Agenda item

The Scrutiny Board is requested to note the Call-in request and to consider confidential recommendations, in the report, which were approved by Cabinet on 18^th November 2024 and which were subsequently call-in by Councillors Kenyon and Al-Hamdani.

The Calling-in Member addressed the Scrutiny Board and explained the reasons why they have called-in the Cabinet’s decision. The Calling-in Member suggested that there was not enough information provided in the report in several areas including benchmarking from other authorities and commercial providers. The Member also suggested that not enough analysis had been done on the impact of the decision on local supply chain and local wealth building. He indicated that the risk was being transferred to schools and their budgets and that no survey or analysis had been done on schools’ capacity to take on the additional responsibility.

Next, the Cabinet Member for Education addressed the Board explained the background for the decision. The Board heard that there are several issues being faced by the service including soaring food inflation, labour costs and the number of schools purchasing the service expected to reduce over the coming years. The Association for Public Service Excellence were commissioned to undertake an evidence based independent review of the Councils catering service. The outcome of the review was the recommendation of a managed transition of school catering to each individual school providing local freedom and flexibilities in how the menu is designed and service is operated.

The Director of Economy presented to the Scrutiny Board some additional detail behind the decision highlighting key points;

·       The Current Oldham Education Catering Service is a trading service there is no statutory requirement for the Council to deliver a service.  It is the responsibility of schools to deliver a catering service.

·       The recommendations associated with the catering review are underpinned by an independent service review undertaken by the nationally recognised body Association for Public Service Excellence.

·       Financial modelling shows that the retention of the traded service is not sustainable for the Council.

·       A robust and fully supported transition programme has been established and is moving forward to implementation. This includes active engagement and joint working with all key stakeholders including schools, employees and potential suppliers.

The Calling-in Member was given the opportunity to ask questions of the Cabinet Member and Director. He queried why the review had only just taken place when it was his understanding that the service had been at risk for several years. The Cabinet Member explained that current financial pressures faced by the Council encouraged innovative thinking on how to make savings and the catering service was identified as an area for review. The Cabinet Member stated that the financial situation of the catering service had deteriorated over time and although it had been profitable in the past, it was projected to make a £800k+ net loss to the council in 2025/26. In response to queries, the Director of Economy confirmed that they were not looking at redundancies of catering Staff, there would be a change of Line Management to from the Council to schools, and full support would be provided to employees throughout the transition.

Next, Members of the Scrutiny Board were given the opportunity to ask questions of the Director of Economy and the Cabinet Member for Education.

Board Members queried how it was financially viable to schools to source their own catering when it would be cheaper to buy in bulk as a Local Authority than individual schools purchasing for themselves. Officers explained that 50% of schools were already responsible for their own catering so it was possible to do it successfully. Officers also noted that the notion of ‘clustering’ had been raised to schools to allow for savings to be made.

Some Members suggested that in addition to financial pressures on schools, they are typically very busy and may not have the capacity to take on the extra work and responsibilities that come with providing their own catering services. Members suggested that this may directly impact the children of Oldham and their access to a healthy and nutritious meal at school. Officers reiterated that the transition of the service to schools would be fully supported by the Council and that it is ultimately the school’s responsibility, and not the Council’s, to ensure that children are provided with school meals. In response to queries on whether the quality of the meals will continue to be monitored, Officers confirmed that meals must be to an accredited standard and this was the school’s responsibility.

In response to further questions on several years of bankruptcy warnings within the catering services, the Cabinet Member reiterated that he was not aware of previous warnings, and that the Council has never had to subsidise the service to the extent that it is projected to do in 2025/26.

Board Members questioned why other Greater Manchester authorities were able to provider cheaper meals, and whether any discussions had taken place to establish how they were able to do this. Members also questioned whether the Council had considered shared services with neighbouring authorities to cut costs. Officers confirmed that they had not consulted with other Greater Manchester authorities.

Some Members questioned why 50% of schools were able to provide their own catering services and were not reporting the significant losses that were projected for the Council. Members wanted to know why the Council could not invest into the service and make it into a viable business. Officers explained that it would require a significant investment and there was no guarantee of return on investment as more and more schools were opting out of the service following academisation.

When questioned on the halal meals, officers noted that they were accredited halal and relevant framework was adhered to, but he would take the question away to get a more detailed response.

In response to Member queries on the transition of funding and resources, officers explained that income for the catering service is generated from school meals and the funds will go back into the school. They also stated that kitchen/catering appliances and resources would be transferred to the schools.

Board Members were given the opportunity to question the Calling-in Member but no questions were raised.

Next, the Scrutiny Board debated the issue. Some Members agreed with the concerns of the Calling-in Member in particular the council’s apparent reluctance to invest into the service with a view to make it a viable business. It was suggested that it has proved to be successful for other Local Authorities and for schools within Oldham who are providing their own catering services, and there is no reason why can’t be the same for the Council provided essential investment was made.

Other Members suggested that the risk of investment was too great as there was no guarantee of return, and an increasing number of schools were opting out of the Service following academisation. In response Members argued that if the Council invested into the service and made improvements, schools would not continue to opt out.

Most members agreed that there was not enough information provided on the Catering Services of neighbouring authorities and Oldham Schools providing their own catering. They also noted that the idea of shared services across Greater Manchester should be investigated further as a cost saving measure.

Some Members raised concerns over the 9 month timeline for implementation of the change, they believe that it is rushed and if the plan goes ahead, the timeline should be reviewed.

Members noted that there was no input from schools in the report, feedback provided directly from schools should have been considered by Cabinet.

The Calling-in Member was given the opportunity to respond to any relevant points raised during the debate but had no further contributions.

Officers were given the opportunity to respond to the debate. They reiterated that schools were responsible for providing school meals and as 50% were already doing this, they don’t foresee any significant issues with the remaining schools transitioning to the new process. In terms of the council investing into the catering service, officers do not consider this to be a viable option considering the continuing financial issues and competing pressures the Council are facing. Ultimately, officers see the decision as an opportunity for positive outcomes all around with schools gaining autonomy and the Council making savings.

RESOLVED that, the Scrutiny Board will refer the decision back Cabinet to determine at its next available meeting, with the following recommendations;

1. Further consideration should be given to reinvesting in the Service in order to grow the market share.

2. A review should be undertaken on the implementation timeline to ensure that this is achievable for both the Council and Schools.

3. Explore the potential option of a Greater Manchester Local Authority Shared Service model.

4. Engage with Schools on a one to one basis in order to obtain their views on the review and also the intended future delivery model for the service

5. Provide an overview of meal prices for private providers operating within Oldham