Britain's £37bn test and trace system: did it do any good?

Britain built a system for testing for Covid-19 and tracking down contacts from a standing start – at a cost projected at £37bn. Why so expensive? And did it work? Simon Wilson reports.

Dido Harding
Dido Harding: did she really do such a bad job?
(Image credit: © Matthew Lloyd/Bloomberg via Getty Images)

What has happened?

Last week the House of Commons public-accounts committee – the parliamentary body that acts as a public-spending watchdog – issued a damning report into the government’s £37bn, NHS-branded “test and trace” (T&T) system. The report did accept that the programme, led by Dido Harding, has done an awful lot of testing and tracing. It found that between May 2020 and January 2021, the UK’s daily Covid testing capacity increased from around 100,000 to more than 800,000 tests. During that time, T&T contacted more than 2.5 million people testing positive in England, and advised more than 4.5 million of their associated contacts to self-isolate. Yet despite all that, and “despite the unimaginable resources thrown at this project”, T&T “cannot point to a measurable difference to the progress of the pandemic”, the committee chairwoman, Meg Hillier, concluded. Moreover, “the promise on which this huge expense was justified – avoiding another lockdown – has been broken, twice”, she said. “Taxpayers cannot be treated by the government like an ATM machine. We need to see a clear plan and costs better controlled.”

What are the MPs’ specific criticisms?

First, that T&T publishes a mass of performance data, but none that actually shows how effective it is at cutting transmission of the virus, or that measures its overall performance from “cough to contact”. Thus, there is still “no clear evidence” to judge T&T’s effectiveness, the report found – and “it is unclear whether its specific contribution to reducing infection levels, as opposed to the other measures introduced to tackle the pandemic, has justified its costs”. Second, the scheme has consistently failed to match up supply and demand for the service, “resulting in either sub-standard performance or surplus capacity”. Any system of this kind is likely to build in unused capacity. But even as the winter wave arrived in November and December, the percentage of total laboratory testing capacity remained under 65%. And even with its spare capacity, T&T has never once hit its target of turning around all tests (in face-to-face settings) within 24 hours.

But why was the system so expensive?

The MPs say the programme remains “overly reliant” on wildly expensive contractors (217 of them, running 400 contracts), consultants and temporary staff. By last month, T&T was still employing around 2,500 consultants, at an average daily rate of around £1,100 (and top earners getting £6,624 a day). The report also criticises T&T for sowing confusion over rapid-results testing (using lateral flow tests) and their use in different community settings, and accuses T&T of “ignoring” important stakeholders and not exploiting the existing networks of local authorities and NHS primary-care bodies. Overall, that’s a pretty damning verdict. Indeed, according to Nick Macpherson, the former Treasury permanent secretary, it means T&T “wins the prize for the most wasteful and inept public-spending programme of all time. The extraordinary thing is that nobody in the government seems surprised or shocked. No matter: the Bank of England will just print more money.”

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

And is that a fair assessment?

Alas, there is a lot of competition, says Andrew Rawnsley in The Observer. In recent decades, we have not lacked for “ignorant and/or vainglorious ministers squandering billions of pounds”. Tory governments have given us the ERM debacle, the poll tax and the personal pensions scandal. The Blair government’s ill-fated attempt to overhaul the NHS’s IT systems, which kicked off in 2002 and was finally scrapped by the coalition in 2011, cost around £24bn in today’s money, says Ben Chu in The Independent. The biggest fiasco ever was probably the gas-cooled nuclear-power stations built by Harold Wilson’s Labour government in the 1960s, reckons economist John Kay – it cost the state £95bn in today’s money just to build.

So where does test and trace rank?

Judgement is premature, since the widely publicised £37bn figure is the sum allocated over two years (£22bn this fiscal year; £15bn next); it’s not the sum actually spent. As of last November, T&T had spent “only” £5.7bn. That suggests the final spend (even with new contracts in train for a further £12bn) will be less than £37bn, says Alex Thomas of the Institute for Government. The key failures of T&T are its over-reliance on consultants; the lack of transparency over how contracts are awarded; and the failure to incorporate local structures. But the truth, says Thomas, is that both government and independent research does suggest T&T has helped cut transmission. Moreover, around 85% of T&T’s budget goes on the testing system, which had to be built from scratch, and has ultimately been far more impressive than the tracing element.

Not actually a fiasco then?

No one would argue that T&T has been an “unqualified success”, says Robert Colville in The Times. But building Europe’s biggest testing operation has been no mean feat, especially given the decision to build a centralised tracing system from scratch, bypassing local public-health teams. The real lesson from all this, though, is about databases. Throughout the pandemic, the British state’s policy successes “have largely come where there are good databases, and its failures where there are not”. The jabbers have moved “seamlessly down the age and risk cohorts, because GPs had the appropriate patient lists”. The trackers and tracers, by contrast, had to “map out the nation’s social network from a standing start”, relying on individual contact lists (unexpectedly thin ones, averaging only 2.4 per person) from people testing positive. Database management, and combining different databases effectively, “has become the essential task of modern government – and its most important limitation”.

Simon Wilson’s first career was in book publishing, as an economics editor at Routledge, and as a publisher of non-fiction at Random House, specialising in popular business and management books. While there, he published, a bestselling classic of the early days of e-commerce, and The Money or Your Life: Reuniting Work and Joy, an inspirational book that helped inspire its publisher towards a post-corporate, portfolio life.   

Since 2001, he has been a writer for MoneyWeek, a financial copywriter, and a long-time contributing editor at The Week. Simon also works as an actor and corporate trainer; current and past clients include investment banks, the Bank of England, the UK government, several Magic Circle law firms and all of the Big Four accountancy firms. He has a degree in languages (German and Spanish) and social and political sciences from the University of Cambridge.