At the heart of the tale is a prime minister who promised NHS test and trace would be a “world beating” operation. Next to him sits Matt Hancock, the health secretary whose record is now indelibly associated with the smartphone app that was meant to be integral to controlling the virus, but has yet to materialise. Other key actors include Serco, the multinational outsourcing company that has previously been contracted to run everything from prisons to air traffic control – and, at a cost of £108m, was recently put in charge of recruiting and training thousands of call centre workers to establish contact with infected people and ensure that anyone they had been close to went into self-isolation.

Over the five months since lockdown began, one other set of voices has been central to the drama: local authorities, whose 140-odd directors of public health are expert in disease control and contact tracing, and whose councillors, officials and staff are forensically familiar with the areas they serve, even after a decade of crushing austerity. During the outbreak’s initial phase – roughly, from February to the end of May – many of these people complained of being cut out of decision-making about the pandemic, and deprived of resources and the all-important data that would allow them to get on top of local outbreaks.

According to Sir Chris Ham, a lifelong NHS insider and the former chief executive of the health charity the Kings Fund, the basic insight either ignored or misunderstood by the government was plain. “Contact tracing has to be led locally by people who work in the communities that are affected and understand them,” he says.

“They’re part-detectives, part-anthropologists: they work with leaders in faith groups, in community organisations, and public services, to understand why there are more cases in a particular area, and how to work with everyone to contain and reduce the challenges. You can’t do that sitting in a remote call centre.”

But now, with the reopening of schools in England less than a month away, everything is to change. From 24 August, nationally-recruited call-centre staff will be “ringfenced” into individual teams that will be linked to specific councils, and the national test-and-trace effort will take a new “integrated” and “localised” approach. This shift follows the arrival of local measures aimed at controlling Covid-19 flare-ups in Leicester and Greater Manchester – and the trailblazing creation of dedicated local test-and-trace operations in Blackburn, Lancashire, Calderdale in West Yorkshire, and Liverpool.

Last week, figures were published showing that whereas call-centre or online workers managed to trace 56% of people’s contacts, the figure was 98% among local health protection teams. The imbalance between the two approaches was perhaps most clearly demonstrated by stories of call-centre workers making handfuls of calls per month, while council staff were worked off their feet.

For those of us who have been following this story, disentangling the confounding mess that was hastily built to administer testing and tracing has been an onerous task. If the tale has a single point of origin, it was the abandonment of initial efforts on 12 March, and the outbreak therefore being allowed to slip free of any meaningful monitoring or official control. When the government then resolved to begin mass testing, its network of regional testing centres was outsourced to yet another private company, Deloitte.

Serco was joined at the heart of the national contact-tracing system by the US “customer services” giant Sitel. Local directors of public health, meanwhile, complained that they were unsure of their relationship with these players, and had woefully insufficient access to detailed data which – in theory at least – was being harvested by the government’s testing machine: information showing people’s age, address, and ethnic origin, all vital to local control of the pandemic.

Andy Burnham, the mayor of Greater Manchester, said that people on the ground had ended up being “like local detectives being asked to solve crimes without being given the names of any of the victims or suspects.” Even when Leicester became the first area of the UK to impose a local lockdown, the city council initially bemoaned its lack of access to crucial infection data.

Belatedly, however, the basic orientation of the test-and-trace system had begun to change. In mid-May, NHS test and trace had announced the recruitment as a “national lead on tracing” of Tom Riordan, a highly-respected figure in local government, seconded from his job as the chief executive of Leeds City council. Insiders say that as he worked with Dido Harding, the Tory peer and former CEO of the mobile phone company TalkTalk who is now the executive chair of the test-and-trace operation, its workings at least began to tilt in a more localised direction. Insiders now talk about a “reverse takeover”, whereby the very councils that were initially cut out of the national test-and-trace system have been belatedly pushed to its forefront.

Nonetheless, change has taken months to materialise. On 1 July, it was announced that councils were to be offered the postcode-level infection data that they had been frantically requesting for months. Two weeks later, the government said that councils would be granted powers to close sites and premises hit by coronavirus outbreaks – and on 6 August, their access to information about local Covid-19 levels was enhanced to “near real-time data”.

