Serco, the company awarded a contact-tracing contract worth £108m, was fined £2.6m for failures on another government contract just months ago, the Guardian has learned. The fine, referred to as a service credit, was issued for shortcomings on an asylum-seeker accommodation contract between September 2019 and January 2020. It followed a previous £1m fine on an earlier Serco asylum-seeker accommodation contract last year. A National Audit Office report last month stated that Serco had “failed to meet targets on moving people to dispersed [longer-term] accommodation and complaints. Many failures on property maintenance issues were in the Midlands and east of England.” A leaked memo released by Labour last week revealed that Public Health England had approached Serco to help with preparations for the pandemic as early as January, during the same period failures were identified in the asylum-seeker accommodation contract. Serco has already had to apologise after breaching data protection rules on its test-and-trace contract by inadvertently revealing the email addresses of new recruits. The company has come under fire after reports emerged of contact tracers being underoccupied and figures showing just over half of people from the same household as a person infected with Covid have been identified. The junior health minister, Edward Argar, is a former Serco lobbyist. The chief executive of Serco is Rupert Soames, the grandson of Sir Winston Churchill. The NGO We Own It, which campaigns against the privatisation of public services, is calling for Argar’s resignation, saying there is a clear conflict of interest between his previous role with Serco and his current role. Cat Hobbs, the director of We Own It, said: “People will be completely outraged to discover that Serco’s long list of failures goes on. It’s utterly unacceptable … The public won’t support the government rewarding Serco with yet more juicy contracts either. They don’t deserve a penny more of public money. “It’s time for the government to face reality. Serco should be absolutely nowhere near any of our public services. And it certainly shouldn’t be allowed to continue running our vital test, track and trace system, a system it has catastrophically failed to deliver. “To make matters even worse, as Serco continues to scoop up multimillion pound contracts right now, their own former head of public affairs, Edward Argar, is sitting at the heart of government, in the very department most responsible for our coronavirus response. It’s time for Edward Argar to see the clear conflict of interest, to do the decent thing and to resign.” Commenting on the £2.6m penalty, Jenni Halliday, Serco’s contract director for asylum accommodation and support services, said: “This is a large complex contract and service credits are a normal part of the commercial processes of government contracting. “As the NAO report states, Serco is broadly meeting performance standards set by the department and has on average improved our performance on addressing emergency maintenance issues and on resolving people’s complaints. “We are confident that given the challenges posed by the Covid-19 pandemic we are providing decent, safe, secure accommodation for the people in our care.” The disclosure comes just before Serco’s test-and-trace contract is up for renewal on 23 August. A Department of Health and Social Care spokesperson said: “As a result of public and private sector organisations working together at pace, we were able to protect our NHS and strengthen our response to this unprecedented global pandemic. “Contracts have been awarded completely in line with procurement regulations for exceptional circumstances, where being able to procure at speed has been critical in the national response to Covid-19. Minister Argar was not involved in these processes.”