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CHAPTER 6: THE IMPACT OF THE FREE SCHOOL MEAL TRIAL ON THE COSTS OF PROVIDING SCHOOL MEALS
Key points
One of the reasons for selecting the five particular authorities involved was that they were each operating in a different context. The costs reflected this and should not therefore be read as an assessment of the efficiency of different areas in implementing the trial, but as a guide to the range of costs incurred by local authorities in different circumstances.
The estimated costs of the trial varied widely from £1.79 per additional meal in Fife to £4.65 in Scottish Borders.
Costs tended to be higher in areas with a higher percentage increase in uptake, i.e. where more fundamental changes needed to be made to staffing and equipment levels.
Costs also tended to be lower in areas where the total number of additional meals served was higher - perhaps where there was more scope for economies of scale to reduce some of the costs.
6.1 This chapter looks at the additional costs incurred by the local authorities in implementing the provision of free school meals for P1 to P3 pupils. One of the reasons for selecting the five particular authorities involved was that they were each operating in a different context - in terms of size of local authority, levels of deprivation, urban/rural mix, size of schools, previous levels of uptake and structure of school meals provision - and so faced different challenges. The cost estimates discussed below should not therefore be read as an assessment of the efficiency of different areas in implementing the trial, but as a guide to the range of costs incurred by local authorities in different circumstances.
6.2 Each area provided the research team with the additional costs (beyond what would normally be spent on school meals) incurred as a direct result of the trial and the associated increase in uptake. Costs were provided under the broad headings of food, staffing, equipment and marketing/publicity 23. There were no unexpected costs which did not fit under one of these headings. Both revenue and capital costs 24 are included.
6.3 Food costs are clearly on-going. However, as was pointed out by one local authority catering manager, the knowledge that free school meal provision was to continue (and therefore that uptake levels would remain at a higher level) might enable a renegotiation of contracts with food suppliers.
6.4 Roughly 90% of staffing costs are on-going costs for kitchen staff (around 62%) and for supervisory staff (around 28%). The remaining 10% or so of staffing costs are for management and administration. Some of these management/administration costs will be on-going but a proportion will have been one-off costs incurred in implementing the initiative. 25
6.5 The equipment costs are largely one-off (although there will, of course, be higher levels of replacement costs over time). Around 45% of the costs were for crockery, cutlery and other 'light equipment' and roughly 55% of the costs were spent on kitchen equipment and dining furniture.
6.6 It is perhaps harder to gauge the extent to which the marketing and publicity costs are on-going. Hungry for Success has generally led to increased publicity and information on school meals, and if universal free school meals for P1 to P3 pupils were to be rolled out, marketing and publicity on that aspect would presumably be incorporated into that. If any roll-out in other areas were to take place at the start of a school year in August, this would enable publicity about the fact the meals were free to be incorporated into other information given to parents on school meals and school life in general.
Total additional costs
6.7 The total additional costs, for the first 100 school days 26 of the trial in each area - i.e. from the start of the trial on 22 October 2007 (in East Ayrshire, Glasgow and West Dunbartonshire) and 29 October 2007 (in Fife and Scottish Borders) to around 31 March 2008 - are shown in figure 6.1 and generally reflect the size of the local authority. It should be noted that the first 100 days costs are likely to be significantly higher than subsequent periods because they will include many capital costs which will not be ongoing (investment in equipment etc.). Also, in three of the five areas, there was a slight decrease in uptake after the initial big increase, so slightly more additional meals will have been served in the first 100 days than in subsequent periods.
Figure 6.1: Total additional (revenue and capital) costs incurred by each area over the first 100 school days of the trial (Late October 2007 - 31 March 2008)
6.8 On top of the additional costs incurred, there is also the loss of income from the pupils who previously paid for school meals. The estimate of the loss of income (based on pre-trial survey figures among non- FSM registered P1-P3 pupils extrapolated over 100 days) is shown in table 6.1.
Table 6.1: Estimate of loss of income from meals over first 100 days of the trial (Late October 2007 - 31 March 2008)
| Number of P1-P3 meals per day previously paid for
(pre-trial survey uptake data) | Charge for a meal | Loss of income over first 100 days |
|---|
Fife | 3,729 | £1.55 | £577,995 |
|---|
Glasgow | 4,888 | £1.15 | £562,120 |
|---|
Scottish Borders | 1,048 | £1.60 | £167,680 |
|---|
East Ayrshire | 875 | £1.56 | £136,500 |
|---|
West Dunbartonshire | 847 | £1.47 | £124,509 |
|---|
Note: Ipsos MORI calculations based on uptake levels of non- FSM registered pupils in pre-trial survey and late February 2008 survey.
6.9 More informative, however, is the total additional cost per additional meal served 27 (illustrated in figure 6.2). This has been calculated by dividing the total additional costs in each area by the number of additional meals served (based on the pre-trial and late February 2008 survey uptake figures for all P1-P3 pupils). Again, because these costs relate to the first three months or so of FSM for all P1-P3 pupils, they are likely to be higher than subsequent periods because they will include many capital costs which will not be ongoing. Also, the number of additional meals served may be a slight underestimate because they are based on the late February 2008 survey, by which time the uptake in three areas (East Ayrshire, Glasgow and West Dunbartonshire) had decreased slightly from the initial big increase.
