External Private Contractors: Government Use and Employment

Alex Sobel Excerpts

Wednesday 21st October 2020 Westminster Hall

[Alex Sobel (Leeds North West) (Lab/Co-op)]

I first wish to pay tribute to my hon. Friend the Member for Liverpool, Wavertree (Paula Barker). In the short time she has been here, she has made a great contribution to the House. She has also made a great contribution to our party and to the union movement, where she spent many years on exactly these sorts of issues.

In May, the Prime Minister promised us a world-beating track and trace system. What we have instead is a system in disarray. The NHS Test and Trace system is not run by our national health service. Frankly, it is offensive to link the NHS with the shambles that the Government and the private sector have created. Our track and trace system is provided by Serco, the outsourcing giant responsible for a plethora of well-documented scandals. There was the electronic tagging scandal for which it was fined £23 million by the Serious Fraud Office. There was the extensive cover-up of sexual abuse of vulnerable women at Yarl’s Wood, and there is the ongoing scandal of asylum seekers’ accommodation and the “squalid, unsafe, slum housing”—not my words, but those of the chief executive of the Refugee Council. And Serco won a further £2 billion of contracts from the Home Office last year.

Why do the Government choose to award contracts worth hundreds of millions to run track and trace during a deadly pandemic, in what is literally a life-or-death situation? Why have the Government ignored the recommendations of the Scientific Advisory Group for Emergencies and the BMA? Would it not make more sense for track and trace to be run by local public health experts? My Labour colleagues and I have been asking such questions since the contracts were awarded, but answers have not been forthcoming.

The problems that have since arisen have shown the Serco system for what it is: completely unfit for purpose. By the end of August, after a month of encouraging British people to eat out to help out, and around the time the Government launched their back to work campaign, track and trace was failing to contact more than 30% of those who had been in contact with someone who had tested positive. Only 40% of test results were being returned within 24 hours. Since then we have seen lockdown after lockdown. Both lives and livelihoods have been put at risk because of a Government so wedded to the private sector that they are unwilling to admit their mistakes and give oversight to local health protection teams who, by the way, have reached 97% of close contacts of those testing positive, in contrast to Serco’s 62%.

It is not really a surprise that the system is doing so badly when we consider that staff employed by Serco to work on track and trace have spoken of days without contact from supervisors, or without being given any work to do. They are paid the minimum wage while Serco’s profits have surged. Low-paid, badly trained workers are not to blame for the failure of track and trace. The Government’s ideological obsession with outsourcing and subcontracting is. Track and trace has failed, testing is in chaos, and the track and trace app is mired in a multitude of technical issues.

In early February I was forced to self-isolate for two weeks after attending a conference where there was a coronavirus patient. I could not be told by the system at that time whether I had been in contact with that person or not. When I returned here, I asked the Secretary of State for Health and Social Care to introduce a track and trace app. He promised to look at it. Now, more than eight months later, we still do not have a working app.

Months of sacrifice and a Herculean effort on the part of the British people have been given scant regard by the Government. Now we have businesses on the brink and whole industries—tourism, hospitality and the arts, to name but a few—at serious risk of collapse. We are in recession and unemployment is climbing. No one is asking the Government for instant medical solutions to coronavirus, but we need a track and trace system that works to keep the public safe, delivered by local authorities with knowledge of the communities that they serve—not private profiteers, costing both public money and the public’s lives.

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[The Parliamentary Secretary, Cabinet Office (Julia Lopez)]

It is a pleasure to serve under your chairmanship, Mr Pritchard.

I am grateful to the hon. Member for Liverpool, Wavertree (Paula Barker) for securing the debate. The Government are the custodian of public money and it is very important that we retain the confidence of taxpayers about how that money is spent. It is similarly important that we have a robust, highly skilled civil service, with the expertise and capacity to deliver projects and services over the long term and at pace, and that we treat those in the private and public sectors who carry out work for the Government with respect. That is why I welcome not only the way in which the hon. Member has raised issues about external private contractors but the respectful way in which she makes her case.

The civil service has historically used contractors, working alongside civil servants, to provide additional capacity and specialist skills and to manage short-notice urgent requirements. Where it is cost-effective to do so and the requirement is temporary, this makes sense, but let me also be clear that we are focused on driving down the use of consultants, improving internal civil service capability and driving greater value. We will do this in a variety of ways: revamping our in-house training; looking again at procurement rules, particularly relating to social value; and continuing the work of my predecessor, now the Secretary of State for Digital, Culture, Media and Sport, in dealing with issues about outsourcing raised following the collapse of Carillion.

