With ever-tightening budgets, school leaders are constantly on the lookout for ways of improving financial efficiency. We spoke to chartered accountant and business consultant Martin Owen to get his advice on improving efficiency in a school’s catering budget.
In-house vs outsourced catering provision
Martin explained that the first consideration when looking for efficiencies in the catering budget is whether the school’s catering is provided in-house or by an external contractor.
If the school uses an external contractor (such as a local authority service or a private catering service), it can put the service back out to tender. A competitive tender can help schools compare multiple catering services and find those that are providing best value for money.
He added that, as part of the tender, schools might ask bidders how they could improve the quality and efficiency of the catering service the school currently provides.
In 2006, the National Audit Office (NAO) produced guidance on food procurement in the public sector, which sets out some pros and cons of providing catering services in-house or contracting them out. For example, the benefits of contracting out the catering service include:
- Contractors are primarily responsible for service delivery, cash handling and compliance with nutritional standards and health and safety regulations
- Contractors should be able to negotiate better prices for ingredients
- Contractors are likely to have better technical knowledge and catering expertise
However, points against contracting out catering include:
- It may be difficult to establish how much contractors spend on ingredients or how costs are calculated
- It may be difficult or costly to get contractors to be responsive to specialist needs
- Where contract terms are inflexible (for instance, nutritional standards), changing requirements can leave organisations vulnerable to price increases
Consider menu choices and food waste
Martin explained that the choices that a school places on the menu can have a large impact on the efficiency of the school’s catering budget.
For example, if the school has too many options on the menu, and many items have low take-up, the school is likely spending money on food that is ending up in the bin.
Streamlining the menu can help reduce food waste and save the school money on the cost of supplies.
Supplies and suppliers: finding efficiencies
Martin advised that it is important to ensure that you get value for money for catering supplies, and this will require looking at contracts for different suppliers.
If the school uses multiple suppliers, it may be possible to reduce costs by procuring all of the necessary supplies with one supplier.
Consider your staffing needs
Staffing costs have a large impact on school catering budgets and some school kitchens are overstaffed. This may be related to the service the school is providing. For instance, if schools are providing too many menu options, this creates additional work that requires additional staff. Streamlining the menu can help reduce the number of staff the school may need, or the number of hours those staff need to work.
Schools should look at the budget for staffing the catering service, and see if the staffing structure can be reorganised to create efficiencies.
Using joint purchasing arrangements
Joint purchasing can lead to savings through:
- Lower food prices due to increased purchasing power
- Higher discounts due to increased volumes
- Reduced procurement and administrative costs
Martin explained that multi-academy trusts (MATs) and federations of schools are well-placed to use joint procurement strategies, both for food and for other catering services, as a result of shared governance structures.
However, he said that 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.
He added that 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.
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