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DfE “surprisingly unconcerned” on whether free school meals contractor was “profiting at taxpayers’ expense”

5 February 2021

At the start of the first UK Covid lockdown in March 2020 the Department for Education (DfE) set up a national food voucher scheme quickly through its contractor Edenred so that families with children eligible for free school meals could continue to receive that support while schools were closed to most pupils.

There were serious problems in the early weeks of the scheme: Edenred’s systems failed to cope with the demand for vouchers and the volume of telephone calls and emails. Schools and parents found it difficult to access Edenred’s website and to get answers from Edenred to their queries. There were unacceptable delays in Edenred processing orders from schools and getting vouchers to families.

Performance improved after April 2020 and the DfE and Edenred have now apologised to schools and families for the problems and inconvenience they encountered, but the Public Accounts Committee reports today that DfE “focused on firefighting the problems with the voucher scheme” at the expense of actively managing its contract with Edenred. Though the contract was extended twice, increasing its value fivefold from £78 million to £425 million, DfE failed to renegotiate the terms and secure better value for money for the taxpayer in the process.

Crucially, DfE was “surprisingly unconcerned about whether Edenred was profiting from the voucher scheme at taxpayers’ expense”  and failed to use of the “open book” arrangement in the contract until the scheme had finished, failing to establish how much profit Edenred had made from the scheme until then and missing potential opportunities to reduce the cost or share in the profits. DfE declined to share details of Edenred’s profit with the PAC on the grounds of commercial confidentiality.

The extensions to the contract should have enabled the Department to consider how it could maintain the scheme as a standing resource and to tender with other suppliers. Instead, when schools were physically closed to most children again on 5 January with 24 hours’ notice the scheme was not activated again until later in January. Since its evidence session on the 17th December, the Committee has not yet had the opportunity to examine why there was a delay in re-establishing the existing scheme when schools and parents were already familiar with it.

Meg Hillier MP, Chair of the Public Accounts Committee, said:

"Whether it’s getting life-saving equipment to frontline workers or food to hungry kids in poorer families, government’s failure to learn from its repeated contracting mistakes, over and over, large and small, is costing this nation too dear.

After the initial urgency we have seen the Government continuing to play catch up on how to support families whose children are entitled to free school meals, and despite the contract with Edenred growing more than five-fold there was no discussion about tendering the contract or even renegotiating it."

Further information

Image: peter cade