13th PAC Report 2006-07
Smarter food procurement in the public sector
Edward Leigh MP, Chairman of the Committee of Public Accounts, today said:
“For too long, the food served in public sector institutions has been institutionalised food. Now, all over the country, people are starting to recognise, especially in the case of school lunches, that meals should be healthier and more appetising. Reconstituted turkey burgers are starting to be consigned to the dustbin of history.
“Initiatives are under way to attempt to raise the standard of the food served in schools, hospitals and the bases of our armed forces. Perhaps an even greater difficulty is persuading the customers to want to eat better food. The Department for Education and Skills will have to show that it is making measurable progress in these areas.
“This doesn’t have to be at the expense of the taxpayer or the small producer. Better, more cooperative ways of procuring food can achieve improved value for the public sector while also benefiting local economies. And negotiations with major contract caterers should be much more hard-headed, especially over the hidden rebates and discounts which those caterers can achieve but too often fail to pass on to the public sector.
“Acting on these recommendations could save an annual £220 million by 2011. This amounts to a whole lot of cash and resources which could be applied to raising the standard of public sector food and catering services. So everyone wins - except perhaps the major contractors whose profits might be a little slimmer.”
Mr Leigh was speaking as the Committee published its 13th Report of this Session. This report, on the basis of evidence from the organisations responsible for the three largest areas of public food expenditure (the Department for Education and Skills; the Ministry of Defence; and the NHS Purchasing and Supply Agency) examined how the public sector can deliver healthier food at better value
The public sector in England spends some £2 billion annually on food and catering, mainly in schools, hospitals, armed services bases and prisons. The quality and value for money of food are of concern to the millions of adults and children who consume it. Healthy and appetising food also has an important role to play in the long term health of school children (including the need to reduce levels of obesity), improved NHS patient recovery rates and maintaining the operational effectiveness of the armed services.
In recent years there have been a range of initiatives to improve standards in public food and catering services. In particular, the Department for Education and Skills has established new standards (mandatory from September 2006) specifying the types of food to be served for school lunches. To help implement these new standards the Department has committed additional funding to local authorities and schools (£220 million over three years from September 2005, and a further £240 million over three years from 2008-09).
Public bodies can significantly improve the efficiency of their food procurement freeing up resources for reinvestment in higher quality food and catering services. Over £220 million in savings are achievable by 2010-11 through a range of actions including obtaining more competitive prices for the same food items, increasing levels of joint purchasing, developing frontline procurement and catering expertise, and increasing levels of take-up (particularly in the school meals sector). It is also possible to improve standards and efficiency, while also sourcing ethically and enhancing sustainability.
On 1 October 2006 the Ministry of Defence awarded its main £300 million five year food contract to Purple Foodservice Solutions. The Ministry expects to generate savings of £19.4 million over the life of the contract. Also on 1 October 2006, the Department of Health outsourced to the logistics company, DHL, the procurement and delivery of some £3.7 billion of healthcare products (including food) to NHS Trusts. The deal is expected to deliver over £1 billion in savings over the ten year contract.
Notes for Editors
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