POLITICS
17/10/2020 1:59 AM AEDT | Updated 17/10/2020 5:44 AM AEDT

Serco To Rake In Up To £165m In Profit Despite Test And Trace Failures

Company claims boost is "an indication of our customer's satisfaction" but critics of firm's role in pandemic say it is "grim beyond belief".

Outsourcing giant Serco is on course to exceed its expected profits for 2020 after winning a string of government contracts since the Covid-19 pandemic hit. 

The company has told the London Stock Exchange shareholders are in line for a boost, with a consultation on dividend payments under way.

Serco is the leading contractor for the so-called NHS Test and Trace service, whose executive chair is Tory peer Dido Harding and which has repeatedly failed to deliver a reliable service as second wave lockdown measures tighten across the country. 

Nonetheless, the firm expects a trading profit, before any one-off costs, of between £160m and £165m, compared with previous estimates of £135m to £150m.

Full-year revenue is expected to be around £3.9bn – up from £3.7bn previously predicted. 

Serco said it had achieved strong revenue growth in the three months from July, highlighting extensions to contracts to provide test sites and call handlers.

Bosses said this was “an indication of our customer’s [sic] satisfaction with the quality of work we have delivered” as part of the £12bn committed by the government to the system. The contract was worth at least £108m to Serco, whose profits soared 53% in the first six months of the year.

The announcement comes a day after NHS Test and Trace recorded its worst ever week for contact tracing as cases of coronavirus continue to rise.

Labour’s shadow Cabinet Office minister Rachel Reeves said: “This is grim beyond belief. While Serco is raking in the profits, people are paying the price for its failure.

“If the government can’t bear to curb its obsession with pouring money into big companies over our local public health teams, it surely can see that this wasteful approach lacks basic common sense and isn’t reducing the transmission of the virus.

ASSOCIATED PRESS
Executive Chair of NHS Test and Trace, Baroness Dido Harding, left and Health Secretary Matt Hancock 

“It is time to sack Serco and bring in a short circuit breaker, so we can fix test and trace, protect the NHS and get control of the virus.”

It is understood senior government officials have expressed concern that test and trace could become “overwhelmed” if case numbers get too high.

New data showed 62.6% of close contacts of people who tested positive for Covid-19 in England were reached through the system in the week ending October 7.

This was the lowest weekly percentage since test and trace began, and is down from 69.5% the previous week.

For cases handled by local health protection teams, 97.7% of contacts were reached and asked to self-isolate in the week to October 7.

For those handled either online or by call centres, 57.6% of close contacts were reached and asked to self-isolate.

The way the system operates has been the subject of a political storm, with Labour highly critical of the use of outsourcers and calling for Serco to be ditched from the operation.

Serco added in the statement on Friday morning that it had also benefited from contracts in the US, Australia and the Middle East.

Polling, News, Analysis
All the latest from the 2020 presidential election from HuffPost reporters in the US and around the world