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Coronavirus crisis is giving a boost to crony capitalism  


Outsourcing giants like Serco shouldn’t get another penny of public money, says RICHARD BURGON MP

FOR decades now, outsourcing and privatisation have been used across government to drive up private profits while driving down standards.

But perhaps never before have they been so recklessly employed and with such devastating consequences as they have through the coronavirus crisis.

The government’s decision to privatise the test-and-trace operation — outsourcing our most important weapon in the fight against the virus — not only puts lives in danger but undermines our chances of escaping from a severe economic downturn.

If the virus isn’t under control, we’ll be going in and out of lockdowns which will hit the economy hard.

And of all the companies involved in the incompetent management of the test-and-trace system, Serco stands out for all the wrong reasons.

Press reports state that Serco has been contracted to run the contact-tracing programme in a deal initially worth £108 million, but which could be extended up to something totalling over £400m.

In addition, Serco recently confirmed that it also runs 30 per cent of Covid-19 test sites. These were actually outsourced to it by Deloitte, the consultancy giant.

And in another example of the never-ending outsourcing merry-go-round at the heart of our public services, Serco is itself outsourcing its own contact-tracing work to other companies, including Hays travel agents and Concentrix, a US company previously embroiled in a tax-credits scandal.

That a network of private companies is raking in huge sums that should be going into our NHS stinks.

When I challenged Secretary of State for Health Matt Hancock in Parliament last week, he made a revealing admission referring to what should be an NHS test-and-trace system as “the national Serco system.”

Contact tracing is perhaps the most important element of the fight against coronavirus.

Its aim is to find all those potentially at risk because they’ve been in touch with an infected person and then to get them to isolate so that the virus isn’t spreading in our communities.

Yet last week we saw the number of contacts traced hitting a new low — at just 58 per cent. Scientific experts say at least 80 per cent is needed to get the virus under control.

New figures uncovered by Labour show that over the course of the test-and-trace operation, these private companies have failed to contact almost 250,000 people who have been in close proximity with a person who has coronavirus.

Each of these quarter of a million people should have been isolating, but instead was moving around their community with no idea that they were potentially spreading the virus to many others.

No wonder that despite billions being wasted on the system, the government’s own scientific advisers say it is having only a marginal effect.

Yet Serco has told its shareholders to expect a big boost to profits because the government has given it extensions on Test-and-Trace contracts.

This Tory government’s approach to contact tracing isn’t just shambolic — it’s dangerous.

That’s why these outsourcing giants shouldn’t get another penny of public money. It’s clear that they are not delivering what our communities need. They should be booted out of the system with the resources and control added to local councils and public-health teams who will do it properly.

The Independent Sage panel of scientific experts points out that if the government had handed test-and-trace funds directly to local authorities instead of giant corporations, each local health authority could have been given £10m, and each doctor’s surgery £1m towards specialised local contact-tracing efforts.

This outsourcing fiasco is just the latest example of the Tories seeing the state as an instrument for handing over wheelbarrows of cash to huge private companies.

It seems these contracts keep coming, whatever the level of failure or whatever appalling behaviour those companies engage in.

Only last year, Serco was fined almost £23m after being found to have defrauded the Ministry of Justice, falsely charging the government for electronic tags on individuals who were either still in prison, had left the country, or were even dead.

It’s outrageous that it is still being awarded more contracts.

My views are clear. There shouldn’t be any private involvement in our healthcare delivery.

But where this currently exists the very least the public could expect is strong oversight.

That’s why I have raised concerns that Serco’s former head of public affairs in the UK and Europe — their chief spin doctor — is now Tory Minister of State for Health – Edward Argar MP.

When I questioned Hancock in Parliament about a perceived conflict of interest, he accused me of a “negative, derisory and divisive approach.” So much for the idea of parliamentary scrutiny!

Through the coronavirus crisis, the people of Britain are being subjected to the worst and most deadly consequences of rampant crony capitalism.

Inefficiency and incompetence in the face of a national emergency is the price we’re paying for increased profits for a few select private companies favoured by government ministers.

There is a better way forward. Countries like New Zealand are proof that it’s possible to effectively eliminate the virus from a country — but only with a zero-Covid strategy underpinned by a functioning test-and-trace system.

Instead, the hard work being done by all of us — in abiding by changing rules and staying away from our loved ones — is being undermined by the predictable and avoidable failings of big businesses whose motives are profits, not public safety.

Richard Burgon is Labour MP for Leeds East.

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