LONDON BOROUGH OF HAMMERSMITH AND FULHAM/ROYAL BOROUGH OF KENSINGTON AND CHELSEA/WESTMINSTER CITY COUNCIL
SCHOOLS FORUM
22nd October 2012
REPORT BY THE HEAD OF RESOURCES
PROPOSAL TO REMODEL SCHOOL MEALS SERVICE ACROSS TRI-BOROUGH
1.BACKGROUND
1.1There are three different school meal services in operation across the tri-borough area of the London Borough of Hammersmith and Fulham, Royal Borough of Kensington and Chelsea, and Westminster City Council. Remodelling the school meal service across the tri-borough offers the opportunity to make more efficient use of resources and reduce contract management costs.
1.2The expectation is that a single contract would allow economies of scale for a service across three boroughs within a small geographical area, while delivering a sustained or improved quality of school meals. It is also an opportunity for schools to review spend in this area at a time when the funding formula for schools is changing.
1.3The schools Dedicated School Grant (DSG) funding is used to deliver school meals in each borough. Any savings on the contract cost will be from DSG funding and will be freed up to be spent on other school related activity.
2.SCHOOL FUNDING REFORM
2.1On 26 March 2012, the Secretary of State laid before the House of Commons a written ministerial statement on school funding reform from April 2013. Local authorities will continue to be allocated amounts for each pupil through the Dedicated Schools Grant (DSG) based on previous funding levels.
2.2The changes to school funding affect the whole of the Schools Budget, including funding for schools, academies and early years providers, central DSG budgets and also former Young People’s Learning Agency (YPLA) funding for post 16 special educational needs provision. The central priority of the reforms is to simplify the current funding arrangements.
2.3Every Local Authority is required to model a new funding formula in line with the restricted ten formula factors. The aim is to provide greater clarity and transparency of school funding and ultimately the implementation of the national funding formula.
2.4Currently all three local authorities have an individual factor within the DSG to provide for free school meals and the various levels of subsidy in the provision of meals. The new formula will not allow for a specific meals factor and the boroughs are currently developing the models for consultation with all schools at the start of the autumn term. The final date for the submission of the agreed formulas to the Department for Education is the 31 October 2012.
2.5The Tri-borough school meals remodelling project is looking to develop a consistent approach, across each borough, to address the requirements of the funding reform.
2.6Pressure on school budgets is forecast to continue with increases below the level of inflation. It is therefore vital that all services and contracts demonstrate value for money.
2.7Remodelling the school meal service across the three boroughs offers a potential opportunity to make more efficient use of contract management resources and allow for economies of scale across the three boroughs.
2.8Any savings made through remodelling the school meals service will be from within the DSG budget could then be available to fund other school related activity.
3.CURRENT POSITION
3.1The three borough’s school meals contracts are monitored and managed by five schools contracts officers who are part of the new tri-borough Children’s Services Department.
3.2All three boroughs currently use different providers for the provision of the school meals service. The table below details the current contract arrangements in the boroughs
LBHF / RBKC / WCCName of provider / Eden Foodservice / Alliance in Partnership / Chartwells
Contract end date / 3 November 2013 / 30 April 2013 / 31 August 2013
(TBC extension to April 2014)
Schools that buy into the school meal contract / 45 schools / 26 schools / 41 schools
Percentage of pupils that take/ buy a school meal / 70% / 75% / 70%
Ratio of FSM to paid meals / tbc / tbc / tbc
Contract responsibility / With the local authority / With the Governing Body of the schools / With the local authority
3.3The three current contractors deliver a combined total of over 20,000 meals per day. Based on a full school year of 187 days, this totals over 3.7 million meals per year.
3.4The following breaks down the current provision across the three boroughs:
- Hammersmith and Fulham - 45 of the 54 schools (83%) have committed to buy into the school meals service until 3 November 2013. The take up schools meals provided through the contractor at the forty five schools is approximately 8500 meals per day.
- Kensington and Chelsea - 26 of the 34 schools (76%) within the Royal Borough have committed to buy into the School Meals SLA until at least March 2013. The take-up of school meals provided through the appointed contractor at the twenty-six schools is approximately 4,300 meals per day.
- Westminster - 41 of the 56 schools (73%) have committed to buy into the School Meals SLA until 31st August 2013 (this is subject to decision to extend the contract until April 2014). The take up of school meals provided by the approved contractor is approximately 7,290 meals per day.
3.5In the short term, the key drivers for this project are to secure a school meal service as current contracts are due to expire within the forthcoming year and the need to reflect changes to the school funding formula.
3.6Schools in Hammersmith and Fulham agreed to extend their school meals contract in the 2012 summer term; and Westminster schools will be asked to consider extending their contract in the autumn 2012 term. By aligning contract dates between the three boroughs it allows the opportunity to investigate a tri-borough approach to school meal delivery at no extra cost to schools.
4.FINANCIAL ANALYSIS
4.1The total spends across the three boroughs for the provision of both free meals and the subsidy for paid meals of £9.552m is funded through the DSG. Excluded from this figure is the income generated by the contractors for paid meals.
