The Department for Education has admitted that it “should have looked at” renegotiating its controversial contract with free school meals voucher provider Edenred.

The deal was twice extended when its value increased from £78 million to £234 million and then to £425 million.

But MPs on the Commons Public Accounts Committee today heard that the DfE was more interested in ‘trying to make the contract work”.

Committee member Sir Geoffrey Clifton-Brown asked the DfE’s permanent secretary, Susan Acland-Hood: “This was a big chunk of taxpayers’ money - did it not occur to you that you might try to renegotiate?”

She said: “I think if we had the time again, it is certainly something we should have looked at.”

Read: DfE U-turn over funding free school meals in half-term

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Background: Vouchers for FSM pupils backed by DfE

The vouchers scheme was widely criticised in the early stages after its launch when many schools and families across the country struggled to get the vouchers worth £15 each per child per week - as headteachers and school business managers spent hours on the phone or online trying to obtain them.

Coronavirus: Criticism of free school meal vouchers scheme

And the National Audit Office this month revealed how the government knew of “risks” with Edenred and “placed substantial reliance” on the firm, yet had “limited evidence about its capacity to deliver the voucher scheme to the pace and scale required”. 

Committee member Sir Geoffrey acknowledged that the contract was “working reasonably well by June”.

He asked Sarah Lewis, the DfE’s director of early years and schools strategy: “Did you not [by then] have any discussions with Crown [Commercial Service] agents as to whether the terms of the contract should be renegotiated?”

She replied: “I’m not aware that we did. Our focus was entirely on trying to make the contract work.”

Meanwhile, the DfE is refusing to say how much profit was made by Edenred in the contract to supply free school meal vouchers to around 1.4 million pupils after schools closed in March.

MPs also heard how Edenred made money from the scheme by buying vouchers at a discount to their face value from supermarket chains 

Committee member Craig Mackinlay asked Edenred UK chief executive Johann Vaucanson if he could give “a broad outline of the percentage discount” the firm received on the vouchers, but Mr Vaucanson said: “Unfortunately, we cannot release [details of] any commercial arrangement we have with a retailer.”

Sir Geoffrey also told Ms Acland-Hood it was a “reasonable question in terms of transparency” to ask what was the profitability at each of the three stages of the “open-book contract”.

He said: “Given that Cabinet Office guidance says that in open-book contracts, transparency is absolutely the key  - I accept this was in the middle of a pandemic and you had emergency powers - but I still think it’s a reasonable question.”

Ms Acland-Hood said: “I’m very sorry but, as Mr Vaucanson has said, there are commercial confidentiality concerns which mean I can’t tell you what Edenred has told us about their profitability.” 

She added: “What I can say in respect of what Edenred have been able to share with us on their profit is that... I am very comfortable with the level of profitability in this contract. It does not give me any cause for concern.”