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SercoLands Place on£7.5 Billion Government Contractto Provide ‘Employment Services’
After facing criticism for its work during the pandemic, the outsourcing giant is set to be paid millions of pounds more to assist the post-Coronavirus clean-up operation, reports Sam Bright
Outsourcing giant Serco has been appointed to a Government contract arrangement, along with multiple other potential suppliers, worth a total of £7.5 billion, Byline Times can reveal.
The Department for Work and Pensions contract, released in late October, states that suppliers will be expected to provide services that help people to retain and obtain employment. They will be required to “address barriers to employment for a broad range of individuals with differing and potentially very individual needs,” the notice reads. “For instance housing, physical and mental health, drugs and alcohol dependency.”
The document still – presumably accidentally – contains ‘tracked’ comments from officials. Under the scope of work section, a comment from one official made in June states: “This needs to be re-written and drafted to reflect what we can say and what the pipeline looking like [sic] – leaving this to last.” Due to the time elapsed, it is presumed that the document is the final version.
A section without comments describes the environment in which the private sector firms will be required to operate. The Coronavirus pandemic has led to reduced working hours and markedly fewer vacancies, the document notes. In the accommodation and food industries, vacancies fell by 41.5% from February to April, compared with the same period last year, it is stated.
The contract is an umbrella-style agreement whereby a shortlist of companies can bid for work in seven regional “lots” and one national lot. The firms can bid for places on all of the regional lots and, if they fulfil the relevant requirements, they will automatically be added onto the national lot.
A total of 28 suppliers have been shortlisted for this scope of work, including Serco. Byline Times spoke to a procurement specialist who pointed out that several of the suppliers – for example, the Cumbria Chamber of Commerce and the Sheffield College – are smaller, local suppliers that would most likely only bid for contracts in their area.
In contrast, Serco – a company with an annual turnover of roughly £3 billion – is likely to bid for most, if not all, of the regional lots, the specialist suggested.
This raises the prospect of Serco potentially earning sizeable new deals from the Government, despite facing strong criticism for its public sector work during the Coronavirus pandemic.
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Indeed, the company has been awarded multiple contracts to run a large part of the Government’s ‘test and trace’ system. Early in the pandemic, it was suggested that Serco’s contact tracing call centre was staffed with customer service employees reportedly offered an hourly wage of £8.72. The company has also been criticised for subcontracting ‘test and trace’ jobs to a panel of 29 subcontractors. In June, ministers confirmed that Serco had subcontracted approximately 9,000 staff out of the total 10,500 required to run the service.
Ultimately, however, the proof is in the pudding, and the contact tracing system has underperformed in many people’s estimations. This week, for example, the system reached the close contacts of 60.5% of those who tested positive for Coronavirus. The UK Government’s Scientific Advisory Group for Emergencies (SAGE) suggested in May that 80% of positive cases and their contacts needed to be reached for the system to work effectively.
As a result, the Labour Party has called for private sector providers – including Serco – to be removed from the system and be replaced by local councils and health teams. But, the Government insists that local administrations are involved in the contact tracing operation, while it has consistently defended the role of Serco.
“Serco is proud to be playing a part in the NHS ‘test and trace’ programme,” a company spokesperson told Byline Times. “The part we play is limited and specific; we are one of two prime contractors responsible for reaching individuals identified by NHS professionals as having been in contact with people who have tested positive, and we are one of the five suppliers managing sites where people go to get tested. Serco was already an approved supplier on the Government’s framework for contact centres, gaining our place on this framework through fair and open competition.”
Serco has been paid billions of pounds to run public services in recent years, with its work ranging across prisons, immigration detention centres and speed cameras. In January 2019, for instance, it was announced that Serco had won the largest ever private sector contract from the Government – worth a whopping £1.9 billion – to manage more than 5,000 properties housing asylum seekers.
The company’s CEO is Rupert Soames, the Eton-educated grandson of Sir Winston Churchill and brother of former Conservative MP Sir Nicholas Soames.
Criticism of this outsourcing agenda has intensified during the COVID-19 crisis. As the spending watchdog, the National Audit Office, reported earlier this week, in the months up to August, the Government awarded £18 billion in private sector contracts – £10.5 billion of deals awarded without competition. Roughly £1.5 billion of these contracts were awarded before the Government’s due diligence procedures were established – the NAO found – while basic conflicts of interest were seemingly ignored.
This has led to a fierce debate over the role of private sector companies in Government work, and whether public services should be run by corporate giants with little accountability to taxpayers.
The irony will not be lost on many that one of these companies, criticised for its role in managing the pandemic, may now win millions or even billions in Government work to deal with its consequences.
“We have been dealing with an unprecedented global pandemic and have rightly called on expertise from across the public and private sector to meet this challenge,” a Government spokesperson said. “We have robust processes in place for spending public money and departments always seek to achieve value for money for the taxpayer.”