If these things suggest palpable improvement, big questions remain. Concerns continue to be expressed about the numbers of test-and-trace workers councils are able to call on. Even if the national test-and-trace operation is now set to shed 6,000 workers, what will the continuing role of outsourcing companies be, and how much will it cost?

There is also a low rumble of concern about base politics. With signs of a second wave and the looming arrival of autumn, councils’ expertise will be essential for any meaningful control of the virus. But if England’s woeful experience of Covid-19 takes another turn for the worse, putting them at the core of how the disease is dealt with may also allow Boris Johnson and his colleagues to slip free of blame – something that must have at least flitted across the collective mind of this most calculating of governments.

Shocking numbers, for now. But by Christmas such vignettes will be piled higher than the snow because, if the official projections are correct, the UK faces a jobs crisis the likes of which it hasn’t confronted for two generations. The Office for Budget Responsibility (OBR) forecasts that this winter unemployment will rocket to levels last seen in the early 1980s under Margaret Thatcher, with nearly one in eight workers unemployed. Thought you’d been hurt badly by the banking crash of 2008? Just wait.

Here is the ultimate implication of the OBR’s analysis: if you are under 50, chances are you will never have been in a labour market as tough as the one that lies just ahead. The face of the 1980s recession was The Full Monty: male, middle-aged and on the scrapheap, alongside his heavy industrial employer. The face of the 2020 depression is more likely to be young, female and just let go from a restaurant – but in the early surge it will include a lot of people, from every walk of life.

Once the summer lull is over, an earthquake will shake Britain. Its early tremors can be felt already, as unemployment rises, yet few in the political classes have paused to consider the havoc it will wreak, let alone what might seriously be done about it. If anything, the government is helping to bring on the jobless crisis. This week, the chancellor, Rishi Sunak, has begun cutting the subsidy he gives employers to keep workers on the payroll. That scheme has helped protect 9.5 million jobs and its gradual withdrawal will immediately mean more P45s being handed out. Not that you’ll hear much about it: Sunak prefers doing photo-ops to publicise his scheme to give voters half-price Happy Meals.

The government that had to be shamed into finding £120m to feed hungry kids over the school holidays happily chucks four times that – half a billion pounds – on a 13-day gimmick. Priorities, eh? Yet Sunak’s reward is ever more newspaper profiles. Last Saturday the Times magazine embellished its portrait of the chancellor with a Photoshopped halo.

Any pundits with stocks in the chancellor should cash them in now, because from this sunlit peak his standing can only fall. After doing many of the right things in March to save jobs, Sunak has done precious little since. The result will be to waste much of the £200bn he has spent to keep businesses and workers afloat.

The Treasury fully shuts its job retention scheme entirely at the end of October. Firms will be offered a small bonus to hold on to staff, but many will make redundancies. At that point, temporarily-idled employees who have been drawing 80% of their wages will crash through a trapdoor into the harsh world of unemployment benefits.

David Cameron’s government spent much of the past decade deliberately shredding the social safety net. “This is not an easy life any more, chum,” boasted welfare secretary Iain Duncan Smith in 2012. He and his chums helped ensure the UK went into the current crisis with one of the meanest employment safety nets in the industrialised world. And while Sunak has raised some benefits, they remain abysmally low.

What awaits those unlucky millions who go from being “strivers”, as George Osborne called them, to “skivers”? A massive shock. Early surveys by the Resolution Foundation show that of those starting to claim universal credit since the lockdown, one in three are already falling behind on bills. Later this month, landlords will be allowed to evict tenants who can’t pay their rent, and mortgage lenders will again be able to repossess homes.

In her just-completed book, Abusing Power, journalist Kate Belgrave documents the toll the welfare state takes on those who need it most. She records how Paul, battling in his filthy caravan to keep himself presentable, is told by a housing officer, “You’re too well-dressed to be homeless”, while jobcentre staff interrogate Marsha, who has mental health problems, about her childhood abuse. The government suspended much of this bullying early in the pandemic, but soon enough it will restart.

