The opposition today accused the government of being “in denial” about the “clear failures” of its privatised COVID-19 contact tracing system – just days before ministers must decide whether to renew their contracts with outsourcing giants Serco and SITEL for a second time.

Speaking to openDemocracy, shadow cabinet office minister Helen Hayes said the government was “pouring taxpayer money down the drain” because of its “addiction to outsourcing”.

In Parliament today, Hayes asked: “What justification the government could possibly have for continuing with the failed privatised centralised model of test and trace, in contrast to the effectiveness of local councils and public health teams who are denied the full funding they require?”

openDemocracy revealed in mid-August that SITEL had told its staff that its contract for test and trace had been extended “for an additional eight weeks” beyond the initial contract period, which ran to 23 August, – that is, to mid-October. SITEL together with Serco were originally contracted to provide national contact tracing for a total of £192 million for three months from May, with the potential for this sum to rise to over £720 million in total if the contracts were extended for a maximum of two years, though details of the renewal periods were not published in the partially redacted contracts.

Contact tracers on social media have since confirmed that they have been told to expect further renewals beyond October, with one saying this week: “Serco currently saying T3 [tier 3, or call handlers] contracts expected to be renewed. Renewal will be last minute (again)”. Another account reported that a Serco sub-contractor was advertising vacancies for contact tracers, “Currently to 17 Oct but extension likely.”

Cabinet office minister Julia Lopez told Hayes that “Serco and SITEL are approved suppliers” on the government’s contact centre ‘framework’ contract, and that they gained their places “through fair and open competition” which considered “value for money and capability”.

Asked by Hayes if the government would publish all the renewal dates for the Serco and SITEL contracts, the minister did not answer directly, but said: “If there are other people who would bid well for these contracts then we’re happy to look into that.”

But it is hard to see how other companies could bid for the work when the minister would not confirm how long the government expected to be tied into the current arrangements.

Speaking to openDemocracy after today’s questions, Hayes said: “The government seems to have an addiction to outsourcing. There is no justification for renewing the contracts of poorly performing companies like SITEL and Serco.” Hayes accused ministers of being “in denial about the clear failures” of the privatised model and of being “happy to look the other way while pouring taxpayer money down the drain" because of its “addiction to outsourcing”.

The latest figures show that only 71.3% of those tested were reached in the week beginning 17 September, a decrease from 80.8% the week before.

Contact tracers have told openDemocracy that some staff are currently on two-week rolling contracts, and that morale is low.

Pascale Robinson of campaign group We Own It slammed the government’s approach as an “unmitigated disaster”, saying that its “entire approach to this pandemic has been to siphon off public money to private companies behind closed doors, with no transparency about what these chancers are expected to deliver. The money and power to do contact tracing right from a positive test result needs to go direct to the local public health teams with the experience immediately.”

Richard Horton, editor of The Lancet, said outsourcing test and trace “to private providers who have no interest in strengthening the NHS is nothing less than a reckless endangerment of our communities”.

Politics Home reported last week that Serco had subcontracted some contact tracing work to a debt collection company and a company embroiled in a tax credit scandal. openDemocracy had previously revealed how the giant had also subcontracted travel agents Hays to do the same work, and that experts had slammed as “unethical”, clauses in the contracts that allow the two giants to “effectively rewrite” their own specifications.

The Guardian also reported yesterday that Deloitte, which has a key role in the government’s overall test-and-trace scheme, is also now selling contact tracing services to local government following widespread criticism by local authorities of the national system.

The government promised in June that the test-and-trace system would be fully functional by September or October. In August the government announced it was shifting to ‘local first’ contact tracing. Despite widespread media reports of this change, and the impression given in departmental statements to that effect,no Serco or SITEL worker was in fact given a local focus, Serco and the Department of Health and Social Care admitted to openDemocracy.

openDemocracy has asked the department to confirm details of the contract renewals, whether there has been any subsequent shift to local delivery, and whether the maximum sums payable under the original contract have now been reduced, given the number of contact tracers employed under the scheme was cut by a third in August. At time of publication the department had not responded.