Outsourced and undermined: the COVID-19 windfall for private providers

The private sector has been the winner in the Government’s response to COVID-19 in England – but why, given the growing and predictable litany of mistakes it has made? Peter Blackburn reports

Location: UK
Published: Tuesday 8 September 2020
covid outsourcing

The prime minister has admitted there may be ‘some lessons to be learned’ from his Government’s handling of the coronavirus crisis.

It is perhaps a rare moment of understatement from Boris Johnson. In truth, it is hard to know where to start. But when the inevitable public inquiry takes place, there is one area of deep concern which must not be neglected – the Government’s reliance on the private sector.

New contingency measures have been put in place during the pandemic which circumvent normal tendering processes, and now large parts of the overall response are in the hands of the private sector.

Among the deals which have been struck: DHL, Unipart and Movianto to procure, manage logistics of and store PPE (personal protective equipment); Deloitte to manage the logistics of national drive-in testing centres and super-labs; Serco to run the contact tracing programme; Palantir and Faculty A.I. to build the COVID-19 datastore and Capita to onboard returning health workers in England.

‘Since the passing of the Health and Social Care Act in 2012 the NHS in England has been forced down a route of increased marketisation and privatisation – and the Government has accelerated its aggressive outsourcing to private firms during the COVID-19 pandemic,’ BMA council deputy chair David Wrigley says.

We are seeing outsourcing being carried out with minimal oversight, governance or transparency

Dr Wrigley
jeremy hunt HUNT: 'We focused our preparation on pandemic flu rather than a SARS'

The Westminster Government’s dependence on private firms during the pandemic follows a decade of health system reorganisation and marketisation combined with severe funding cuts to public services and local authorities in England. The result has been weakened and fragmented NHS services and local councils’ public health departments – with the country’s ability to respond to COVID-19 hampered. This environment may have allowed the private sector to flourish during the crisis – but publicly owned facilities, services and staff could have been invested in and utilised rather than, in many cases, feeling ignored.

Many of these issues were problems identified during a simulation exercise carried out in 2016. Exercise Cygnus uncovered crucial gaps in the UK’s ability to plan and prepare for a pandemic at the local and national level. The recommendations from the report on the exercise appear to have been largely overlooked by the Government which meant the UK started out at a significant disadvantage, with inadequate resources and resilience mechanisms. And cost-cutting and austerity can only have exacerbated these problems.

Speaking to The Doctor, in June, the former health secretary and now chair of the Commons health and social care select committee Jeremy Hunt admitted mistakes had been made under his tenure.

He said: ‘The main mistake was that we focused our preparation on pandemic flu rather than a SARS-like virus, all our thinking was geared to the way flu-type viruses behave – that there was no need to increase PPE stocks or testing capacity.’

The background to a reliance on aggressive outsourcing is clear – a health and care system starved of resource and expertise left uncared for. Whether ideology or incompetence underpins these decisions is not totally clear, but the results have been painful.

At the top of the damning list of these painful results are problems with the supply of PPE. During the initial COVID-19 outbreak these issues were well documented with many healthcare workers reporting they were not provided with adequate PPE, leaving them exposed to the virus.

In recent years large parts of the management and logistics of procuring and stockpiling items such as PPE for the NHS in England have been outsourced to a web of private companies.

Although NHS procurement is ultimately the responsibility of NHS Supply Chain Coordination Ltd – a publicly owned company responsible for sourcing, delivery and supply of healthcare products across England and Wales – in reality, most of the management and coordination of procurement for items such as PPE has been outsourced.

DHL has responsibility for finding wholesalers to supply ward-based consumables, including PPE kits. Unipart manages supply chain logistics, overseeing the delivery of PPE, and Clipper Logistics was contracted by the NHS supply chain to deliver PPE. And the PPE stockpile is sub-contracted to Movianto. In addition, there are a growing number of examples of firms with no former appropriate experience or expertise – in one case including a pest control company – being contracted to supply PPE. The contracts awarded by the Ministry of Justice and Department of Health and Social Care are reportedly worth between £25m and £120m. It is a web of structures which could hardly be more complex.

In May, amid concerns around supply of PPE across the NHS, the Westminster Government appointed Deloitte to develop a new procurement plan to boost the production of PPE and source stocks from the UK and abroad. While, separately, trusts were told by NHS England that a new data collection process was being rolled out nationally to establish an equitable distribution of PPE. This information pertaining to stock levels is being gathered by US data mining company Palantir.

