School catering: improving financial efficiency
See guidance from the National Audit Office (NAO) on making your catering offer more financially efficient, and read a case study from a school that saved money by sourcing milk locally.
In-house vs outsourced catering provision
When looking to save money on your school’s catering, first check whether it’s provided in-house or by an external contractor.
If your school uses an external contractor (such as a local authority service or a private catering service), you can put the service back out to tender. A competitive tender can help you compare several catering services and find the one that can offer you the best value for money.
As part of the tender, you might ask bidders how they could improve the quality and efficiency of the catering service your school currently provides.
The National Audit Office (NAO) has produced guidance on food procurement in the public sector. Its guide to smarter food procurement sets out some pros and cons of providing catering services in-house or contracting them out (see pages 6-7).
According to the NAO, the benefits of contracting out catering include that contractors:
- Are primarily responsible for service delivery, cash handling and compliance with nutritional standards and health and safety regulations
- Should be able to negotiate better prices for ingredients
- Are likely to have better technical knowledge and catering expertise
Points against contracting out catering include that it might:
- Take significant resource (e.g. staff time) to procure and monitor the service
- Be difficult to establish how much contractors spend on ingredients or how costs are calculated
- Be difficult or expensive to get contractors to respond to specialist needs
Consider menu choices and food waste
Menu choices can have a big impact on the efficiency of your catering budget. For example, if there are lots of options and many items have low take-up, you’re likely spending money on food that’s ending up in the bin.
Streamlining the menu can help reduce food waste and save the school money.
The guidance from the NAO, linked above, has a section covering the efficient use of purchased food (page 25). Questions to consider when designing a menu include:
- Does the menu consist of long-running cycles of dishes (enabling bulk purchasing)?
- Does it take advantage of seasonally available produce (and avoid items that are out of season and therefore expensive to buy)?
- Does it always use costed recipes?
Supplies and suppliers: finding efficiencies
Look at what contracts you’ve already got with catering suppliers, to make sure you’re getting value for money.
If the school uses many different suppliers, you may be able to reduce costs and simplify admin by procuring all the supplies you need from one supplier (see NAO guidance linked above, page 4).
Be aware of false economies
Don't always choose the cheapest option for goods and services – think about the ‘whole life’ cost (see page 14 of the NAO guidance).
Buying cheaper ingredients may mean more wastage and ultimately less value for money than using higher-grade ingredients.
Think about your staffing needs
Staffing costs are a big part of school catering budgets – and an overstaffed kitchen is financially inefficient.
For example, if your school offers too many menu options, this creates more work, which needs additional staff. Streamlining the menu can help reduce the number of staff you need, or the number of hours those staff need to work.
Look at the budget for staffing the catering service, and see if the staffing structure can be reorganised to create efficiencies.
Review your pricing structures
Assess your pricing structures to ensure that you’re covering the costs of the meals you provide.
You should check to make sure that you’re not providing free or discounted meals to pupils who are ineligible.
Using joint purchasing arrangements
Joint purchasing could save you money through:
- Lower food prices due to increased purchasing power
- Higher discounts due to increased volumes
- Reduced procurement and administrative costs
This is covered on page 16 of the NAO guidance.
Multi-academy trusts (MATs) and federations of schools are well-placed to use joint procurement strategies, both for food and for other catering services, because they have shared governance structures.
However, schools outside of MATs or federations can also set up joint procurement arrangements. Groups of schools in the same geographical area can sometimes save money by reducing transport costs.
Primary schools can often benefit by entering into joint procurement arrangements with secondary schools, because secondary schools are often larger and have greater buying power.
Achieving catering savings: case study
We spoke to Kai Muxlow, the school business manager at Kaizen Primary School, about how the school has saved money on school catering. Kaizen Primary School is a community school in Newham.
Kai told us that the school managed to save £10,000 by switching from cartons of milk to using bottles provided by a local dairy wholesaler.
He explained that initially the school did not have much time to prepare for the requirement to provide milk for all pupils. As a result, it did not have enough time to source the milk at the lowest possible price.
The contract the school entered into involved buying enough cartons of milk for each pupil, with many of these going to waste.
To save money, and prevent waste, the school approached a number of local shops for information about dairies and dairy wholesalers who supply the local area. The school then approached these wholesalers to see if they could procure the milk it needed at a lower price.
Kai said that the school now has a supply arrangement in which milk is delivered to the school twice a week in large bottles. Pupils can then pour the milk from the bottles into cups. This allows pupils to take only the amount of milk they want, rather than giving them a whole carton that they may throw away.
At the end of a week, the school can also sell any unused volumes of milk back to the wholesaler.
Kai recommended that schools review their contracts regularly, and speak to relevant local businesses, who may be able to recommend suppliers.
Martin Owen is a chartered accountant (CPFA). He has more than 20 years' experience working with academies and schools to improve their governance, leadership and management of financial, business and operational processes.