'Cronyism and chaos'
Billions of taxpayer funds wasted as fat cat firms cash in on Covid-19 contracts
Reading time: 5 min
As shadow chancellor Anneliese Dodds gave a major speech today (September 21) at Labour’s Connected online conference, the party published a damning ‘file of failure’ outlining the billions of pounds wasted and mismanaged by the Tory government amid the pandemic.
The file revealed that more than £130m was handed to Randox Laboratories – a firm that has donated to the Tory party – for testing kits. In the end, three-quarters of a million of these tests had to be recalled because they were deemed unsafe by the Department of Health and Social Care.
Meanwhile, at least £150m of a £252m contract for Ayanda Capital was wasted on face masks, as a huge proportion of these masks were deemed unsuitable for frontline NHS staff.
The government has so far handed outsourcing giant Serco and call centre firm Sitel £108m and £83m respectively to run a contact tracing service which has so far failed spectacularly.
Figures from August showed that of the firms’ 10,000 contract tracers, which Serco recruited, trained and managed, they only managed to contact 2.4 people each. Overall, only 56 per cent of people who have been in close contact with someone who has tested positive for the virus were reached by contact tracers managed by Serco and Sitel.
Despite their poor performance, their contracts continue to be renewed.
Endenred was another firm targeted in Labour’s file of failure – the company was handed more than £230m to administer school meal vouchers over the summer, which experienced severe delays, with families reporting they struggled to redeem the vouchers when the scheme was first launched. As UniteLIVE highlighted over the summer, the delays to the school meal vouchers caused serious hardship for many struggling families.
The firm is now being investigated by the National Audit Office (NAO).
Taeg Energy, meanwhile, was handed more than £43m to provide hand sanitiser to the NHS, despite the fact the firm had stopped trading in 2016 and has been listed on Companies House as dormant since 2017.
The biggest waste of taxpayers’ money outlined in Labour’s file of failure was Chancellor Rishi Sunak’s own Jobs Retention Bonus, with an estimated cost of £2.6bn. Sunak announced the Jobs Retention Bonus in his summer economic statement in July. As part of the bonus, employers would be paid £1,000 for every furloughed worker that they retain until at least January.
Even by Sunak’s own admission, this bonus scheme would entail ‘dead weight’ costs, since many of these bonuses would be set to go to businesses which were going to bring staff back to work anyway.
In her speech today (September 21), shadow chancellor Anneliese Dodds said that this “file of failure” was one that “no carefully crafted Instagram story from the Chancellor can hide”.
“Just some examples; £130 million to a Conservative donor for testing kits that were unsafe, £150 million for facemasks that couldn’t be used by NHS staff, over £2.6 billion to be handed over in so-called job retention bonuses, to businesses who were going to bring staff back to work anyway, outsourced contract after outsourced contract which has simply failed to deliver,” she added.
“It doesn’t have to be this way,” she went on to say. “Workers and businesses should expect more, much more from those in power.”
Dodd’s speech comes as a new survey has found that the vast majority of the public wants the test and trace system to be taken out of private hands.
Nearly three-quarters of those polled said they wanted local public health teams, and not firms like Serco and Sitel, running the country’s test and trace programme, while only 14 per cent said they wanted a private company to run it.
Last week, UniteLIVE highlighted further problems with privatised labs running community testing, which has been beset with problems for weeks.
Responding to Labour’s latest revelations of astounding Tory mismanagement and waste of taxpayers’ money, a Unite spokesperson said, “Labour is absolutely right to shine a light on the cost to the country of the Tories’ approach to getting this virus under control. The cronyism and chaos sickens voters.
“The funnelling of masses of public cash the way of their mates while at the same time talking of cuts to benefits to ‘pay’ for this crisis is just the same old Tories. Not acting in the public interest and certainly not up to the job.”
By Hajera Blagg