As schools continue to review how key services are delivered, the debate around outsourcing versus in-house provision shows no sign of slowing. Catering, in particular, is often placed under the spotlight early in the year, with many education settings using the January to April period to assess current performance, explore alternatives and, where appropriate, prepare for a new arrangement to begin in September.
Outsourcing still plays a valuable role and works well for many schools. When supported by the right expertise, it can deliver efficiency, innovation and operational improvements that are difficult to achieve internally. However, when schools choose to work with a consultancy to support a catering tender, one area continues to cause confusion: consultancy fee models.
Despite tender management being a well-established process, there remains a lack of clarity and transparency around how consultants are paid. More worryingly, some schools report not fully understanding how much they are being charged, where fees sit within the catering budget, or how those costs are ultimately recovered. In some cases, consultancy services are even marketed as being ‘free’ – a claim that is misleading and simply doesn’t reflect reality.
There is no such thing as a free tender management service. Fees may be structured in different ways and may not always be paid directly by the school, but they always exist somewhere. What matters most is transparency, so schools fully understand what they are paying for and how those costs affect budgets over both the short and long term.
One size doesn’t fit all: schools, structures and budgets
There are many different fee models in the market, just as there are many different types of school. Some operate under local authority catering contracts, others manage catering budgets directly. There are standalone schools, individual academies and large multi-academy trusts, all with differing governance structures, priorities and financial pressures.
The most appropriate fee model will depend on the school’s individual circumstances and what support is required.
What determines the cost of consultancy support?
The level of consultancy fee is typically driven by the level of support required. This often depends on the size and complexity of the school.
For example, a small primary school with a simple menu cycle will have very different needs to a large secondary school with multiple service points, a sixth form centre, external kiosks and a complex staffing structure. Similarly, some schools require minimal guidance, while others value ongoing access to expert support throughout the duration of the contract.
Once a school has identified a consultant they wish to work with, it’s essential they fully understand the available fee models and select the one that best suits their needs.
Fee model options
1. Fixed fees and upfront percentages
One of the most common fee models is the upfront percentage or fixed fee approach. This involves the consultant being paid a set amount, often split across key milestones such as 50% upfront and 50% on completion, or 75% / 25%.
The benefit of this model is clarity. The cost is agreed before work begins, allowing the school to budget accordingly. However, it also requires the greatest capital outlay and can place pressure on short-term finances.
2. Spreading the cost: 12-month and contract-lifetime models
Where upfront capital is a concern, fixed fees can be spread over time. A common approach is a 12-month spread, where the agreed fee is divided into monthly instalments.
Some models go further and spread the cost across the lifetime of the contract, typically 36 or 60 months. This reduces immediate financial pressure, though schools should still be clear on the total fee being paid over time.
3. The ‘contractor pays’ approach: pros and pitfalls
In recent years, some consultancies have promoted a ‘contractor pays’ model, where the catering provider includes the consultant’s fee within their bid.
While this can work in practice, it is not always popular with contractors, as it can artificially inflate the perceived cost of their offer. To avoid this, schools should insist that consultancy fees are clearly itemised within financial submissions, ensuring transparency and preventing costs being hidden within broader budget lines.
4. A longer-term view: the client agent model
An increasingly popular and more progressive approach is the client agent model. Here, the consultant not only delivers the tender process but continues to provide support throughout the lifetime of the contract.
Given that catering contracts typically run for three to five years, this model encourages a longer-term relationship and ensures schools continue to benefit from specialist expertise they may not have in-house.
Under a client agent model, post-sale support can include monitoring food quality, gathering pupil and consumer insight, supporting service development, managing the provider relationship and checking invoice accuracy. When contracts come to an end, the consultant also supports the school through the re-tender process.
This allows school leaders, bursars and business managers to focus on their core responsibilities, confident that catering performance and compliance are being actively managed.
5. Sharing the gains: the mutual reward model
Another alternative is the mutual reward model. Rather than charging a fixed fee, the consultant undertakes the project in return for a share of the annual cost savings achieved. In this scenario, the consultant’s fee is effectively self-funded through the efficiencies delivered.
This approach requires confidence from the consultant that meaningful savings can be achieved. For schools, the benefit is clear: there is no upfront cost and no immediate impact on capital funds. However, over the life of the contract, the total fee paid may be higher than under a traditional fixed-fee model.
An investment, not a cost
Regardless of the model chosen, investing wisely in consultancy support can deliver significant long-term value. The insight, expertise and operational improvements brought by the right partner should far outweigh the cost of their fees.
Ultimately, transparency is key. When schools clearly understand what they are paying for and why, consultancy support becomes exactly what it should be: an investment that delivers lasting benefit.
Don’t get caught out with hidden fees – download our free guide here.
The Litmus Team
