Private companies are keen to capture a slice of the school catering contract pie. Shirley English reports. The humble school dinner continues to be a major battleground between council-run services and private business. Providing the best, and the cheapest, school meal - whether its mince and lumpy mash, pizza and chips or traditional treacle pud and custard - is big business for catering firms.
Increasingly, private companies are keen to capture a portion of a service, which before compulsory competitive tendering (CCT), was solely dished up by local councils.
South of the border lucrative catering contracts have been snapped up by private companies who have been able to outbid council-run direct service organisations (DSOs).
In Scotland, however, the outcome of six years of CCT has not been so dramatic. But that does not mean the private sector has turned up its nose at a Scottish schools market, worth an estimated Pounds 75-80 million, with a potential customer base of more than 720,000 pupils.
The Bridge of Allan-based catering firm Commercial Catering Group (CCG) is one of two private companies that has successfully bid for Scottish CCT catering contracts.
CCG is the largest private caterer working in Scotland’s state sector, providing a meals service to 107 primary and 24 secondary schools in the Western Isles and the Scottish Borders.
Both councils have made approving noises about the company’s performance. The only blemish on its reputation, so far, was when it pulled out of a Pounds 20 million, five-year contract with the old Lothian Region, at the last minute. The company, founded by a Glaswegian chef, Frank Bell, in 1964, was eventually sued by Lothian and had to pay Pounds 600,000 compensation last July.
But CCG appears to have impressed Scottish Borders and the Western Isles and it holds 13 catering contracts in England. The Western Isles awarded a five-year catering contract to CCG in August 1994 and in a recent progress report to the education committee said that now that teething problems had been smoothed over, performance was “good and all necessary contract standards are being met”.
Both councils admit they have not recorded any increased uptake in school meals since CCG arrived. The numbers opting to eat in the school canteen have remained steady at 30 per cent in the Scottish Borders and 67 per cent in the Western Isles.
The threat of private competition from big companies like CCG has forced Direct Service Organisations (DSOs) to respond imaginatively.
The reorganisation of local government this month hasresulted in the break-up of large councils and their correspondingly large DSOs. Strathclyde’s Catering Direct - which was the fifth largest catering company in the UK with a Pounds 40 million contract - has now been split into 12 smaller units. But to retain a competitive edge, efforts have been made to keep the economies of scale which Catering Direct enjoyed.
The 12 successor councils of the old Strathclyde Region have formed an Authorities Buying Consortium (ABC) - a cross-boundary committee based at Renfrewshire Council - which will be responsible for buying goods in bulk.
School catering will account for about 10 per cent of ABC’s work and Fergus Chambers, Catering Direct’s former depute director, claims the consortium will slice millions of pounds off the new authorities’ catering bills.
Mr Chambers, who is now director of catering, cleaning and janitorial services at Glasgow City Council, believes DSOs have the expertise to compete successfully for school catering contracts when they come up for tender again in 1998.
A Government moratorium on CCT is in place, which has temporarily suspended compulsory tendering requirements because of local government reorganisation. The moratorium will end for school catering in July 1998.
“There is an argument that the smaller the unit, the easier it is to pick off by the private sector,” Mr Chambers said. “But in-house service providers are continuing to become much more commercial, with branding concepts, healthy eating packages and promotions and marketing, to complement what is a very successful and well-respected service.”
Other innovative ideas aimed at increasing take-up of school dinners include special swipe cards introduced by the old Highland Region. The project, whereby pupils pay for dinners using a school meal “credit card”, boosted the numbers by 30 per cent in the initial pilot. It has also reduced bullying, because pupils do not need to carry extortionable dinner money.
