entered into huge numbers of expensive contracts with the private sector without publicly demonstrating they have properly assessed the capacity and competence of these companies to deliver, or properly investigated public-sector alternatives, and without publishing details of the contract scope, payment terms, length or key performance indicators.”
Layla Moran MP, a Liberal Democrat leadership candidate, said: "It is concerning that any firm with previous serious reputational issues would be tasked with supporting vulnerable people at this time. This raises questions about how and why Serco was awarded this contract.
“Openness and transparency from the government is key to maintaining public trust, especially during a national crisis. If the government are contracting out parts of the coronavirus response, then their risk assessments and decision-making processes regarding which company is most suitable should be made public.”
Cat Hobbs, director of campaign group We Own It, said: "Serco is the last company we want supporting vulnerable people in this crisis. It has a long track record of putting profit first and damaging people's lives.
“It's outrageous that this company has been given even more responsibility. Relying on unaccountable outsourcing companies is a bad habit the government needs to drop. Investing in the NHS and direct public service provision is the only way we'll get out of this crisis safely."
Serco declined openDemocracy’s requests for comment.
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