The welfare system has been reconfigured to punish Other People, not to help People Like Us. It is not fit for an era of mass unemployment. But neither is much else about polarised, privatised Britain during this pandemic. An economy addicted to consumerism looks useless at this point – when the last thing anyone wants is cafes, hotels and consumer services. The low-paid precarious jobs fostered by Tory ministers over the past decade will be among the first to go in this depression.

Over the crises of the past 40 years, the political class has always offered a better tomorrow. Thatcher responded to industrial decline with a services revolution and a credit boom. Tony Blair promised a knowledge economy. Cameron urged us on in the global race. For all his bombast and bluster, Boris Johnson can’t point to any sunlit upland just ahead. This time, there’s just a dead end.

• Aditya Chakrabortty is a Guardian columnist

Serco is facing growing calls to be axed from any future involvement in contact-tracing services amid concerns over the performance of private firms contracted to trace people who have mixed with infected individuals.

An email leaked to Justin Madders, the shadow health minister, showed the company was approached by Public Health England in January over preparations to tackle the pandemic, prompting questions over whether it was “cherry picked” by the government and given the inside track.

The £108m contract was directly awarded to Serco by the Crown Commercial Service on behalf of the Department of Health and Social Care (DoHSC) in May. It was not put out to open tender but selected via an existing framework of suppliers.

It comes after the government announced on Monday that NHS test and trace was cutting 6,000 contact-tracer jobs and allocating roles to regional teams to work with councils, after criticism that the centrally run system was failing to tackle local outbreaks.

Along with outsourcing firm Sitel, Serco has been contracted by the government to oversee “non-complex” contact-tracing cases in England, where call centre workers contact individuals who have spent time with an infected person. The firm has been forced to defend its performance, however, after figures showed just over half of people from the same household as an infected person were being contacted. Concerns have been raised by contact tracers that they have made just a handful of calls and feel untrained.

With Serco’s £108m three-month contract up for renewal on 23 August, the shadow health secretary, Jonathan Ashworth, and the shadow Cabinet Office minister, Rachel Reeves, jointly wrote this week to the health secretary, Matt Hancock, urging him not to hand Serco any more money to run contact tracing. They are calling on the government not to extend the contract, which could be worth up to £410m.

On Tuesday Madders released an email that he said was sent to Serco contact tracers in early June on behalf of the firm’s customer services director, Garry Robinson, which suggested the company had been contacted by health officials in January asking for help.

In the email, Robinson conceded it had been a slow start but stated there would be a “steady increase in the workload” in the coming weeks. In a section titled “journey so far”, he detailed the company’s early involvement in the pandemic response, writing: “I received a call from Public Health England officials on 22 January, explaining there was a virus in China, which was causing them concern, and they asked if I could stand up a small team in case they required urgent support. Since then, I have been responsible for a number of support lines across various government departments offering support to citizens of the UK concerned about their health, the financial impact CV-19 has had on them, their children’s education and the impact on their companies.”

Madders told the Guardian: “That email went out to contact tracers in early June and suggests Serco was cherry picked very early on by the government to get involved in the pandemic response. It looks like they’ve had the inside track from the start. It begs the question, why was Serco asked as early as January to get involved in the government’s response to the pandemic?

“It’s clear that adequate procurement processes were not followed when Serco was later awarded a £108m government contract to oversee contact tracing. Like with some PPE contracts, this seems to be creating a bit of stench. It’s up to the government to demonstrate there was no favouritism at play here.”

Cat Hobbs, director of We Own It, an organisation that campaigns for public ownership of public services, urged the government to give the money it could spend on renewing private contact-tracing contracts to local authorities. “Local teams have the tools and the local knowledge they need to do this vital work before any second wave this winter. Now they need the money,” she said.

A Serco spokesperson said: “Serco was appointed to the test-and-trace programme under the Crown Commercial Service’s contact centre services framework. We gained our place on the framework through fair and open competition. Serco has played an important part in helping to reach hundreds of thousands of people who might otherwise have passed on the virus. Our team of call handlers has been 93% successful in persuading people to isolate where we are able to have conversations.”

A government 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.”