Serco fights back over Test & Trace: Boss defends plan to pay dividend

Serco’s boss launched a vigorous defence of the NHS Test & Trace system as the company posted booming profits and reinstated its dividend.

The outsourcing group has borne much of the criticism aimed at the scheme, which took months to become effective after it was launched in May as a crucial tool to tackle the Covid-19 pandemic.

But Serco chief executive Rupert Soames came out fighting yesterday, saying that despite a ‘bumpy start’ it was now a ‘remarkable success’.

He said the company has been ‘demonised’ and that a lot of flak it had taken for Test & Trace was ‘wildly unfair and bore little relationship to the facts’. 

Serco runs 25 per cent of Covid testing centres and around half of contact tracing operations – but has been falsely described as one of the groups that designed the overall system and its app.

Serco received around £350million for its Test & Trace contracts in 2020. This is a fraction of the £22billion the NHS Test & Trace scheme is estimated to cost in the current financial year.

It helped boost revenues by 20 per cent to £3.9billion last year while profits jumped 36 per cent to £163.1million.

And in a boost to shareholders and workers’ pension pots, Serco said it would pay a 1.4p a share dividend, worth £17million in total, its first since 2014. 

This prompted a furious response from Labour, with leader Keir Starmer saying the payout was ‘outrageous’.

He tweeted: ‘Taxpayers’ money shouldn’t be given to Serco’s shareholders via dividends. The Government should have placed Test & Trace in the hands of our NHS and local communities.’

But Soames, 61, dismissed the anti-business rhetoric, saying public contract tracing systems had been overwhelmed within weeks and that private companies had needed to step in.

He said the decision to pay a dividend came only after it returned all government financial assistance it was handed early in the pandemic, gave 50,000 frontline workers a £100 bonus each and made sure its suppliers were being paid in good time. 

Soames said: ‘I think that dividends should normally be paid by companies – dividends after all is what pays people’s pensions – unless there are good reasons not to.’

Around 2.5m people are being tested every week and Soames (pictured) said that nine months in, the programme was ‘probably best in the world’. 

He hit back at claims Serco was one of the architects of Test & Trace, saying: ‘Everyone thinks we run it but actually we don’t. 

What has happened here is that because it was called NHS Test & Trace, people did not feel that they could criticise something with ‘NHS’ on it. The next best thing was demonising us.

‘I would use an impolite word to say that’s absolutely nonsense.

‘I think it’s very upsetting to two groups of people – those people who worked bl**dy hard to set it up and see it’s being called Serco Test & Trace, and our people being frustrated because it’s being put on us.’

In its results, Serco described the £350million contracts as a ‘material’ contribution that helped offset losses from closures such as leisure centres and cancelled rail services. 

Serco has around 50,000 staff worldwide whose work ranges from running immigration detention centres to managing the Caledonian Sleeper rail service.