Test and trace programme puts out tenders for contracts worth £12bn

England’s coronavirus test and trace programme has put out tenders for a further £12bn of contracts, highlighting the scale of the undertaking that has drawn strong criticism from lawmakers over how it has used its “staggering” £37bn budget.

The House of Commons public accounts committee on Wednesday strongly criticised the programme, run by Lady Dido Harding, for the way it has already spent an “unimaginable” £23bn of its two-year budget while failing to demonstrate that it has made a “measurable difference” to the spread of the pandemic.

In its report, the committee highlighted an array of flaws in the service established in haste 10 months ago, after a once-in-a-century public health crisis exposed the UK’s lack of infrastructure for identifying and tracking infected people.

But Harding, a Conservative peer, hit back, pointing out that the programme was carrying out more tests “than any other comparable European country”. The latest official data shows that laboratory testing capacity in the UK has soared from around 2,000 tests a day in the early days of the pandemic to around 750,000 in March.

The programme continues to ramp up. In the past week alone, the government has released two tenders: an £8bn contract to supply rapid testing kits using so-called lateral flow devices, along with bids for £4bn of testing “consumables”, such as lab equipment and chemicals, over the coming year.

Adam Briggs, a senior policy fellow at the Health Foundation charity who has studied the programme since its inception, said the testing capability that is now in place “should not be belittled. It’s remarkable that we now regularly test over 5 per cent of the population per week for a disease we hadn’t even heard of a little over a year ago”.

However, even some people working on the programme privately concede that money was wasted in a host of areas. Some of it was unavoidable, caused by rising prices due to global competition for scarce supplies and the need to spread bets across different testing technologies. But others, they suggested, were the clear result of policy choices.

Harding has regularly come under fire over her heavy reliance on consultants and outsourcing companies as she established the programme. Companies, including Deloitte, Sodexo, G4S, Randox, Serco and Sitel, have been involved in everything from setting up and managing parts of the operation to manufacturing and delivering testing kit.

“Much of this vast spend on consultants — 2,500 at up to £6,600 a day as late as February — was wasted because government policy was too volatile and civil servants too thinly spread to be able to get usable deliverables from the grey-suited army we were all paying for,” said Jolyon Maugham QC, who as director of the Good Law Project, has successfully challenged the government over its approach to procurement in court.

The programme has also been criticised for being too centralised and only belatedly recognising the key role to be played by local authorities in understanding and controlling outbreaks on the ground.

For months, the weekly publication of performance data from the programme told a story of relentless underperformance. In October, it hit a new low with only 15 per cent of people receiving their test results within 24 hours and less than 60 per cent of infected people’s contacts being reached.

Things have slowly improved: the latest data shows that more than 88 per cent of in-person tests were back within 24 hours, and almost 91 per cent of close contacts of infected people reached.

An official working at the test and trace programme insisted the use of private consultants was necessary and justified to launch the new service at speed but acknowledged it has been slow to stand down and replace them.

But the decision to run contact tracing at national level, bypassing established local public health structures, was “doubly bad as it was expensive and ineffective”, the official said.

A Financial Times analysis of publicly-available expenditure data shows the programme’s budget is divided into two chunks: £22bn for the financial year to 5 April 2021 and £15bn for 2021-22.

Close to 90 per cent of the funding is being funnelled into the testing side. Almost £6bn has been spent on labs and machines and another £2bn on lab-based “gold standard” PCR swab tests and about £3bn on rapid testing kits, mainly lateral flow test technology.

In contrast, contact tracing has been allocated just over 8 per cent of this year’s £22bn budget, or £1.3bn. Not all the funding allocations can be accounted for in the public records and while £720m was set aside for call centre handling contracts with Serco and Sitel, the latest information to end of October shows expenditure stood at £478m.

The number of staff assigned centrally to contact tracing has been significantly scaled back from its levels in May and June. Expert modelling had initially suggested that each positive case would have up to 30 contacts who needed to be traced.

In reality, the way people interacted during the pandemic means that on average just two or three contacts needed to be found, which left the programme with considerable overcapacity.

But as the government increases its investment in testing infrastructure and technologies, some have questioned whether other elements of the programme have been overlooked.

One person familiar with the programme said officials had viewed the primary goal as securing sufficient testing capacity, when the core challenge should have been framed as behavioural: persuading infected people to stay at home.

“To have the greatest impact this should be an isolation strategy rather than a test and trace strategy. Enabling people to isolate if they are infected, or have a high risk of being infected, is essential to gaining the most out of the investment,” said Graham Medley, a member of the government Scientific Advisory Group for Emergencies.

The government has belatedly acknowledged this. The size of a discretionary fund that local authorities can use to boost isolation payments has risen fivefold in recent weeks to £20ma month, alongside an expansion of support intended to ensure people who are isolating can secure medicines and food.

The aim of the programme has also quietly shifted over the past year. The business case made in September to justify an initial round of £15bn in funding claimed that the programme would prevent future lockdowns. Two protracted national lockdowns later, the programme has set out a more nuanced mission statement: reducing transmission rates.

Here Harding and her team have had success so far. The two most concerning new variants — the South African and Brazilian strains — appear to be under control.

But some scientists see this as a reflection of the UK’s established, world-leading genomic sequencing capability, which has allowed mutations to be identified, rather than due to the test and trace programme itself. Funding for genetic sequencing falls within its budget, however. 

Other health experts believe the UK should have paid more attention to what other countries are doing.

Jay Patel, a global health researcher at Edinburgh University who has been conducting an international comparison of test, trace and isolate programmes, is clear about the advantages of the kind of grassroots approach that England initially ignored. “Contact tracing is all about trust and that can’t be achieved over a telephone call from a call centre,” he said.

Canada for example, has distributed $4.28bn to its provinces and territories, to help them run their own test and trace initiatives.

In Germany, all contact tracing has been organised, expanded and run at a local level, and local authorities are reimbursed by state government later, Sibylle Gaisser, professor of biotechnology at the Ansbach University of Applied Sciences explained.

A more centralised approach is not the only way in which England’s response is distinguished from that of other countries; another point of difference is the huge emphasis it has placed on lateral flow tests, despite continuing concerns over their accuracy.

The number of lateral flow tests taken each week overtook the number of PCR tests in late January. The government has spent about £3bn so far procuring hundreds of millions of these tests which have been rolled out at care homes, hospitals, schools, local authorities and businesses across the UK.

A further £6.2bn of the programme’s budget has been allocated to testing in the current financial year that run to April 5, most of which is earmarked for the lateral flow kits, according to programme officials.

Insiders acknowledge that, as infections fall, the programme’s problem now is one of superfluity rather than scarcity — an extraordinary turnround from the position just a year ago and one which poses its own dilemmas.

It is far from clear that the entire £37bn budget will eventually be needed. “Everyone can see that the scenario going forward is we’ve actually procured too much capacity,” one test and trace official said. “The decisions being taken now are really around what do we switch off and when.”