With rising food inflation, increasing operational costs, and the Government’s recent 5p increase to Universal Infant Free School Meals (UIFSM) – an amount far below what’s needed – it has become unviable for some Local Authorities (LAs) to continue offering school catering services.
In December 2024, Hampshire County Council announced plans to outsource its school meals service, while earlier in the year, Cheshire East Council confirmed it could no longer afford to run its loss-making service.
When faced with the withdrawal of an LA-provided catering service, schools must act quickly to find a new provider. But what options are available? And how can schools ensure affordability without compromising on food quality for pupils?
Exploring the options
Mike Neales, Senior Consultant at Litmus, who has over 30 years of experience in the Education sector, explains:
“There are three options available to schools. First, they can panic – but we strongly advise against that! Second, they can go out to tender independently, which is a possibility. However, the third -and, in our experience, most effective – option is to form a cluster and go out to tender as a group.
“By clustering with other schools to form a larger group, schools can benefit from greater purchasing power, which makes them more attractive to catering companies seeking high volumes. A single small primary school with 175 pupils cannot match the influence of a cluster of 50 schools with 8,750 pupils.
The benefits of clustering
“Alongside clustering demanding higher interest and better purchasing power from bidders than a single school, it also aids achieving economies of scale with regards to tender management fees. Whilst each school will incur its own amount of project related work, the core project set-up does not need to be duplicated across all of the schools, therefore resulting in cost efficiencies.
“In addition, schools have also said they appreciate the opportunity to network across the schools within the cluster, forming business leadership groups.”
Streamlining the process
Mike continues: “We’ve supported schools across the country in forming clusters and successfully tendering for catering providers. For example, we recently completed our 11th cluster project in Cornwall, involving 60 schools from Multi-Academy Trusts and free-standing institutions.
“While clustering offers significant benefits, it isn’t without challenges. Coordinating 30, 40, or 50+ schools, managing the tender process, and securing a catering partner requires substantial time and effort. This is where working with an experienced consultant can make a huge difference
“An expert can streamline the process by handling the complexities of tendering, such as managing timelines, reviewing proposals, evaluating cost fairness, and assessing service quality. Additionally, benchmarking against industry data ensures schools receive the best value in terms of both cost and quality.
Flexibility within contracts
“When schools in a cluster enter into contracts with a catering provider, each school signs an individual agreement rather than a collective cluster-wide contract. This approach offers autonomy, allowing schools to extend, amend, or terminate their contracts as needed in the future.
Clusters beyond geography
Mike adds: “Clusters don’t need to be limited by geography. By partnering with a nationwide catering provider, schools across the UK can collaborate to form a cluster. This approach broadens the possibilities for schools to benefit from collective bargaining power.”
How we can help
Managing a clustering project requires leadership to bring schools together, navigate the tendering process, and ensure individual catering requirements are met. If your LA has withdrawn its school meal service and you need a new catering provider, Litmus is here to help.
Contact us here to find out how we can support your school in securing a high-quality, cost-effective catering solution.
The Litmus Team