Misleading claims about Serco’s role in Test and Trace resurface

“...if £37 billion can be found to pay Serco for a failed track and trace system, the money must be available to pay NHS staff properly.”

Since its launch in May 2020, the NHS Test and Trace scheme has been repeatedly described in misleading ways. 

Despite our efforts to point this out, a number of politicians and public figures have continued to make incorrect claims about the system.

On Tuesday, former Labour leader and independent MP Jeremy Corbyn claimed in parliament that £37 billion was found to pay Serco for a “failed track and trace system.”

Today the Labour Party issued a press release quoting Rachel Reeves MP criticising the “Government’s outsourced, Serco-led Test and Trace system.”

A tweet from the head of the Communications Workers Union (CWU) suggesting £37 billion is being spent on the “failed app” has been shared thousands of times. 

All of these statements are, to some extent, flawed. 

The vast majority of NHS Test and Trace is testing

NHS Test and Trace, as the name suggests, encompasses the efforts first to test people for coronavirus, and then conduct contact tracing on those infected to identify new cases and help reduce the spread of the disease.

Yet a focus on contact tracing means the testing element is often forgotten, despite the fact that it accounts for the vast majority of the programme’s costs. 

The National Audit Office (NAO), which is responsible for scrutinising public spending wrote of Test and Trace in December 2020: “Of the £15 billion of funding confirmed before the November Spending Review, around £12.8 billion (85%) is assigned to testing and £1.3 billion to tracing.”The NAO added that an additional £7 billion allocated in the November Spending Review, was largely for mass testing, formerly referred to as ‘Operation Moonshot’.

Test and Trace has involved many different private and public contractors. As of the end of October, the NAO found the government had signed contracts worth £7 billion, of which £6.2 billion was for testing. 

As for Serco’s involvement specifically, the NAO found that, by the end of October 2020, it had signed contracts for services associated with Test and Trace valued at £277 million, for contact tracing and managing some testing centres. At that point, the total spend on Test and Trace was £4 billion.

This means claims from Mr Corbyn that £37 billion is being found to pay Serco, or from Ms Reeves that Test and Trace is “Serco-led” are misleading.

This is not to say whether Serco’s contract represents good or bad value. Just that it is misleading to equate the entirety of the test and trace budget or spend with Serco’s contracts. 

The suggestion from Dave Ward, head of the CWU, that £37 billion is being spent on an app is even further from the truth than Mr Corbyn’s statement to parliament. 

The cost of developing the NHS Test and Trace app is uncertain, but estimates are in the tens of millions, rather than billions of pounds. 

In September 2020 UK government officials told the Public Accounts Committee that the first phase of development for a tracing app for England and Wales cost around £11 million and that the second phase of app development and running costs for the first year would come to a further £25 million.

The NAO estimated that as of October 2020 the spend was around £43 million.

The app is used in contact tracing but is by no means the only part of the contact tracing effort.

Serco’s role in contact tracing

Much discussion around Serco’s role in Test and Trace has focused on its involvement in contact tracing, though it’s far from the only organisation involved. 

People who test positive for Covid-19 in England are contacted by a specialist from NHS Professionals, a staffbank of temporary workers.

Cases potentially linked to an outbreak are then referred to Public Health England (PHE) teams.

Cases not linked to an outbreak, are interviewed by an NHS Professionals specialist to establish, among other things, their recent close contacts, and then those close contacts are advised to self-isolate by national call-handlers from private firms Serco and Sitel. 

You can read more about how contact tracing is organised here.

Between August and December 2020, the number of national call-handlers was scaled back considerably.

Additionally, many local authorities have set up their own local tracing schemes to support this tracing of non-complex cases. 

By the end of October 2020, around £478 million was estimated to have been spent on contact tracing by NHS specialists, Serco and other contractors. The NAO also told Full Fact that this amount also included other costs for central staff, and may have included some funding for PHE in its local efforts to trace complex cases, but it was unsure how much. 

Another £464 million was spent on the “contain” operation which, the NAO says “refers to activities to identify local COVID-19 outbreaks and support local responses to the pandemic”.

In a letter to the health and social care select committee, the head of NHS Test and Trace Baroness Dido Harding said that it was expected that “a great proportion of the money” allocated via the “contain” funding would be spent on local contact tracing, but that this would be left to councils to decide.

What this means is that, by October 2020, the spend on predominantly local authority contact tracing efforts was in the same ballpark as the spend on the entire national effort led by NHS professionals and Serco.

These figures also don’t include the amount PHE has spent on contact tracing via its local health protection teams. 

The situation may have changed since October, but this data indicates that Serco did not make up the majority of the contact tracing budget. 

Budget vs cost

Finally, much talk in recent weeks has revolved around the £37 billion earmarked for Test and Trace.

This comprises £22 billion in 2020/21 and a further £15 billion in 2021/22.

However, this should be understood as the budget for Test and Trace, not how much has been spent so far on Test and Trace. 

Again, we don’t have up-to-date figures on this. When the NAO reported on the programme in late 2020, it noted that, as of October 2020, Test and Trace had spent £4 billion despite budgeting to have spent £6 billion.

It noted that the largest underspend was related to laboratories, machines and mass testing.  

Earlier this year, senior health official David Williams told the Public Accounts Committee that the spend to November was £5.7 billion and that it expected that the eventual spend for Test and Trace in 2020/21 would be in the “low 20s, or maybe the very high teens.” He added that testing “continues to be the principal driver of cost.”