Sodexo has withdrawn from its £6m Milton Keynes school contract, despite only taking it over in April this year, the contract caterer has admitted.
In a statement, Sodexo said: "We have decided to withdraw from the Milton Keynes contract as, for a number of reasons, we are regrettably unable to provide a service to the high quality standards that we set and we are not prepared to compromise these standards in the future.
"We will continue to operate the contract for a further six months and will work with the council to ensure a smooth transition to the new provider."
The deal was for three-years with an option to extend a further two and covers 73 primary schools and nine day nurseries in Milton Keynes, Buckinghamshire.
Under the original deal Sodexo, which employs 148 staff for the contract and was due to serve around a million meals a year, had undertaken to offer taster sessions to parents, teachers and pupils.
Sodexo will complete its Milton Keynes contract on 5 July 2009.
Milton Keynes Council said in a statement outlining its position: "Following discussions with Sodexo over the past few weeks and despite lengthy interaction and correspondence, Sodexo could not deliver against their own tender bid and the meal numbers have dropped significantly as a result.
"Despite substantial investment by the council in the school meals service during the mobilisation phase, Sodexo requested additional financial support from us, which was beyond the provisions of the contract.
"At a meeting with Sodexo today, the council refuted Sodexo's position. As a result, Sodexo handed council officers a letter saying they intend to terminate the contract. The timing of their termination notice, coming just before Christmas, is insensitive to schools, to children and their own employees."
The council added that its officers have started work on alternative provisions and will consult with the schools in January.
By Chris Druce
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