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Private Firms Handed Almost £200m To Run Test And Trace Will Not Face Financial Penalties If They Fail To Perform

Private Firms Handed Almost £200m To Run Test And Trace Will Not Face Financial Penalties If They Fail To Perform

The contracts exclude the firms from facing financial penalties

3 min read

Two private firms handed almost £200m to run part of the government’s test and trace system will not face any financial penalties if they fail to deliver the services properly.

Sitel and Serco, who were awarded contacts worth £108m and £84m respectively, came under fire in August after it was reported they only contacted 54% of people who had been in contact with an infected person in the 20 worst-hit parts of the UK. 

But according to the Health Service Journal, both contracts include clauses that would protect the firms from any penalty even if they fail targets set by ministers.

Despite including an obligation to deliver a set minimum quality and performance, it adds: “For the avoidance of doubt, service penalties are not applicable.”

And even in the event of what is described as a “critical service level failure” the companies would be offered a “remedial plan” to allow them to continue. 

“The performance review meetings and reports shall be used to identify a Critical Service Failure,” the contract states.

“Any identified issues as a result of a performance meeting, and/or any other avenue, will be reviewed between the parties in the first instance to discuss the issue(s) and agree a remedial plan."

Speaking earlier on Thursday in the Commons, Health Secretary Matt Hancock dodged questions from Labour MP Stella Creasy about the potential financial penalties, saying instead it was the duty of those working on test and trace to ensure it works. 

But in a tweet, Ms Creasy said: “There’s now evidence there are no penalty clauses in the contracts for providing covid19 - no wonder the health secretary refused to answer as suspect he must be ashamed of his handiwork!”

Meanwhile, Pascale Robinson from campaign group We Own It, said the contracts gave the private firms “total impunity”. 

"Since the start of the pandemic, we've seen time and time again that the private sector is ill equipped to deliver. The chaos in testing we're seeing right now is just the latest example of this,” he said. 

"It's staggering that private companies are getting away with such a shambolic system. And now it's clear that they're doing so with total impunity. Once again, with privatisation, we see that it's private companies that take the cash, and the public that takes the hit.

"Enough is enough. It's time for Matt Hancock to face reality. It's time for him to end the farce of outsourcing the pandemic response for huge amounts of money, and give responsibility and funds for testing and contact tracing over to the people who know how to deliver it instead - the NHS and public health protection teams."

The Department of Health and Social Care have been approached for comment.

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