Caterers are being forced to pull out of school meals contracts because increasing regulations and public expectation are making the sector commercially unviable, experts have claimed.
The stark warning came after the sector's biggest school meals provider, Compass-owned Scolarest, announced it would be pulling out of its 10-year contract with the Royal Borough of Richmond from next month after six years, as it was unable to agree commercial terms.
The caterer, which feeds pupils at 45 schools in the London borough, is also pulling out of a mammoth county-wide contract for 172 schools in Bedfordshire for the same reason.
A Scolarest spokesman said: "It's fair to say that commercial viability of the school meals contract within Richmond has always been challenging. We've introduced menus that meet the school meals] guidelines but we can not continue to support the service provision in the longer term without further investment."
However, a Richmond council source said a fall in school meals uptake from about 30% to 22% had played its part, adding: "The reality is, if parents want better meals, they need to pay a more realistic price. Ultimately we still need more money from government for both food and capital investment in facilities, which many schools do not have."
School meals consultant Julian Edwards warned that Richmond was not an isolated case and that there were increasing instances of early completion of contracts and a lack of tenders for large school meals contracts.
"Most caterers say the reason for this reticence is that councils want too much investment and the caterer to take all the risk," Edwards said.
With increased prohibition on cakes and the removal of confectionery from vending machines this summer set to take away yet more catering revenue, redundancies are now anticipated.
Food service consultant Roger Denton said bigger players were cherry-picking contracts as further regulation squeezed profits. "This is going to lead to fragmented provision in many areas, which is a bad thing," he warned.
By Chris Druce
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