The government has allocated £10 billion of public money for spending on the much-criticised test and trace system for England, Treasury documents released today have revealed.
The sum, much of it going on contracts with private firms like Serco and G4S, amounts to more than 100 times Public Health England’s £90 million annual budget for infectious diseases and was described as “extraordinary” by a member of the Independent Sage group of scientists.
Labour demanded a full break-down of the test and trace budget to ensure that the money is being spent in “the most effective way to limit the spread of Covid-19”.
The figure forms part of financial interventions in response to the outbreak totalling around £300bn - more than a third of the government’s annual spending of £850bn in a normal year - detailed in an official Treasury document released alongside chancellor Rishi Sunak’s plan for jobs.
The colossal spending sets the scene for tax rises, public spending cuts or borrowing on a massive scale when Mr Sunak sets out plans to get the national finances back on an even keel in the autumn.
Also included in the total was £15bn allocated for personal protective equipment (PPE) for frontline workers since mid-March, £1bn on additional ventilators for the NHS and £5.5bn for other health spending, including to pay for use of private sector facilities.
The spending on protective equipment was described as “astonishing” by the director of economic think tank the Institute for Fiscal Studies, Paul Johnson, who said that “anyone manufacturing PPE will be doing pretty well out of that”.
It formed part of “a very large increase” of almost £49bn in additional spending on public services approved by the Treasury in response to coronavirus, he said.
Newcastle University public health professor and Independent Sage member Alysson Pollock described the £10bn budget for test and trace as “shocking”.
“This should have been put into supporting the established system of public health services instead of going into a scheme run by private companies where much of it is squandered and wasted,” she told The Independent.
“There are really serious questions to be asked about the way these contracts were set up and about their performance. Ten billion pounds and we don’t have an effective test and trace strategy. Not all cases are being detected, half of cases are not giving contacts and those which do are largely doing it through traditional public health teams, while the commercial call handlers have got little to do.
“All of these contracts need to be opened up and looked at now. It’s not too late to stop some of them.”
Labour shadow cabinet member Rachel Reeves said: "Early in the crisis the government wasted the opportunity to build on existing expertise and experience within our public services for contact tracing and instead ministers chose to hand lucrative contracts to a handful of outsourcing companies - including some with a questionable record of delivery.
“We have not been testing the number of people promised by ministers and a world-beating tracing strategy is a far cry from what we have today.
‘We need to see a full breakdown of the £10bn the government has allocated for testing and tracing to ensure that this money is being spent in the most effective way to limit the spread of Covid-19."
The Treasury paper revealed total additional spending of almost £159bn which had been approved before Mr Sunak’s new measures to protect jobs announced today, which are expected to add around £30bn to the bill.
A further £123bn has been allocated to loans and deferrals of tax payments, some of which may never be recouped by the Treasury.
The Treasury described the spending as “one of the most comprehensive and generous packages of economic support globally” to “help businesses, individuals, and public services in response to the unprecedented economic emergency created by Covid-19”.
A source said Mr Sunak had been clear that the public finances would eventually have to be put back on an even footing, but said that details of how this would be done will be held back until the budget and spending review in the autumn.
The largest element of additional government spending announced since 11 March was support for employment through Mr Sunak’s furlough and self-employment schemes, with a spending allocation of £69bn.
Some 1.1m employers have so far taken advantage of the furlough scheme to keep on 9.4m workers who would otherwise have been laid off, while 2.7m self-employed people claimed a total of £7.7bn in support.
Support for businesses such as grants and rate reliefs came to around £30bn and direct support to households through changes to welfare benefits totalled £8bn.
Some £73bn was made available in loans to businesses and organisations and VAT and income tax deferrals totalled a further £50bn.