(Schools Forum Decisions and Consultation – 13th January 2016)
Schools Forum Decisions and Consultations
– 13th January 2016
Item: 4
Provision of School Meals – Central Production Kitchen
Lead Officer/Author: Julia Ridge / Phil Curd
Contact Details: 01823 357633 or jaridge@somerset.gov.uk
This paper follows on from a paper originally submitted to
Schools Forum in December 2015 and is designed to provide
the additional information requested at that time.
Summary:
The paper recommends that Schools Forum works with the
Local Authority to secure catering equipment at the Central
Production Kitchen (CPK) in Taunton, ensuring this vital facility
continues to be functional resource for schools across Somerset.
Recommendation for decision:
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Recommendations:
Reasons for
Recommendations:
That Schools Forum authorises the release of financial
resource and allows Local Authority to negotiate with
BAM and utilise funding to buy all of the catering
equipment within the Central Production Kitchen, securing
it as a fully equipped resource for Somerset’s schools.
Termination of the existing contract would see BAM, as the
owner, vacate the Central Production Kitchen and remove all
catering hardware. This would result in a purpose built facility
being unable to fulfil its function.
It is unlikely that a new tenant could be found to occupy an
unequipped, vacant kitchen facility due to the initial investment
required and the lack of profitability (return on investment) in the
provision of school meals.
Links to Priorities
and Children and
Young Peoples
Plan:
The Schools Budget supports the Enjoying and Achieving aim
within the Children’s Plan.
Financial
Implications:
The funding options are set out in Section 3.2.
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1.
Background
1.1
Somerset’s schools have 30 providers producing circa 25,000 meals a day:
 Edwards & Ward is the major supplier using school production kitchens
serving 55 schools with 6,500 meals per day. This contract is coming up
for renewal in September 2016
 BAM use a central kitchen with finishing hubs and serve 27 schools with
2,000 meals per day, this contract is available to schools until 2019.
 34 schools run their own in house catering providing around 10,000 meals
a day.
 141 Schools 28 other suppliers providing circa 16,500 meals a day.
1.2
BAM has placed a value of £52,000 on the catering equipment at the Central
Production Kitchen. It is made up of:
 £41,000 in heavy equipment (hardwired and/or is plumbed in to gas,
water, drainage)
 £11,000 in light equipment (vacuum sealers, etc)
The prices were ‘open book’ costs from the suppliers when the kitchen was
brought on-line in January 2015.
1.3
BAM is aware that the Local Authority is discussing the possibility of securing the
catering equipment with Schools Forum.
1.4
SSE has been carrying out termly inspections of the catering equipment to
ensure BAM has been maintaining it. No issues have been identified to date.
1.5
BAM has to give 3-months’ notice if it wishes to be released from the contract.
1.6
BAM is declaring an £80,000 plus loss on their SCC business for 2015 (January
– December) and it is expecting to lose a further £40,000 during of the first 9
months of 2016. This is information has been provided to SSE by BAM’s
Operations Director.
2.
Issues
2.1
The CPK is producing circa 2,000 meals a day which is below the circa 3,000
meal level expected in the first few years, meaning that the operation is not as
viable for the operator.
There is a risk that they may choose to give notice, putting the provision to the 27
schools at risk. Those schools are:
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Ashlands
Curry Rivel
St Louis
Merriott
Shepton Mallet infants
Hindhayes
St Gilda’s Catholic Primary
Kingsmoor
East Huntspill
West Huntspill
Ashill
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Middlezoy
Othery
Martock C of E Primary
All Saints, Montacute
Norton Sub Hamdon
West Chinnock
Wellsprings Primary
Curry Mallet
Stoke St Gregory
Hatch Beauchamp
Charlton Hawthorne
East Coker
St Marys & St Peters
Shepton Beauchamp
Penn Mill Infants
Reckleford
2.2
Along with the CPK, SCC also built a hub finishing kitchen in Somerton which
works with the CPK to distribute the meals around the County. If the CPK closes
so will this kitchen.
2.3
Although the Local Authority cannot give a subsidy to any service provider, It is
clear that a supplier of these 2,000 plus meals a day is needed and that the Local
Authority needs to continue to support the market by providing a fully-equipped
CPK.
2.4
Whilst the Local Authority does not have to provide the service it has a statutory
duty to ensure that there are sufficient providers of service for schools to access.
The procurement of meals is a governing body responsibility.
3.
Options
3.1
There are various sources of funding that can be utilised to purchase the catering
equipment at the CPK:
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3.2
DFCG & DSG Revenue contributions from the 27 schools currently
serviced by the CPK
DFCG Surplus (£24k)
DSG Reserves
These sources of funding can be used to create a number of different options:
Option 1
The 27 schools serviced by the CPK are asked for a contribution from their
DFCG or DSG Revenue funds. The contribution will be a proportion of the cost of
purchasing the catering equipment, calculated on the size of the schools’
respective pupil populations.
If the schools refuse to contribute in order to secure the catering equipment at
the CPK, there is a risk that should BAM give notice on its contract, those
schools will have to go through a procurement exercise to find a new supplier of
school meals in a market that is not particularly buoyant.
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It would also leave the CPK unequipped and unattractive to any potential
occupants having a further impact on the market.
Option 2
£24k of DFCG surplus could be used to underpin the purchase of the catering
equipment with the shortfall being made up from DSG reserves.
This will remove the risk of any or all of the 27 schools refusing to contribute and
will secure the catering equipment and a fit for purpose CPK for the ongoing
provision of school meals.
Option 3
A combination of school contributions, DFCG surplus and DSG reserves are
used to fund the purchase of the catering equipment.
Although school contributions are likely to be relatively small, the risks from
Option 1 remain.
3.3
Should the catering equipment be secured, the Local Authority will utilise SSE to
monitor the ongoing condition of the catering equipment in order to guard against
misuse and poor maintenance.
4.
Consultations Undertaken
4.1
An initial discussion took place with Schools Forum in December 2015. At that
time, Schools Forum required more information which has been addressed in this
paper.
5.
Risk & Mitigation
5.1
BAM retaining ownership of the catering hardware at the CPK leaves Somerset’s
schools vulnerable in terms of the ongoing provision of school meals.
5.2
Should BAM give notice on the contract and vacate the premises, the Local
Authority would be left with empty, unequipped premises that would not be
attractive to catering contractors in the future. This will have an impact on the
market and limit choices available to schools in the future.
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