ourNHS: Investigation

Serco and Sitel to get more public money despite track-and-trace fiasco

A third of the workforce are to lose their jobs and fewer than half of contacts reached, but outsourcing giants will have contracts renewed.

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Caroline Molloy
11 August 2020
Social distancing sign, London, August 2020
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PA Images

Six thousand workers from the coronavirus contact tracing scheme are to be axed when the current NHS Test and Trace initial contracts expire on 23 August, the Department of Health announced yesterday. But the firms in charge of the outsourced operation, Serco and Sitel, will continue to work on the project, and get public funding for it, beyond this period. Sitel has told staff it has already won a contract extension, openDemocracy has uncovered.

The two outsourcing giants were contracted without public competition for an initial three months’ service from late May, with the contract being awarded just three days before it was due to start. Their operation has run into heavy criticism as it has been found to be contacting less than half of the contacts of people testing positive in recent weeks, and costing over £900 for each person traced.

Experts said this week that a significant improvement in community test-and-trace performance is essential if a second wave of coronavirus is to be avoided when English schools reopen in September.

A Serco spokesperson today confirmed to openDemocracy that the Serco contract to provide NHS Test and Trace will continue beyond 23 August. The spokesperson added that Serco’s profit margins for COVID work were “lower than normal”. Documents sent by Sitel yesterday and seen by openDemocracy also suggested that company’s work would continue. Both firms declined to comment further and directed openDemocracy to the Department of Health and Social Care, who have not yet responded to our questions.

What’s happening on the ground?

The department said yesterday that the 12,000 contact tracers left after 23 August would be “deployed as part of dedicated local Test and Trace teams”.

Today’s press has been full of reports that, as The Sun put it, “COVID test-and-tracers may now knock on people’s doors if they cannot reach them on the phone” and that “NHS Test and Trace will now provide local authorities across England with a dedicated ‘ringfenced team’”.

The Times reported similarly that the remaining 12,000 call-centre workers would now be “deployed regionally to work with councils, in an acknowledgement that the system has not been fighting local outbreaks effectively”.

And the BBC reported that “the top-down, high-tech strategy for contact tracing is making way for what seasoned local public health officials describe as old-fashioned ‘shoe leather epidemiology’ [which] relies on people with local knowledge collecting information by going door-to-door on foot”.

However, openDemocracy understands that the 12,000 remaining workers are not going to be deployed as local, public ‘shoe-leather epidemiologists’ knocking on doors, and that if local councils want such armies they will have to find the money to pay them from elsewhere. The 12,000 workers will continue to work phones directed by the outsourcing giants. They will, it seems, merely get a regional focus for their call targets – which may or may not be the area they actually live in – and a new duty to report failed contact attempts to local authorities. [Editor's update 14/8/20 - openDemocracy has since discovered the 12,000 outsourced call centre tracers will not actually be focused on particular regions as had been widely reported, but will simply continue with the centralised approach - latest story here].

A Sitel insider told openDemocracy that workers had been told there would be a “business update” on 16 August, but “everyone found out about the headcount reduction from The Guardian”. He said he thought the firm would struggle to retool its systems, which randomly allocate cases to workers, to work dramatically differently than at present.

Many of those contacted by the outsourced service are not answering calls from an unrecognised 0300 number, the Local Government Association warned last week, and public health experts were warning back in May that local public control, knowledge and expertise and face-to-face contact were essential to successful contact tracing for infectious diseases – indeed, these were areas in which local councils had extensive experience. This kind of decentralised, public model is that pursued by most other developed countries during the crisis.

What about the money?

Significant questions remain about how much public money will be directed to the outsourced call-centre system, and whether any has been freed up to support local councils now expected to undertake more track-and-tracing locally.

Serco was initially contracted for £108 million for fourteen weeks up from the contract start date up to the 23rd August, with the option to extend for a longer period up to a value of £410 million in total. Sitel had a similar arrangement, with £84.2 million for the initial fourteen week period and £310 million in total if it were extended. The figures were revealed in redacted contracts published at the end of last month. (Some media reports have mentioned a lower figure of £45 million for the Serco tracing contract, but in fact these relate to an entirely different though also COVID-related Serco contract).

Serco’s chief executive, Rupert Soames, last week defended the fact that each contact tracer had so far contacted an average of just 2.4 contacts, but admitted that there were too many staff on the tracing contract. Serco’s contract is an ‘open book’ one, The New York Times reported, meaning its profit margin is based on an agreed percentage (reported to be below 5%) of total costs.

openDemocracy has asked the Department of Health and Social Care to confirm if there is any additional money freed up to fund the council workers as a result of the changes, and if they predict any reduction in the maximum fee to be paid to Serco and Sitel, or any change to their mark-up. At the time of publication the department had not responded.

Anti-privatisation campaigners WeOwnIt have demanded that “not a single penny more” should now go to Serco and Sitel, and that the money should be redirected to local councils, calling for the additional £528 million set aside for the contract extensions beyond 23 August to go to local councils instead.

But Serco has told openDemocracy it will still be providing NHS Track and Trace beyond 23 August, though it refused to say whether the contract extension had actually been signed already. In an internal document seen by openDemocracy, Sitel told its workers yesterday: “We are pleased to announce that our Sitel contract for test and trace has been extended to include 6000 agents for an additional eight weeks. This means…the majority will be continuing.”

Justin Madders, a shadow health minister, told openDemocracy: “Clearly, they’re not performing. It’s pretty clear that the government has a pile-them-high, sell-them-cheap mentality to all of this. The priority has been to get something up and running very quickly. It’s exactly the same situation as testing – they’re trying to show that they’re making big progress. But we’ve been saying from the start that the test-and-trace scheme should have built on existing local public health, who have a strong track record.”

Questioned by presenter Nick Robinson on BBC Radio 4’s Today programme this morning about whether any money would be redirected, health minister Edward Argar avoided the question.

Argar – himself a former lobbyist for Serco, as Robinson highlighted – did not offer any new money for councils, but referred back to existing levels of support to tackle coronavirus. He did add that the government would “look at” additional funding for particularly hard-hit areas.

The Department of Health and Social Care’s statement yesterday says councils and local public health officials “can use the data provided” by the outsourced service to chase down contacts, if the outsourced service “cannot make contact with a resident within a set period of time”. It adds that “in some pilot areas [this] has involved local authority teams and voluntary partners visiting people at home”.

The reference to “pilot areas” refers to hard-hit northern areas that were forced in desperation to set up their own schemes. "We have always been clear that NHS Test and Trace must be local by default”, the head of NHS Test and Trace, Dido Harding, said yesterday.

openDemocracy put Harding’s comment to Justin Madders and he laughed, saying: “Given that local authorities have been begging for weeks now for more detailed information from the likes of Serco so that they can build up a detailed picture of local outbreaks, it’s pretty clearly that’s completely the opposite of what’s happened!”

But if additional funding is not provided, either from redirecting the outsourcing money or from the Treasury, any army of door knockers and local contact tracers will need to be funded from existing council budgets or recruited from volunteers.

It also emerged today that Serco was first approached by Public Health England to provide COVID-related contact centres on 22 January. Justin Madders asked: “Who instructed officials to make that phone call? Why Serco?” Concerns about the award of contracts without competition during coronavirus have mounted in recent weeks.

Last week Serco reported a 53% rise in half-year trading profits, to £77.8 million. Its revenue grew by 24% to £1.8 billion in the same period. Chief executive Rupert Soames – brother of former Conservative MP Nicholas Soames – said: “Serco’s strategy of focusing on supporting governments around the world in the delivery of public services is working well for us.”

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