6.10 This varies hugely, from £1.79 in Fife up to £4.65 in the Scottish Borders.
Figure 6.2: Total additional cost (revenue and capital) per additional meal served
6.11 As noted above, each authority is operating in different circumstances and the increase in uptake, as a proportion of the pre-trial percentage uptake, appears to be linked to the costs. This is not surprising as areas where the relative increase in uptake is higher are likely to have to make more fundamental changes (to staffing and equipment in particular) and this will be reflected in the costs.
6.12 Figure 6.3 shows the relationship between costs and the relative increase in uptake. Scottish Borders had the highest costs but also the biggest increase in uptake, relative to pre-trial levels (uptake increased from 37.3% to 67.0% for all P1 to P3 pupils, which is a 79.6% increase). In contrast, Glasgow had lower costs and the smallest increase in uptake, relative to pre-trial levels (uptake increased from 62.8% to 77.8% for all P1 to P3 pupils, which is a 24% increase). Fife's costs were relatively low compared with the percentage increase in uptake.
Figure 6.3: Total additional cost per additional meal served by percentage increase in uptake28
6.13 Another factor is the scale of the operation: the larger the number of additional meals served, the more opportunity there is for economies of scale to reduce the costs ( e.g. in relation to buying equipment in bulk or negotiating contracts with food suppliers). Figure 6.4 below illustrates the relationship between the total additional cost per additional meal served and the absolute number of additional meals served. In general, the areas with the highest number of additional meals have the lowest additional costs per additional meal.
Figure 6.4: Total additional cost per additional meal served by number of additional meals served
6.14 Figure 6.5 below shows the contribution of the different cost elements (food, staffing, equipment and marketing) to the total additional cost per additional meal. As noted above, each area will have categorised certain costs differently so this data should be treated as a rough guide only. Costs incurred under the different headings are discussed in more detail below.
Figure 6.5: Contribution of food, staffing, equipment and marketing costs to total additional cost per additional meal served
Food costs
6.15 The food costs per additional meal vary considerably (shown in figure 6.5) and there appears to be no pattern in relation to the percentage increase in uptake or the number of additional meals served.
Figure 6.5: Food cost per additional meal served
Staffing costs
6.16 The additional staffing costs per additional meal served also vary (shown in figure 6.6). They are broadly similar in three of the areas, ranging from 73p to 90p in East Ayrshire, Glasgow and Fife.
6.17 Scottish Borders had a particular issue with staffing levels, having had a low level of previous uptake and a large number of small schools (so one additional person in a school might double the staffing). This, in part, explains their relatively high additional staffing costs per additional meal. Scottish Borders also increased staffing (initially) on the assumption that P1 to P3 uptake might reach 85%. The uptake in the late February 2008 survey was actually 67% so there was some over-staffing in places until fixed-term contracts ended or hours could be reduced again.
6.18 West Dunbartonshire on the other hand, which had one of the lower increases in uptake and the lowest number of additional meals in total, was able to manage with their existing staffing with very few new posts.
Figure 6.6: Additional staffing cost per additional meal served
6.19 Examining the data, there does appear to be a link between the percentage increase in uptake and the additional staffing costs per meal (shown in Annex 2, figure A2.1).
6.20 However, there does not appear to be a direct relationship between the additional staffing costs and the number of additional meals served. Unlike the costs of food and light equipment (crockery and cutlery), which might be expected to increase in direct proportion to the number of additional meals served, staffing costs will be more stepped: a certain number of additional pupils will make no difference to the staffing levels but when uptake reaches a certain point, one additional pupil might require a new member of staff. Since the numbers of kitchen and supervisory staff in any one school are low (typically three or four kitchen staff and one or two supervisory staff), one additional member of staff represents a significant increase. The requirements will also vary across schools. As one catering manager pointed out, some schools may have been running with some spare capacity and could cope with a considerable increase in uptake without requiring any more staff. Others may already have been stretched and even a very small increase might require additional staff.
Equipment costs
6.21 Equipment costs cover light equipment such as crockery and cutlery, dining furniture and kitchen equipment. They also vary widely, from 16p per additional meal in Fife to £1.23 in Scottish Borders (see Figure 6.7). Again, costs tend to be higher in areas where the percentage increase in uptake was higher (see Annex 2, Figure A2.2) and lower in areas serving more additional meals. As with staffing, West Dunbartonshire (which had one of the lower percentage increases in uptake and the lowest number of additional meals in total) reported that they were generally able to manage with their existing equipment.
Figure 6.7: Additional equipment cost per additional meal served
Marketing and publicity costs
6.22 In three areas (Glasgow, Fife and West Dunbartonshire), the marketing and publicity costs were around 1p per additional meal. They were significantly higher in East Ayrshire (12p) and Scottish Borders (10p). East Ayrshire and Scottish Borders did see the biggest percentage increase in uptake and this may, in part, be a reflection of their investment in marketing: Scottish Borders sent 'several' letters to parents and East Ayrshire sent two 'nicely produced' leaflets to parents in advance of the trial (one around 6-8 weeks in advance and one just before it started). Staff in both Glasgow and West Dunbartonshire felt that they might have benefited from more publicity . However, Radio Clyde provided free promotion of the initiative in Glasgow so it would be simplistic to make too much of the relationship between marketing/publicity spend and uptake. Similarly, it would be simplistic to equate spend with levels of marketing/publicity activity. Fife, for example, kept costs to a minimum by using schools to publicise the trial and issuing press releases to local media.
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