4.2There are significant differences across the three boroughs in both the level of subsidy and the cost of providing the meal. The table below analyses the major variances:
Description / LBHF / RBKC / WCCAnnual contract spend / £4,170,469 / £2,370,630 / £3,011,035
Approx annual number of pupil meals provided / 1,634,000 / 804,100 / 1,363,800
Number of pupils claiming FSMs / 6,541 / 3,462 / 8,155
Cost per meal / £2.45 / £2.60 / £2.05
Borough’s recommended minimum price of school meal to parents/pupils* / £1.80 / £1.85 / £1.80
Level of subsidy / 65p / 75p / 25p
*see appendix 1 for charges across London Boroughs
4.2The cost of a school meal to pupils, across the tri-borough, is comparatively low compared to other areas in London and the South-East. Comparative prices range from £1.40 to £2.45 per meal, shown in Appendix A, based on September 2011 data. The boroughs of Newham and Islington have been excluded as they are part of a national pilot.
4.3With proposed changes to schools funding formula, a tri-borough this represents an opportunity to reduce the subsidy from the DSG. However, consideration will need to be given both the impact on take up of meals and the political and reputational risks from any proposed increase.
4.3Each school governing body should have regard for the Authority’s pricing policy. However, they are free to charge at the minimum contract price or have their own individual charging policy.
4.4The level of subsidy, ranging from £0.75 in Kensington and Chelsea to £0.25 in Westminster, is clearly linked to the contract price for the cost of a meal. It will be within the remit of the project to work with all stakeholders to ensure there is a balance between price and affordability in the development of the future contract specification.
4.5The contract for Kitchen Equipment Maintenance is co-terminus with the contract for the delivery of school meals. There is a proposal that kitchen equipment maintenance will be incorporated as part of the Tri borough Total Facilities Management (TFM) Contract. The budgeting and costs for this service will require to be addressed during the period of the extension and beyond. Therefore, the provision of these services will not form part of this review.
5.FINANCIAL AND LEGAL IMPLICATIONS FOR SCHOOLS
5.1As highlighted in paragraph 3.3, there are differences in contract responsibility between the three boroughs: in Hammersmith and Fulham and Westminster, contract responsibility for the school meal service is with the local authority; in Kensington and Chelsea, the contract responsibility is with the Governing Body of each school. Consistent with the local authority’s new relationship with schools, in future, the local authority would expect that schools take on contract responsibility for any new procured school meal service.
5.2The full range of financial and legal implications for schools, along with a comprehensive risk analysis, will be completed as part of the scoping work for this project.
6.equality and diversity implications
6.1Across the tri-borough area 18,158 pupils are eligible for a free school meal (FSM). Under the new funding formula proposals, FSM entitlement will be a key indicator to measure deprivation which will form the pupil premium.
6.2Specifications for school meals will be developed in conjunction with schools, utilising best practice, to meet the individual needs of its pupils.
7. NEXT STEPS
7.1Following agreement with each borough’s Schools’ Forum the project group will start to investigate with the market the potential of procuring a single school meal contract, available for all schools in the tri-borough area to take up.
7.2In October, Schools’ Forums will be asked to agree the future funding formula for schools, which will include agreed subsidies for school meals.
7.3From October onwards, the project group will work closely with schools, Governing Bodies and Headteachers to develop the project, specification, and decision making processes of a tri-borough school meal service.
7.3Following consultation with schools and Governing Bodies, the procurement process will commence from January 2013.
7.RECOMMENDATIONS
7.1The School Forum is asked to:
a) Agree to explore the development of a tri borough school meals contract from April 2014.
b) Establish a Tri borough School Working Group and propose representatives to work with officers to develop the school meals project.
c) Help ensure effective communication and consultation channels are established in each of the boroughs between all stakeholders.
ANDREW TAGG
HEAD OF RESOURCES
TRI-BOROUGH CHILDREN’S SERVICES
JOANNE HAY
HEAD OF BUSINESS DEVELOPMENT AND POLICY
TRI-BOROUGH CHILDREN’S SERVICES
Appendix A
Comparative selling Prices as at September 2011£
Islington / Free
Newham / Free
Greenwich / 1.40
Lewisham / 1.40
Lambeth / 1.70
Waltham forest / 1.75
Hammersmith and Fulham / 1.80
Westminster / 1.80
Slough / 1.80
Kensington & Chelsea / 1.85*
Havering / 1.90
Tower hamlets / 1.90
Camden / 1.95
Redbridge / 1.95
Barking & Dagenham / 2.00
Bromley / 2.00
Ealing / 2.00
Haringey / 2.00
Merton / 2.00
Surrey / 2.00
Kingston / 2.03
Barnet / 2.05
Bexley / 2.10
Croydon / 2.10
Sutton / 2.10
Brighton and hove / 2.10
West Sussex / 2.10
Wandsworth / 2.25
Hillingdon / 1.80-2.20
Brent / 1.80-2.30
Hounslow / 1.85-1.90
Richmond / 2.25-2.45
* some individual schools charge more
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