Serco expects profits to soar over Test and Trace contract

Baroness Dido Harding during a media briefing in Downing Street, London, on coronavirus (COVID-19). Photograph: PA/Downing St. - Credit: PA

Bosses of outsourcing giant Serco have indicated they expect their profits to soar in 2020, with the company’s finances exceeding its expectations due to the coronavirus pandemic.

The company said it was an indication of high customer satisfaction, despite it leading the Test and Trace system, which has just recorded its worst ever week.

In a statement to the London Stock Exchange they said the newly-announced figures were “an indication of our customer’s satisfaction with the quality of work we have delivered” as part of the £12 billion committed by the government to the system.

The company added: “We have also seen increases in the number of asylum seekers we are looking after on behalf of the Home Office, and our new Prisoner Escorting contract has been successfully mobilised.

“We have now secured an extension to the Emergency Measures Agreement on the Caledonian Sleepers to the end of the year.”

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

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

The announcement comes a day after Test and Trace recorded its worst ever week for contact tracing as cases of coronavirus continue to rise, and it was revealed consultants were being paid up to £7.500 a day to help fix the system.

Senior government officials have reportedly xpressed 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.

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.

Rachel Reeves, shadow chancellor of the Duchy of Lancaster, said: “

Rachel Reeves, Labour’s shadow chancellor of the Duchy of Lancaster, 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.

“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.”

“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.

“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.”