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.

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

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
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”.
Sign up for MoneyWeek's newsletters
Get the latest financial news, insights and expert analysis from our award-winning MoneyWeek team, to help you understand what really matters when it comes to your finances.
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 Customers.com, 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.
-
Older renters £2,000 worse-off than homeowners – the risks of renting in retirement
There are financial risks to renting in your golden years, research suggests
By Marc Shoffman
-
Waspi women targeted in fake compensation scam
The Waspi campaign has warned of a steep rise in fraudulent websites which claim compensation is available for 1950s-born women affected by state pension age changes
By Daniel Hilton
-
What caused the Birmingham bin strike – and what does it mean for British businesses?
The Birmingham bin strike is the fallout from an equal-pay claim brought by female cleaners. That bodes ill for the rest of British business
By Simon Wilson
-
Supersonic travel: How China could 'leapfrog' US and Europe's commercial aviation industry
Opinion Innovation in commercial aviation has been stuck for 60 years. A commercial supersonic jet might be back on the market soon, but will China get there first?
By Matthew Lynn
-
How British businesses can tackle Trump's tariffs
The majority of British businesses are likely to take a hit from the chaos caused by Trump’s tariffs to reorder global trade. Companies in the firing line face some difficult decisions, says David Prosser
By David Prosser
-
Trump wants to colonise Mars – will it happen?
Donald Trump wants to plant the US flag on Mars. Could humans really live there?
By Simon Wilson
-
A new wealth tax is a terrible idea. The rich are already being hit by sneaky taxes – Merryn Somerset Webb
Opinion Ideologues want to squeeze more tax out of the rich with a wealth tax. They’re already wrung dry, says Merryn Somerset Webb
By Merryn Somerset Webb
-
Why are energy bills so expensive in the UK?
Electricity bills in the UK are higher than in any comparable rich country. Some blame the net-zero zealotry of the government for that. What is really to blame for high energy bills?
By Simon Wilson
-
Will Putin invade Europe? Why investors know Russia is a paper tiger
Opinion Markets are right to ignore talk of Putin invading Europe, says Max King.
By Max King
-
Why French far-right leader Marine Le Pen has been banned from running for office
Marine Le Pen, presidential candidate and leader of France's right-wing National Rally party, has been barred from standing by the country's judges.
By Emily Hohler