The government is preparing to award coronavirus testing contracts worth an estimated £5bn to commercial bidders, in what critics fear is a “backdoor” subsidy to the private sector. The vast new budget, which works out at £2.5bn per year and will be managed by Public Health England (PHE), is equal to the entire annual spend on English NHS laboratories. The Department of Health and Social Care said it was creating a new national framework for testing which would replace current arrangements, with further details released “in due course”. The new plan, outlined in a public notice, dwarfs the budget for the current framework. Completed in 2017, its estimated cost was between £80m to £120m. NHS sources said they had been told the cash would be used to fund an expansion of Lighthouse laboratories. Created in April to boost Covid-19 testing capacity, they are at the centre of the storm over why it took until last week for local authorities to begin receiving postcode data on the spread of coronavirus in their communities. It is understood that seven new commercially run laboratories are planned in the short term. That number could eventually rise to 29, one for each NHS pathology region in England. Run in partnership with private firms including the pharmaceutical giants GlaxoSmithKline and AstraZeneca, the four existing Lighthouse labs in England and Scotland have been dogged by reports of thousands of lost and voided samples, slow turnaround times, and a failure to share data on results with GPs and local authorities. “The government know they’ve made mistakes and they seem determined to continue using the same model,” said Allan Wilson, the president of the Institute of Biomedical Science, the professional body for laboratory scientists. “We are campaigning for NHS labs to be allowed to bid for these contracts. This should not be exclusive to commercial partners. As an absolute minimum, whoever bids for this has to demonstrate clearly how they will integrate with the NHS, so that test results are immediately available to clinical staff and public health systems.” The project is the next step in Matt Hancock’s ambition to scale up homegrown testing capacity, making the UK less reliant on imports of chemicals and equipment. The notice says the framework will support “all five pillars of the UK testing strategy” launched by the health secretary in April. The framework will select a pool of contractors whose services can then be called on by all four nations, and by NHS trusts and local authorities. It will be in place for two years, with an option to extend, and the notice estimates its value at £5bn over the period. As well as providing new labs capable of processing 10,000 tests per day, the notice calls for manufacturing of specialist equipment, testing kits, and research and development. Allyson Pollock, a public health professor at Newcastle University, said the money should be used to build up publicly owned laboratories run by the NHS or PHE. “This looks like a big subsidy for industry through the back door to support the government’s policy of building a British diagnostics industry,” she said. Detailed results from NHS-run labs, which test hospital staff and patients, have been available from the beginning. But this is only a part of the picture. Tens of thousands of tests are carried out each day at drive-in centres and by mobile testing units, and then processed at the Lighthouse labs. Problems over IT systems and data protection meant that for two months, no detailed information from these tests was being sent to GPs, hospital doctors or local councils. The information blackout has been blamed for allowing the virus to spread undetected in towns and cities including Leicester, which was ordered to enforce local lockdown measures this week. Jo Martin, the president of the Royal College of Pathologists, said expanding the Lighthouse labs would create the same risk unless they were able to share data in a timely way. “It is really important that the data is easily accessible by those who need to be able to deal with infection in both primary and secondary care, but also those who need to trace related infection. I would like to see very close collaboration between any new endeavours and existing providers of pathology services to the NHS.” Although data flow has improved, Lighthouse labs are still unable to say how many individuals they have processed tests for each day, and hospitals still cannot see whether a new patient has tested positive if their swab was processed in the Lighthouse system. “There needs to be clarity as to what the ultimate goal of all of this is,” said Martin McKee, an adviser to the European commission and a professor of public health at the London School of Hygiene and Tropical Medicine. “It is a very large sum of money and the scale of the budget seems to go far beyond what is normally spent on purchasing equipment and diagnostics. The fragmentation of NHS services has been a major factor in the UK’s poor performance during this pandemic, so it is not obvious why you wold want to fragment it even further.” GlaxoSmithKline and AstraZeneca were approached for comment. A spokesperson for the Department of Health said: “As part of an unprecedented response to this global pandemic, we have quickly established in a matter of months the biggest network of diagnostic laboratories in British history. Private and public sector laboratories – including within the NHS – form a central part of this network, which is curbing the spread of the virus and saving lives. “Further details about the new National Microbiology Framework will be announced in due course.”