The result of all this complexity? Unsurprisingly it is fragmentation, bureaucracy and uncertainty where the healthcare workers putting their lives on the line desperately needed simple structures and effective outputs. Even after the decision was made to give Deloitte responsibility for leading on boosting stocks, there were ongoing concerns with delays in PPE supplies and how well this new procurement system has been managed, with some UK manufacturers pointing out that offers to help provide PPE were not responded to – the BMA alone was contacted by 70 companies willing to supply PPE but unable to communicate with the Government.

Home testing failings

Delays with PPE have further highlighted issues around the level of oversight and governance of these processes in Whitehall. Delegating large parts of the management of procurement processes and supply chains to a complex web of external companies has left the Westminster Government less able to respond in an agile and rapid way to the dramatic increase in demand for PPE caused by the pandemic.

It is not only in the supply and management of PPE that the Government appears to have almost entirely relied on the private sector, with the approach to the building up of testing capacity following the same trend.

A contract of undisclosed value was secured by Deloitte, one of the ‘Big Four’ consultancy firms, to set up and manage a network of 50 off-site testing centres in England and Scotland. The firm has been responsible for managing logistics across these sites as well as booking tests, sending samples to laboratories and communicating test results.

Fitting with the general theme of complexity, Deloitte then nominated Serco, Sodexo, Mitie, G4S and Boots to staff and manage operations at the testing sites. Those unable to access the testing sites were advised to request home testing kits produced and processed by diagnostics company Randox (in a contract worth £133m) and dispatched by Amazon.

England has been forced down a route of increased marketisation and privatisation

Dr Wrigley

In July it emerged that the swabs in some batches of these home testing kits were not up to standard and, embarrassingly for the Government and health secretary Matt Hancock, had to be withdrawn.

And last month The Guardian revealed that hospitals had asked to take over the running of Deloitte’s testing centre at Chessington World of Adventures, in Surrey, after failings led to the test results of NHS staff being lost or sent to the wrong person.

At the same time a network of Lighthouse Laboratories was developed through a partnership with the DHSC, Medicines Discovery Catapult, UK Biocentre and the University of Glasgow. Deloitte was handed further responsibility for coordinating these labs, located in Milton Keynes, Glasgow, Cheshire and Cambridge and the centres were built over several weeks to cope with testing on a mass scale, processing 75,000 tests of the Government’s 100,000 target.

The moves were met with great concern from clinical staff working in and around the NHS – with a growing sense that a parallel system bypassing the existing network of NHS labs was being built, encouraging competition for supplies and effectively reducing the capacity of the established labs. A former director at the World Health Organization, Anthony Costello, said the 44 NHS labs were left ‘under used’ and major centres such as the Francis Crick Institute and Oxford University were ignored when offering expertise and resources.

Mistakes repeated

jo martin MARTIN: 'Important data is accessible'

Speaking in July Allan Wilson, president of the Institute of Biomedical Science, said the Government was repeatedly making the same mistakes but seemed ‘determined to continue using the same model’ and that the NHS should be given a chance to bid for contracts.

Outsourcing the coordination of testing appears to have resulted in significant adverse effects. The Lighthouse laboratories were reportedly taking three days from the time they received the samples to process the results and national leaders in pathology have indicated that this delay limits the usefulness of test results in understanding the spread of the virus to inform national policy, and has left NHS staff, who have reportedly waited up to seven days to receive their results, unaware of their COVID status. Conversely, local NHS laboratories were able to determine the results in just six hours.

The concerns have been held for some time. At the start of July Jo Martin, president of the Royal College of Pathologists, said: ‘It is really important that the data is easily accessible by those who need to be able to deal with infection in both primary and secondary care, but also those who need to trace related infection. I would like to see very close collaboration between any new endeavours and existing providers of pathology services to the NHS.’

And in June doctors and public health leaders told The Doctor they face difficulties in delays of test results, a significant lack of data availability and regular communication failures between Serco, Public Health England nationally and local teams.

There is no ability to scrutinise these deals and taxpayer money is haemorrhaging from the treasury

Dr Wrigley

Delays in delivering test results have been compounded by reports of lost test samples, leaking test vials and incorrectly labelled samples at testing sites and laboratories. And the BMA believes standards vary greatly between the Lighthouse labs, with reports that labs have been disposing large proportions of batches of tests and others not being fully utilised, with dozens of shifts cancelled as a result of a lack of test samples.

Further problems encountered with IT systems and data protection also meant that during the first two months of lockdown, GPs and local authorities were unable to receive timely, detailed information on tests conducted in privately-run sites, despite the commitment in ‘pillar two’ of the Government’s testing programme to link data with patient medical records. The Deloitte contract does not oblige the company to share detailed data with PHE or local authorities. It is a basic failure which, according to many, contributed to an extended lockdown in Leicester.

