Contract caterers struggle to compete in the classroom

Outside caterers are finding it much harder to win school meals contracts, a new survey reveals.

Contract caterers suffered a 12% drop in the number of contracts held in state schools last year, with 700 fewer schools being served by outside caterers. The contracts have been taken up by local authorities' in-house caterers.

The survey, compiled by the British Hospitality Association (BHA) and the Contract Catering Forum, blames delays incurred by local authorities introducing Best Value. This has replaced the previous Government's Compulsory Competitive Tendering, which demanded lowest-price irrespective of quality.

Bob Cotton, chief executive of the BHA said that, despite the Best Value principle, many councils still insisted on the lowest possible cost before awarding contracts.

In other sectors, the biggest growth for contract caterers came from business and industry, which increased its number of catering operations by 750 to 8,766 during 1999.

Total annual turnover of the major contract caterers, which represent 90% of the industry, rose by 13.5% to £3b. Wages increased by 13.7% but are duction in the number of staff helped stem a rise in wage costs as a percentage of turnover. This rose just one percentage point to 44.4%.