Consultants are used to provide advice on the strategy, structure, management or operations of an organisation, and where an external perspective may be helpful or even necessary. We also use professional services firms to support the implementation and delivery of services—for example, PwC supported the delivery of the reform programme for Her Majesty’s Courts and Tribunals Service—and we use contingent labour to fill gaps in business-as-usual or service delivery activities. It is also right to say that the civil service itself has grown in number over recent years, partly because of the EU exit operations but also because of covid. We have recruited an extra 6,000 civil servants in the Home Office, for instance, to tackle security, counter-terrorism, crime and policing issues.

I will now address some of the points made by the hon. Member for Liverpool, Wavertree. I met the leaders of the three civil service unions yesterday. I have not been in post for long, so it was simply an introductory meeting, but I know that some of those unions also represent workers within private sector contracting companies, and I will be very happy to look into some of the issues that she raised today about outsourced workers and their pay and conditions, particularly as regards sick pay.

Other Members have also raised issues about working conditions during the pandemic and it is important to say that not everybody can work over Zoom. In many ways, it is a privilege to be able to do so and not to have to go into an office. On the other hand, I am also aware many workers’ office jobs are not easily conducted at home, and it is important for the Government, as an employer, to provide safe work spaces, so that we can take into account those who are in shared or cramped accommodation.

The hon. Member for Liverpool, Wavertree also talked about delivering social value through contracts, and we quite agree. We recently took a new look at social value, considering how we take into account environmental factors in how contracts are delivered, whether a contractor is improving the skills of their workforce or their approach to apprenticeships, and so on. We will look at social value in quite a comprehensive way, because once the EU transition period has ended, we will be in a position to come up with a new procurement strategy. Indeed, we are working very hard to draw that up. She raised a number of issues about how we extract value from existing Government contracts, and I will take those away to consider them.

The hon. Member for Birkenhead (Mick Whitley) made a number of important points, but it is important that we recognise that we could not have responded to some of the challenges of the pandemic without expertise from both the public sector and the private sector. Again, I assure him that social value is at the heart of the new procurement strategy that we are drawing up, particularly on issues such as climate change and waste.

The hon. Member for Leeds North West (Alex Sobel) raised a number of important issues about track and trace. We all want this system to work. Let us not pretend that it has been perfect from the outset, but a lot of things have been done to improve that service and we are now conducting hundreds of thousands of tests daily. We hope to be on track to deliver—I do not want to get the number wrong, but there is certainly a much increased capacity when it comes to testing and we have ironed out some of the problems that we saw around September with demand on the system.

It is also important that we understand that this process is a partnership between national and local, and between public and private, and I think that it is naive to suggest that the public sector alone could have built up this service so quickly and delivered it at such a great pace. We appreciate the expertise that we have received from the private sector.

[Alex Sobel]

Local authorities can furlough staff, so many local authority staff who could not do their normal jobs were still employed by the local authority. There was capacity in local authorities to deliver this programme. Should that capacity not have been taken up and used before going to the private sector?

[Julia Lopez]

It is important to understand that the private sector has provided the framework for the system, with local authorities able to plug into that framework. The private sector provides the national call centres and so on, but a lot of the local expertise is provided at local level from healthcare experts on the ground, particularly in some of those harder-to-reach instances where we need to go knocking on people’s doors. Ultimately, we share the hon. Gentleman’s aim to improve the service and build plenty of public confidence in it because it is such a key tool in dealing with the pandemic.

The hon. Member for Stockport (Navendu Mishra) is a PCS union member, and I met his leader yesterday. It is important to remember that successive Governments of all colours use outsourcers. In a previous life, I was a councillor in Tower Hamlets. There were a number of outsourced contracts there and not very impressive in-house management of them, I should say. Outsourcers can provide a lot of expertise and capacity and it is naive to suggest that the public sector alone has all that capacity and expertise in house. Let us not do down some of the people who work for those contractors and bring a lot of capacity and sense to the system.

Both the hon. Member for Liverpool, Riverside (Kim Johnson) and the hon. Member for Leicester East (Claudia Webbe) seem to take an ideological view that effectively says private bad, public good. That is a great shame because it fails to acknowledge what the private sector can provide for public good.