The procurement of logistical and IT support for the test and trace strategy has been a hugely problematic area – with serious issues involving the use of the private sector, too. Serco and Sitel were awarded contracts valued at £108m to support the Government’s test and trace strategy – recruiting 25,000 contact tracers to work in remote call centres – but Serco accidentally shared the email addresses of 296 contact tracers and there have been warnings that call handlers were inadequately trained.

In the first week of COVID tracking in England, government figures suggested that approximately one third of positive cases transferred into the system were not contacted by call handlers, leaving patients potentially unaware of their illness. Meanwhile, contact tracers were left with minimal or no work for several days, waiting to be allocated cases that did not arrive.

Money wasted

Given the mounting – and expensive – evidence, a BMA report into outsourcing during the pandemic draws some serious, but seemingly quite clear, conclusions. It suggests that public resources are being wasted on unnecessary private outsourcing, that outsourcing is being used to fill gaps created by underinvestment and that decisions to outsource have caused fragmentation of services, disabling a coordinated response.

On top of that there are huge, and legitimate, concerns with transparency and the robustness of procurement processes. The contracts awarded to private providers under special pandemic powers bypass normal tendering processes. The contracts that cover testing centres, laboratories, PPE procurement and staff recruitment are agreed without competition or public scrutiny making it difficult to demonstrate value for money. Emergency procurement is said to have enabled a rapid response to the crisis but has reduced transparency around the contracts signed with private firms. This was also the case with the Nightingale Hospitals, where it is still unclear how the sites were procured. The hospitals have cost up to £350m for three months but treated fewer than 100 patients.

Better prepared

There has been an absolute litany of problems – and there are a host of lessons to be learned and safeguards required to protect the NHS and the public in future, whether in further waves of this pandemic or in preparation for another.

Ultimately, the BMA has consistently called for a publicly funded, publicly provided and publicly accountable NHS. The best chance of a speedy and comprehensive response to a pandemic is a properly resourced health and care system. And, the result of an over-reliance on outsourcing carries a risk of removing crucial elements of major incident management – such as the ability to command and control. Successful major incident management depends on the capacity to adapt any and all responses rapidly with complete agility, a situation that may be limited when private companies are contracted.

Beyond that, the BMA report calls for any public inquiry into the Government’s handling of the coronavirus outbreak to scrutinise the role of outsourcing.

The health service must be protected and returned to being a publicly funded system

Dr Wrigley
david wrigley WRIGLEY: 'We should be empowering our NHS'

The evidence of the need for this seems incontrovertible. In August virologists across the UK wrote a letter criticising the UK’s handling of the testing strategy and with detractors and failures mounting handing out further contracts and taxpayer money to private firms could result in yet more concerning consequences. And moving forward the Government must be more transparent about the private sector outsourcing that has taken place during the pandemic – with details of contractual arrangements with private companies published. The Government should, the BMA asserts, also pursue a much more robust governance system under NHS control that has oversight of the management and coordination of procurement in England or at a UK-wide level.

Dr Wrigley says: ‘The BMA has been lobbying against this dogged policy in England of outsourcing for many years but the current level and nature of the contracts being handed to these corporations is becoming increasingly concerning. We are seeing this outsourcing being carried out with minimal oversight, governance or transparency. There is no ability to scrutinise these deals and taxpayer money is haemorrhaging from the treasury while a health and care system in desperate need of investment and resource is ignored.

 ‘Urgent action is required to protect the NHS and ensure taxpayer money is being spent in a responsible manner. In the long term the health service must be protected and returned to being a genuinely publicly funded, publicly provided and publicly accountable system.

‘That must include a substantial year-on-year real-terms increase in funding for the NHS, local public health departments and a genuinely reformed and properly financially supported social care system.’

Dr Wrigley adds: ‘We should be empowering and expanding our NHS to undertake additional health related work and not continually running to the private sector who have shown time and time again that they are not able to undertake and fulfil contracts to a satisfactory level.’ 

BMA recommendations on private provider use

 

A BMA paper outlining the Government’s use of private providers in its pandemic response sets out the following recommendations:

 

– A publicly funded, publicly provided and publicly accountable NHS

 

– The role of private outsourcing in England to be scrutinised in any future public inquiry on the UK government’s handling of the Covid crisis

 

– A substantial increase in funding for the NHS and local public health departments

 

– Transparency of private contractual agreements

 

– A more robust governance system under NHS control that has oversight of management and coordination of procurement.

 

At the BMA annual representative meeting, taking place online on 15 September, doctors will debate a call for the BMA to ‘seek the return of public funds paid to the for-profit private sector to retain capacity which was under-used during the pandemic’.