Covid: Parasites enjoy a bonanza whilst workers struggle

There has never been a better time for workers to learn hard truths about the nature of the capitalist system.

Proletarian writers

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Serco has been having a good plague, with profits expected to clock in at between £160m and £165m.

Proletarian writers

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The stench of corruption around the multimillion-pound contracts awarded by the government in response to the Covid pandemic has become so bad that even the Times has felt obliged to sound a warning note, fearful of the public backlash that too naked a display of greed, nepotism and outright fraud might trigger.

It is getting hard to convince everyone that we are ‘all in it together’ when every new day brings fresh proof that the government and the capitalist class for which it fronts are all in it for themselves. It seems that currently the establishment ‘Thunderer’ is on a mission to save the kleptocrats from themselves.

Listen to Clare Foges, writing in the Times on 19 October, hoisting storm cones: “As the scale of the coronavirus threat emerged early this year, most scented danger. Others caught the whiff of something else: the gravy train to end all gravy trains.

“Weekly come the stories of huge sums of public money spent with seeming disregard for value, without tender or transparency, for services of dubious value or poor quality, to companies and consultants which often have close links to power.

“Though public attention is fixed on lockdowns and curfews, a bad smell grows – and the government would be wise to start clearing the air.” Otherwise, runs the subtext, capitalism itself might be given a bad name, and that would never do. (Time to stop the coronavirus gravy train)

But the trouble about finding and dealing with bad apples is that you pretty soon find that the whole capitalist barrel is rotten to the core. The cumulative effect of a drip-feed of partial disclosures of dodgy contracts, shell companies, cronyism and looting of the public purse, rather than clearing the air, is further to undermine public confidence in capitalism itself.

The Times is to be congratulated on having unwittingly contributed to this welcome outcome by its recent detailed coverage of the many Covidgate scandals now enveloping the government.


The first major governmental failure over Covid to hit the headlines concerned the supply of Personal Protective Equipment (PPE) to frontline staff in the NHS.

Having failed to act either on the findings of a 2016 simulation (Operation Cygnus), which drew attention to the unpreparedness of the country in the event of just such a pandemic, or on similar warnings from the World Health Organisation, the government went into a blind panic, belatedly splashing money around to compensate for its earlier inaction.

In one bizarre example, in its haste to be seen to be doing something urgent to address the problem, the government enlisted the dubious assistance of a sweet manufacturer in County Antrim. It dished out contracts worth £107m to Clandeboyes, despite the company having no prior expertise in making face masks or surgical gowns – or in anything else much apart from wholesaling confectionery.

That fact might have surfaced had the contracts been subject to any kind of competitive tendering. Such free-market competition, supposedly giving a meritocratic boost to best practice, was conspicuous by its absence.

On a larger scale, Ayanda Capital, a company whose expertise was in currency trading and private equity, secured a £252m PPE contract, supplying 50 million masks that had to be trashed because they did not conform to safety standards and could not be used.

Ayanda is controlled by the Horlick family via a holding company in the tax haven of Mauritius, and has connections with Liz Truss, the secretary of state for international trade and president of the Board of Trade. A senior adviser to the Board of Trade, Andrew Mills, is also listed as an adviser to Ayanda Capital.

Another weird bonanza winner was Pestfix, a pest control company with more expertise in chasing rats than fighting Covid.

Send in the consultants

But the biggest snouts in the trough were such behemoths of the financial consultancy world as PwC (Price Waterhouse), KPMG (Kleinwort Benson/Peat Marwick) and McKinsey. Their expertise lies in making lots of money, tailoring audits to flatter their corporate clients, or in dreaming up glossy mission statements – not in helping the state engage seriously with a pandemic.

In the article cited earlier, Foges could not resist quoting an uncharacteristically truthful statement from Dominic Cummings, which saw him declaring that the Whitehall procurement system “hugely favours large established companies with powerful political connections – true corporate looters”.

Sure enough, KPMG was paid just shy of £1m for doing three months’ work on Harrogate’s Nightingale hospital; PWC notched up 20 contracts with a combined value of £24m; and McKinsey grabbed 16 contracts totalling £38m.

One of the contracts landing in McKinsey’s lap was one for £560,000 to launch the ill-fated test and trace programme. By a curious coincidence, the woman who was chosen to run the programme, Tory peer Dido Harding, had herself previously worked at McKinsey, the company chosen to handle the public relations circus and project the ‘vision, purpose and narrative’.

Other consultants have left their fingerprints all over the botched programme, with 1,100 consultants from Deloitte now drafted in and Boston Consulting Group executives pulling in up to £6,250 a day.

The abject failure of the government’s test and trace programme, rammed through in an attempt to sideline the NHS, local authorities and local community structures, and needlessly trying to reinvent the wheel from scratch, proved to be a disaster. By the week ending 7 October, only 62.6 percent of close contacts of people testing positive for Covid were being reached by the system.

Sooner than take responsibility for this unholy mess, Dido Harding is concentrating her efforts on damage limitation, busily backpedalling on the grandiose claims made earlier, bleating that that the test and trace programme – at a staggering cost of £12bn and counting – was never intended to be a “silver bullet”. It’s a little late to manage the expectations so blithely raised by McKinsey’s praise singers at the outset, however.

Bring in the outsourcers

On the ground level of test and trace, the donkey work of answering phones, setting up testing centres and posting off tests is being shouldered by one or other of the outsourcing outfits that have long since battened on every area of public service, from the NHS to social care to prisons to refuse disposal. In the case of test and trace, the outsourcers of choice included Serco, G4S and Mitie, all familiar faces.

Serco has been anxious to distance itself from any responsibility for the mishaps around test and trace. In fact, the scope of its activity in this area has been enormous, and enormously profitable. Serco has directly employed or subcontracted 4,000 people in Covid testing at 125 of the 500 sites, plus another 5,000 engaged in tracing positive cases.

But Serco downplays its involvement in test and trace now that it has become toxic, saying that its involvement has been “limited and specific”, and does not include “the design and management of the whole programme, the NHS app, the IT systems, the booking of tests, the provision of test kits, the test laboratories, delivering test results or the identification of contacts of people who have tested positive”. You wonder what Serco’s 9,000 employees were actually doing. (Test and trace gives Serco profits a boost by Robert Lea, The Times, 17 October 2020)

But whilst seeking to minimise its role in the cock-up, Serco has not been reluctant to profit mightily from its involvement. Serco has been having a good plague, with profits expected to clock in at between £160m and £165m. And its specifically Covid-related services are understood to be on a 4 percent profit margin.

According to openDemocracy, Serco’s contact tracing contract allows the company to oversee its own monitoring (ie, to police itself) and rules out automatic penalties for underperformance. (Government procurement scandal continues with £43.8m PPE Contract for dormant firm by Sam Bright, Byline Times, 2 September 2020)

The absence of any penalty clause was admitted by the health minister Helen Whately in October 2020. All the profits and none of the responsibilities: a rogue’s charter whose writ runs across the public sector and all of public life.

What all this comes down to is this: whilst ordinary families have been struggling through the current health emergency, looking to the country’s leaders to offer some help and guidance, all that the government’s pals in the City, the great finance houses and the outsourcing bandits have had in their sights has been a fantastic opportunity to raid the public purse with impunity.

Conversely, the opportunity this has opened up to workers is the chance to learn a hard lesson: that the interests of the tiny class of capitalist exploiters for whom the system is run are directly opposed to the interests of the working class, from whose labour all wealth is created.

This has never been more true than right now, when we are collectively getting mugged whilst being told by the mugger that we are all in it together.

It’s time to watch and learn.