As school budgets tighten and the cost-of-living crisis continues to bite, one of the most urgent, yet under-discussed, pressures in our schools is on their catering provisions. According to Seb Godwin, co-founder of Procure Education, the root problem doesn’t always lie with suppliers, but with how contracts are funded, procured, and managed.
Far too often, he says, schools are subsidising catering, sacrificing other vital resources, and ultimately undermining pupil wellbeing.
The real funding pinch
A huge challenge right now for school leaders is that government funding – currently £2.61 per meal – is simply no longer enough to deliver high-quality, nutritious meals. An even bigger challenge is in managing the impact this has on the wider school function.
It’s not an easy fix though and the school meal system is under severe strain. Caterers are warning that government funding is no longer enough to deliver nutritious, balanced food. In reality, they say funding for a quality meal should be between £3.00 and £3.20.
At the same time, food prices are up almost 40% since 2020 while energy, staffing and compliance costs continue to rise. The graph below1 demonstrates the real issue, that a funding gap of 55p per meal could, in reality, cost the school £62,700 per year.
LACA, which does so much to lobby the Government in this area outlined this very issue on the announcement of its new chair, Brad Pearce, suggests funding should actually be £3.45 per meal, and even goes on to suggest “food inflation is suggested to reach 5.7% by the end of the year”.
And, coupled with the National Insurance and national living wage hikes, extending free school meal provision to those from families receiving universal credit, and the “widening gap” between costs and funding, “caterers cannot keep absorbing these pressures indefinitely”. At Procure Education, we fully support LACA, and look forward to a positive outcome of its intention to write to the prime minister, the chancellor and the secretary of state for education to highlight the growing issues further.
Schools are being forced to absorb these massive cost pressures, and the result is many are running catering at a loss, with deficits so severe that they impact broader school finances. In some cases, this has led to cuts elsewhere – even to teaching assistants.
It all sounds like the perfect storm, and it’s one that won’t stop brewing. Over a quarter of pupils in England (25.7%) are now eligible for free school meals, with projections showing another half a million children likely to qualify by 2026.
A few years back, we would work with schools to help them maximise their catering returns. Today, we are trying to help them break even to stem huge losses. As has already been reported, these losses can result in a reduction of staff, with an impact on children’s education and well-being. If the losses get much worse, that impact will need to be felt wider, which is terrifying.
Without better funding, schools will continue to subsidise meals, and that drains money from teaching, learning, and support.
A policy step in the right direction, but not nearly enough
Recently, the Department for Education boosted funding for breakfast clubs. Under the revised scheme, mainstream schools will now receive an increase to £1 per pupil per day, plus £25 per day to cover fixed costs like staffing. While this is a welcome increase from the 60p rate in the pilot, it still doesn’t erase the risk of schools struggling to budget.
The new funding will help, particularly for staffing, but many leaders remain vocal about its insufficiency. As some school heads warned during the pilot, 60p simply didn’t cover costs, and even with higher rates, the budget remains tight.
When schools run breakfast clubs at a loss, they often have to pull resources from other areas, and that’s not just about breakfast clubs; the underlying challenge is chronic under-funding.
Procurement reforms remain valuable, and from our work with trusts and local authorities, we are finding that those we speak to are looking for ways to be more efficient, more savvy with their budgets. They can only deal with what’s put in front of them, and what’s in the pot, and we continue to advocate for six guiding principles. They are:
1. Build outcome-based contracts
Move beyond simple service specifications, and include KPIs for pupil satisfaction, meal uptake, sustainability and waste reduction. These can be measured and help drive compliance.
2. Keep contract terms flexible
Most external contractors now provide flexible contracts; we no longer see schools tied down for five – seven years. Shorter terms with break clauses or reviews built allows schools to adapt if inflation spikes or priorities shift.
3. Align incentives with outcomes
A procurement partner’s success metrics should match the school’s. Consider performance-linked fees which are tied to uptake or satisfaction improvements.
4. Demand transparency
For instance, what are other schools paying? How do supplier mark-ups compare?
5. Empower local and SME suppliers
A procurement partner could open up lot sizes, simplify paperwork, and actively develop local supplier networks.
6. Collaborate across trusts and local authorities
Procurement is stronger when schools share insight. Multi-academy trusts and councils can pool demand, run shared tenders, and raise standards collectively. A good procurement partner encourages collaboration.
The wider impact on school finances and staff
Research consistently links nutritious school meals with better concentration, behaviour, and academic attainment. A Food Foundation report highlighted that children with access to regular, high-quality school meals are healthier, perform better and are more engaged in lessons. On the flip side, poor diets are associated with absenteeism and reduced learning outcomes.
That means funding decisions have a direct line to pupil wellbeing. While upping provision for breakfast clubs is truly a good idea, it will have a much greater negative impact if schools are having to part fund every meal, every member of catering staff, and the additional energy bill.
When a school’s catering operation runs at a loss, the consequences cascade, and those losses are absorbed by the school’s wider budget. That might mean less money for educational support, and we’ve heard about deficits so large that schools can’t sustain delivery without trading off vital support roles.
Over time, those funding shortfalls erode the very mission of education, with decisions becoming commercial rather than educative. We do not want to hear statements like: “Can we afford to run the breakfast club?” instead of “Is this the best thing for our children?”
The bigger picture – policy and opportunity
The UK Food Strategy for England calls for “nutritious, locally grown British food” to be made more accessible and affordable through public sector procurement. This is welcome, as there’s a clear direction of travel and school catering should support national wellbeing, not just meet minimum standards.
Similarly, the Sustain “Follow the Carrot” report estimates that universal free school meals could generate more than £600 million in additional demand for British producers – but only if funding is reformed to make space for them.
Often seen as a back-office function, school procurement is now a frontline issue in education and food policy, but it is continually hamstrung by funding and subsequently, difficult decisions have to be made.
Let’s not normalise this whole situation. Brad Pearce, the new chair in place at LACA has a clear vision, and starts in ernest by going direct to the top with these concerns – real concerns being felt by every school in the country. We are right behind him here, because without a meaningful funding uplift, schools will continue to carry the burden of rising costs, and the risk is that important operations will be compromised, or lost for good.
